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Reselling Goods Is Big Business In U.S.

August 7, 2016 GMT

DICKSON CITY — About a half dozen young women worked briskly at stainless steel tables. They emptied tubs full of children’s clothing to be valued and tagged before again becoming merchandise.

The workers behind the sales counter of Once Upon A Child, a used and preowned children’s store that just opened in the borough, are part of the machine propelling a relatively young market gaining momentum. Resale, where shoppers save by buying preowned goods, adds up to a multibillion-dollar industry.

Last Thursday, Julie and Brian Simmons opened their third resale shop along Dickson City’s Commerce Boulevard. Once Upon a Child joins Plato’s Closet and Style Encore.

The three businesses, franchises of the Minneapolis, Minnesota-based Winmark Corp., follow its clear-cut resale model. Employees grade the condition of sellers’ items and use a massive retail brand database, one perk of following the franchise model, to assign value and offer cash on the spot. Typically, clothing resells for up to 70 percent off its original retail price, Mr. Simmons said. Toys and equipment like beds and strollers sell for up to around half off their original price.

Resale, which comes in a couple varieties like thrift stores, consignment shops and cash-on-the-spot stores like the Simmones’, has gained widespread acceptance.

The industry analysis agency First Research in May reported there are about 20,000 of these types of businesses in the U.S. that generate a collective $17 billion in annual revenue. Last year, Winmark’s 1,170 franchise stores, which also include Music Go Round and Play It Again Sports, had a $1 billion market share.

“It’s about the economy,” said Adele Meyer, executive director of the Association of Resale Professionals, explaining that shoppers remain wallet-conscious and the deals found in resale goods suit smart clothing budgets.

In the Wyoming Valley, about six consignment shops have opened up all around where Wyoming meets Exeter. The owners of shops like Cliché Consignment, Whimsy Consignment and Lolliposh Clothing & Gifts, have unofficially dubbed their corner of Wyoming Avenue “Consignment Ave.”

Chastity Krakosky, owner of Lolliposh, was bustling about her small shop one morning last week with a pair of tiny strap-on sandals, a knit cap and a shoebox tucked under her arm. A mother to three boys, she said fast-growing children are a big motivator for both the people who consign and also her customers.

“Children grow out of their clothes so quick, they wear them for such a short amount of time,” she said. “The clothes are so gently used, most of them still have tags on them.”

Once Upon A Child was the Simmonses first foray into the sheer volume of children’s clothing, and they quickly discovered just how much stuff parents can hoard. In about five weeks they had purchased from sellers more than enough inventory to open — that’s three weeks less than the franchise model recommends.

Racks at the store are packed with clothing, all sorted neatly by color and size. One wall was covered with bins full of shoes. The top shelves over the clothing racks were stocked with large kids toys and baby swings. In the back, another wall of shelves was filled with toys, some new, mostly used, but all in ship shape.

Back-to-school shopping season is to resale shops what the holidays are to retailers, said Mr. Simmons.

On a dreary weekday last week, Anamaryah Heater of Dunmore was leaving the store with her daughter, Savanah, 7, and a small bag of clothes. It was their second trip back to Once Upon a Child since it opened.

“We probably saved about $40,” she said peering into the shopping bag.

The store often has clothing from the tween girls retailer Justice, which Mrs. Heater said costs a lot more to buy at the mall.

Originally from Corning, New York, Mr. Simmons, 52, worked as a process engineer at Corning Inc. for 27 years and Mrs. Simmons, 51, was a registered nurse. They raised three children, and later left employment to run their own glass sculpture business.

“The money was good, but it just wasn’t that fun,” Mr. Simmons said.

They opened their first Plato’s Closet in Binghamton seven years ago, and followed the market to Dickson City, where they found overwhelming reception in the county’s shopping district. They own a fourth resale location in Allentown and altogether employ about 110 people, mostly part time.

The resale model has staying power, said Peter First, Winmark Corp.’s franchise development director. The company started its first resale location, a Play It Again Sports, more than 25 years ago. The stores do well in both good and in bad economies, and sales figures show they consistently grow their customer base, he said.

“In 2000, the sales for Once Upon A Child, on an average, were a little over $400,000, today they’re just under $1 million for an average store,” he said.

Contact the writer: joconnell@timesshamrock.com, @jon_oc on Twitter