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L to R: Store Supervisor Tom Canfield andStore Manager Josh Hagberg at the Salvation Army store in Fridley, MN on January 10, 2013.

Joel Koyama, Star Tribune

New idea for thrift stores: new merchandise

  • Article by: JOHN EWOLDT
  • Star Tribune
  • January 12, 2013 - 9:35 PM

A secondhand-goods chain is creating a first in the thrift retail market -- a store with all new merchandise.

Not "gently used" in thrift-store parlance, but brand-new.

Salvation Army's Amazing Deals store, aka the Salvation Army Family Store, opened Saturday in Fridley in the former Brand Name Deals location.

Like the former liquidation retailer, it sells returns and overstocks from discounters, warehouse clubs and catalog merchandisers at 40 to 60 percent below retail, including clothing, packaged food, HDTVs, cameras, furniture, tools, camping equipment, and bath and bedding.

The supplier for some of the goods remains the same, Jacobs Trading Co. in Hopkins, but the nonprofit has more departments and more merchandise in the spruced-up space.

"It's a new look at an old idea," said Jack Kinney, director of Operations for Salvation Army Adult Rehabilitation Center in Minneapolis.

The nonprofit center, which is almost completely dependent on merchandise sold in its 11 stores to support its mission of providing spiritual, social and emotional assistance to men in need, has seen a decline in the quality and quantity of donated goods, Kinney said.

Two years ago it started augmenting its inventory with returns and overstocks from such retailers as Target, Costco, Sam's Club, Fingerhut and other discounters and selling them in the lower level of the flagship store on N. 4th Street in Minneapolis.

It's a trend that's happening locally and nationwide in such nonprofit thrift stores as Salvation Army, Goodwill and Value Village as well as such for-profit thrifts as Savers and Unique.

"We needed to change or cease to exist," Kinney said. "New merchandise brings in new customers."

The 4th Street store, with new goods sold in the basement, has more customers and the highest sales of any of its 11 metro-area stores.

About 10 percent of Goodwill's sales in its Minnesota stores are new merchandise, said Lisa Ritter, director of marketing at Goodwill/Easter Seals of Minnesota. "It's been a phenomenon since we started it in 2010," she said.

Most of the new items are seasonal, including towels during January's white sales and wigs during Halloween, but inventory managers are always on the lookout for closeouts from manufacturers and liquidators.

The company will soon be bringing in a George Foreman-type grill and comforters in its 32 metro-area stores.

At Arc's Value Village, new goods make up about 5 percent of total sales, but sales of new merchandise grew nearly 40 percent last year. The store brings in seasonal items but also such surprises as 2,000 pairs of women's fashion leggings recently that quickly sold out.

Laurel Hansen, Arc's business director, expects the bath towels arriving in February to be a similar sellout. "These are items that our customers are surprised and delighted to find," Hansen said, because used goods make up the large majority of the inventory.

Still, neither Value Village nor Goodwill has plans to add an all-new merchandise store yet. For tax reasons, both are conscious of keeping the amount of new products sold to under 15 percent.

Salvation Army isn't concerned about reaching the 15 percent ceiling, Kinney said, despite the success of its new-merchandise floor in Minneapolis' Warehouse District.

The basement level, with new clothes and household goods that were returned to Target and Costco, will remain open.

District manager Tom Canfield said Amazing Deals offers an upgrade from the selection at other thrift stores. "We assemble all of the furniture and don't charge extra for it," he said.

But he expects clothing to be an even bigger draw. Sixty percent of the selling floor space is clothing, and five dressing rooms have been added. "And it's all free of stains, rips or missing buttons," he said.

John Ewoldt • 612-673-7633

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