Goodwill proves to be a retail juggernaut

While many big merchants are struggling to sustain their sales, one of the fastest growing retailers in Minnesota is a non-profit.

Sales at the thrift stores of Goodwill-Easter Seals Minnesota have been soaring thanks to a surge in the opening of new stores beyond the urban core. Goodwill even has a store next to a Maserati dealership in Minnetonka.

Consumers' growing frugality is also boosting sales.

In the past three years, Goodwill's retail sales have jumped about 75 percent to $67 million, a growth rate any business executive would be happy to brag about.

In St. Louis Park, Goodwill's Second Debut, caters to people shopping for goods from upscale brands. Inside, chandeliers hang from the ceiling, the floors are wood laminate, and the feel is full-price retail.

Leona Adams of Chicago was in town recently for a conference when she walked into the store.

"I thought I was in a boutique," she said. "Very nice. I was impressed. Pricing is good. It's excellent quality."

Second Debut carries men's and women's clothing, shoes and jewelry from high-end designers.

"Ralph Lauren, Polo, Chico and Ann Taylor and then we go all the way up to the fashion houses in Paris and Italy," said Cynthia Courtney, who manages the shop.

Courtney said everything is inspected for any flaws or stains and mended as needed -- then priced at a quarter or third of the original price.

We put out 200-300 units a day," she said. "So, it's new stuff every day. Within a month's time, if it's still here, it goes down 25 percent."

Still, Second Debut is the exception for Goodwill. Its typical outlet is like the 17,600-square-foot store off Highway 100 in St. Louis Park, with its fluorescent lights and vinyl tile flooring. The store offers the usual eclectic mix of clothing, furniture, small appliances, housewares and other goods.

Michael Wirth-Davis, CEO of Goodwill-Easter Seals Minnesota, said sales at Goodwill stores provide about 85 percent of the charity's revenue.

"The goal is to sell things, yes," he said. "But it's why we're selling things. And that's to produce revenue to provide services and programs for a wide variety of folks who are trying get work, keep work and advance in their careers."

The demand for such services is growing. In 2013, the organization provided employment and job-training services to more than 30,000 people.

Map: New Goodwill stores since 2008

Most of the store merchandise is from public donations. Other retailers also donate or sell inventory to Goodwill at a deep discount. Women's clothing dominates most stores. And the typical customer is a woman between the ages of 35 and 54. But Wirth-Davis says customers these days include a good number of men and come from across the economic spectrum.

"People often think that our stores are only for poor people, whatever that means for them. And we're saying we have stuff for everyone," he said.

Wirth-Davis said the Great Recession provided Goodwill with challenges and opportunities. Although more people needed its employment services, more consumers were eager to shop Goodwill. The hit to the retail industry made it easier and cheaper to lease good locations.

More than half of the nonprofit's 35 stores have opened since 2008, in outer ring Twin Cities suburbs like Chanhassen, Blaine and Hudson, Wis.

"When you have more outlets and it's convenient to donate your goods and shop, sales go up," Wirth-Davis said. "Also the look of a store. We're not your grandma's Goodwill, the traditional old thrift shop feel. We want it to be customer friendly and for people to have a great shopping experience."

Nationally, the portion of U.S. consumers saying they shop for used goods has doubled in the last decade to about 30 percent, according to Britt Beemer, an analyst for America's Research Group. He said a thrift store like Goodwill provides a handy way to recycle goods and stretch dollars. "There's no longer a stigma about buying there for consumers," he said. "If it's a good deal and value, they're not ashamed to buy it there."

Beemer says many young people today are proud to boast about the bargains they find in thrift shops.

For Kari Peterson, of Minneapolis, Goodwill is a way to manage college debt. She's a music teacher, who graduated from Bethel University about four years ago.

"I ended up with more loans than I expected and switched my major as well," she said. "So, I ended up staying in college longer than I intended. Moving out on my own, I wanted to be thrifty and smart about money, not buying everything brand new."

Price isn't the only attraction. Peterson likens Goodwill to a treasure chest full of surprises, like the rare classical vinyl LPs she has found for $1 or less a record.

"Pretty cool," she said.

Now, Peterson said, she just needs to find an inexpensive record player to play them on.