Thrift-store closures raise questions

The Savers on East Lake Street in Minneapolis and the Valu Thrift in St. Paul's Sun Ray Shopping Center shut down, making four thrift stores in the Twin Cities closed in the past year or so by their for-profit parent company.

The closures raise the question of whether brick-and-mortar thrift stores are just as vulnerable to the changing economy as Kmart, J. Crew and Sears.

In the Twin Cities, few thrift stores have closed other than the ones owned by Savers, which last year closed a namesake store in Bloomington and a Unique Thrift location in Columbia Heights.

Arc's Value Village closed its Brooklyn Center store last year not because it was losing money but because it lost its lease. Its stores in Richfield, New Hope, Bloomington and St. Paul are seeing an upswing this year.

"We reached rock bottom last year after Goodwill's major Twin Cities' expansion in the last five to 10 years," said Molly King, marketing manager for Arc's Value Village stores, which support people with developmental disabilities. "We're seeing a turnaround now."

A couple of years ago, Goodwill-Easter Seals Minnesota closed a small store on University Avenue that was modeled after the successful Second Debut store in St. Louis Park.

The store was filled with cream-of-the-crop designer apparel and accessories, all donated. It never caught on in St. Paul, possibly because University Avenue is also home to Goodwill's flagship store and an outlet.

The nonprofit has doubled its Minnesota location count in the last eight years to 51 stores and saw the highest revenue growth of any Goodwill organization in the country. Year over year, it's seeing a 4.5% growth in its store sales and an 18% growth in online sales, according to Brent Babcock, chief sales and marketing officer for Goodwill-Easter Seals Minnesota.

Babcock said he isn't aware of any surge in thrift store closing nationwide. More likely, at least in the Twin Cities, it's a sign that Savers, based in Washington state and owned by a parent company, was undergoing restructuring.

Sara Gaugl, a Savers spokeswoman, said in a recent statement that the company reviews all stores and decided to close certain locations based on ongoing review. The company has six remaining Twin Cities locations including Savers stores in Apple Valley, Columbia Heights, Coon Rapids and Woodbury and Unique Thrifts in Burnsville and New Hope. A St. Cloud location is also open.

Gaugl said the Minnesota closures had no connection to a lawsuit initiated in 2015 by Lori Swanson, who was then state attorney general.

The suit accused Savers of misleading the public about the amount of proceeds from donated clothing and furniture actually go to charities. According to the lawsuit, an audit found that Savers gave only 1% of clothing sales to charitable nonprofits with no profits from the sale of furniture and home goods going to charities. Savers had to pay $1.8 million to local charities and disclose that it is a for-profit company, not a charity.

Babcock thinks the suit "certainly hurt them here. It was really challenging for them," he said. "But it's not because there's a movement away from thrift stores. Thrifting is popular with the younger generation. Savers is losing out to other thrift stores and online thrifters."

On Tuesday a steady stream of customers drove up to the now-closed Minneapolis Savers store, unaware that it had closed a week ago Saturday. "I came here twice a week, "said Lloyd Peoples of Minneapolis. "On Tuesdays they took an extra 40% of for seniors. I got these $125 Rockport shoes for $7."

John Ewoldt • 612-673-7633