Venerable names like Macy's, J.C. Penney and Stage Stores
embrace thrifting in push to jumpstart sales and lure younger
shoppers
By Suzanne Kapner
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 17, 2019).
Some of the country's biggest retail names are following online
startups into the cult of thrifting, casting aside long-held fears
that selling secondhand goods would cannibalize the market for new
goods.
Macy's Inc. and J.C. Penney Co. this past week unveiled
partnerships with resale marketplace thredUp Inc. to sell used
clothes and accessories in some of their stores. Outdoor brand
Patagonia plans to open a temporary store in Boulder, Colo., this
fall dedicated to selling pre-owned goods, its first such
location.
Thrifting is gaining traction as shoppers have grown more
bargain conscious and concerned about the environmental impact of
fashion, particularly the throwaway clothing model popularized by
fast-fashion chains.
"We looked deeply at Generation Z consumers, and recommerce came
up over and over again," Macy's Chief Executive Jeff Gennette said
in an interview, referring to the burgeoning resale market. "It's
not a downside that something has been preowned."
Thorsten Weber, chief merchandising officer of Stage Stores
Inc., which has thredUp shops in about 45 of its department stores,
said traditional retailers are just beginning to wake up to the
impact of resale. "Just like off price became a disrupter, resale
will be a disrupter," he said. "It will be a force in the
industry."
Other chains, including Bloomingdale's, which is owned by
Macy's, Urban Outfitters Inc. and Ann Taylor, are taking a slightly
different approach by launching services that let shoppers rent
clothes instead of buying them. Customers can even rent home décor
at West Elm, which has partnered with Rent The Runway Inc. for the
program.
"Customers are looking at dead inventory in their closets," Mr.
Gennette said. "They may wear an item once or twice, but why do
they have to own it?" And if they can save a garment from going
into a landfill, so much the better, he added.
For traditional retailers, many of whom are struggling with
sluggish sales as shoppers buy more online, resale and rental is a
way to bring younger customers in the door.
Phil Graves, Patagonia's director of corporate development, said
shoppers who buy used clothes from the outdoor brand are typically
a decade younger than those who purchase new gear from the
chain.
Patagonia began selling used goods in 2017 under its Worn Wear
label, although it has provided repairs of existing gear since the
1970s. Shoppers can send back used items by mail or drop them off
at one of the retailer's 34 U.S. stores. In return, they get a
credit of up to $100 that they can use on future purchases.
This fall Patagonia will launch Recrafted, a line made from old
clothing and other gear that couldn't be resold in their current
state. The items are refashioned into new garments, including
jackets, bags and vests.
Resale is still a small business for most traditional retailers,
but it is growing fast. At Eileen Fisher Inc., which pioneered
resale a decade ago, it accounts for about 1% of sales. Sales of
Levi Strauss & Co.'s authorized vintage garments have tripled
since the line was introduced in 2017, but are still a tiny
fraction of overall sales, said Jonathan Cheung, Levi's senior vice
president for design innovation.
Many traditional chains, particularly luxury brands, continue to
sit on the sidelines, worried that a booming secondary market will
depress demand for new goods.
"If you've sold new cars your whole life and all of a sudden
you're going to start selling used cars, the immediate fear is,
what if all the customers just buy used cars?" said Andy Ruben, the
CEO of Yerdle Recommerce, which operates resale programs for
brands. "The reality is that people who want used items are going
to find them anyway."
That is what has been happening with Michael Kors handbags, said
John Idol, chief executive of parent company Capri Holdings
Ltd.
"There's no question that resell in North America impacted the
Michael Kors accessories business," Mr. Idol recently told
analysts. "There is a substantial amount of product that is resold
on numerous websites. We don't sell to those companies directly.
But you can find our product on there."
Nevertheless, Mr. Idol said Michael Kors isn't rushing to launch
a resale business of its own. "We'll be very slow" in evaluating
these new opportunities, he said.
One issue keeping traditional retailers at bay is sourcing.
Old-school chains are set up to sell thousands of the same item,
not thousands of one-of-a-kind pieces that need to be vetted and
cleaned.
"It's not that easy to find the goods," Levi's Mr. Cheung
said.
Mr. Cheung said employees scour thrift shops, yard sales,
websites and vintage dealers for jeans from the 1980s and 1990s
that Levi resells in its eight flagship stores.
"There has been a change in the perception of vintage goods,"
Mr. Cheung continued. "When I was growing up, they signified that
you couldn't afford new clothes. Now, it's a status symbol. It says
you've made an intelligent and sustainable choice."
As a fast-fashion retailer and pioneer of the throwaway-clothing
trend, H&M isn't usually top of mind when it comes to
sustainability. But the Swedish chain has been working to change
that. In 2013, Hennes & Mauritz AB launched a program that lets
shoppers drop off used clothes at H&M's nearly 4,500 stores
world-wide.
The items, which can be from any brand, are collected by a
recycling company. Roughly 60% are resold through local thrift
shops and markets; the rest are turned into other products or
fibers for new garments.
Eileen Fisher was one of the first traditional brands to dive
into resale in 2009 when it launched a program for employees. It
eventually opened it to the public, and resale took off in 2013,
when the company posted signs in its stores that read, "We'd like
our clothes back, thanks very much," said Cynthia Power, director
of Renew, the brand's resale and recycle program.
Today, the company sells used clothes in a handful of its 67
Eileen Fisher stores, as well as in two free-standing Renew stores
and on its website. Used clothes typically cost about a quarter of
the price of new items, Ms. Power said.
Ms. Power said selling used clothes hasn't hurt sales of new
clothes. "It gives customers another reason to come to the store,"
she said. "It's an add-on purchase."
Write to Suzanne Kapner at Suzanne.Kapner@wsj.com
Read more of The Wall Street Journal's coverage of the
burgeoning market for secondhand goods.
The Rise of Hand-Me-Down Inc.
Vintage is becoming big business as The RealReal and other
upstarts feast on the emerging appeal of secondhand clothes, shoes
and accessories
Meet the Depop Generation
Young entrepreneurs are going online to sell clothes for profit,
capitalizing on Gen Z's love of vintage gear. They've got an eye
for what will sell, and know where to find it.
The Closet Chronicles: How I Buy and Sell $1,000 of Clothes a
Month
Grailed, a marketplace for men's clothing, has radically changed
how our reporter thinks of his wardrobe. In any given month, he
spends up to $1,000 on clothes and shoes and take in a similar
amount on sales of preworn pieces.
Facebook Marketplace: The Wild West of E-Commerce
Facebook says one in three people uses its Marketplace. But does
the online flea market, which gives the names, profile photos and
general locations of buyers and sellers, create a false sense of
security?
(END) Dow Jones Newswires
August 17, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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