Despite a tough retail climate, New York City consignment stores are thriving by throwing themselves into competition with high-end retail boutiques. The secret to their success is mimicking these boutiques in design, stock, and location, giving them the competitive edge to survive in wealthy, high rent districts of the city.
Resale, which includes consignment and thrift shops, is defying the odds according to data from the census bureau. While retail is struggling and department stores like Macy’s are closing stores, resale is experiencing consistent growth in sales each year, opening the door to expansion. It’s a $17 billion industry according to an industry report from First Research, and New York has one of the greatest concentrations of resale stores in the country. According to the Department of Consumer Affairs there are 5,100 licensed secondhand dealers in New York City.
The upscale atmosphere is key. Consignment stores are trying to erase the image of the junk bin and consequently are designing their stores to look sleek and sophisticated to attract wealthy clientele that can bring in high-end stock that can be sold at higher price points.
In order to maintain this image, consignment stores are opening in desireable retail corridors, which are experiencing consistent rent increases. 2nd Time Around is an example of a consignment store that has experienced massive growth in recent years. They have 42 nationwide locations, the largest portion of which are in New York. They opened their first New York City store in 2009 and now they have 11.
Though high rents are a constant problem for other retail establishments, Adele Meyer, Executive Director of the Nation Association of Resale and Thrift Shops, says that this is part of a successful consignment business model.
“It’s all relative, if you’re in a low rent area and the economic demographic of the consumer is going to match, then you’re going to have merchandise that sells at lower ticket prices,” she said. “They always open in high rent districts so they draw in the merchandise that they want to and it works.”
Once a store hits its stride it will gain a loyal following, which leads to a more consistent supply of stock and customers. One such store is Michael’s Consignment, which has been on the Upper East Side since 1954, and takes high-end, gently used items.
This is not just a store for bargain shoppers, this is a store where customers are looking to buy discounted Chanel and Dior, which is still quite pricey even at a discount. Michael’s Madison Avenue location is appropriate and even though they sell used items, they are not considered out of place amongst designer stores like Christian Louboutin, Prada and Céline.
“It’s much more accepted,” said Tammy Gates, vice president of Michael’s. “It’s much more well known. It’s become very much a destination and people are willing to share it with their friends and their families and scream it from the rooftops.”
Used goods tend to be associated with financial instability and customers may be ashamed to admit they shop in resale. This is why stores like Michael’s and 2nd Time Around work hard to prevent being associated with junk stores. High rent areas and trendy stores help shatter that image, but for new stores those are large financial hurdles to overcome to get loyal customers and consignors.