Where frugality is fashionable - used clothing stores

Nation's Business, April, 1992 by Sharon Nelton

Karen A. Lynch of Newburyport, Mass., and Judy Bradford of Rockville Md., both sell used clothing. But don't call their operations thrift shops.

In her spiffy-looking Children's Orchard boutiques, Lynch sells quality, name-brand clothes that young children have outgrown, at prices 50 percent to 80 percent lower than garments would cost if they were new. Unlike the traditional thrift store, it's not a consignment operation; Children's Orchard pays cash to parents for the clothes, which must be clean and in top-notch shape. The company buys everything from sports clothes to snowsuits to fancy party dresses.

At Bradford's shop, I Do--I Do Wedding Gowns, a bride can purchase a gown in perfect condition at prices one-third to one-half below the cost of a new one. "Beautiful dresses twice chosen" is Bradford's slogan.

The two women represent the opposite ends of entrepreneurial ambition.

A former flight attendant, Lynch founded Children's Orchard in 1980 and, with the help of her husband, Robert, has expanded it to a chain with 42 franchises in nine states. Corporate revenues this year are expected to approach $7 million. The Lynches recently took on new partners and hired a chief executive to infuse expertise and capital to help the company grow even more. "We'd like to have a total of 300 units in the next five years," says Karen Lynch, the company's president.

By contrast, I Do-I Do is a home-based business. When Bradford brought it from its original owner in June 1991, her husband remodeled the downstairs level of their home to create the business's salonlike look, complete with chandeliers, crown modling, and pastel decor.

Bradford gave up her job as a bank loan officer to go into business for herself, and while it offers her a living, she has no illusions about becoming wealthy. "It's not a business that you do to get rich," she says. "It's business that gives you a lot of self-satisfaction.

It's very personal, by-appointment, consignment business. When a dress is sold, Bradford and its previous owner share 50-50 in the proceeds. When Bradford sends the check, she also sends a letter telling the former owner something special about the new owner--such as where her wedding will take place or something she said about the dress when she tried it on. That lets first owners "know the joy they've passed on," says Bradford.

Pesonal experience led both Lynch and Bradford into business ownership. Lynch looked at all the expensive outfits and equipment that her baby daughter had outgrown, and she wondered what to do with them. When she realized that other parents had the same problem, the idea for a business was born.

Bradford was attracted to I Do--I Do when one of her daughters offered her own dress to the store's original owner and learned that the business was for sale.

Each business carries inventory that is complementary to its main offering. I Do--I Do includes dresses for the mother of the bride and the maid of honor, as well as bridal accessories, such as wedding veils and garters. Children's Orchard sells toys and strollers, and the newer stores include a maternity department.

Both business offer some new items. Retail bridal salons turn some of their hard-to-sell dresses over to Bradford. Lynch offers new shoes, hosiery, infant undershirts, baby gifts, and other items that don't lend themselves to resale; some maternity goods are new.

Resale businesses may seem made for the recession. But Lynch and Bradford say their businesses do well in up times as wel as down. For one thing, they're aimed not at low-income customers but at people who like a bargain. Lynch's stores are generally located in middle- to upper-middle-income areas. "It's fashionable to be frugal," she says.

People who care about the environment and are less willing to waste things also like the resale market, according to Lynch. 'We see the resale business as recycling at its best."

Both women also know they are pleasing two groups -- buyers and sellers. As Lynch puts it, "We put millions of dollars worth of cash back into the family budgets every year by buying children's outgrown clothing from parents, and then we save them millions of dollars a year by letting them shop in our stores where the bargains are really considerably less than regular prices.".

Giving Birth To A Business

If you think you want to go into business for yourself, it's important to understand "the magnitude of the commitment," says Karen A. Lynch, founder of Children's Orchard, a Newburyport, Mass., franchise company that sells previously owned children's clothes.

Starting a business, she says, is like having a child. The decision-making process of whether or not to do it is similar. "Getting it up and running is very much like being pregnant," she says. "Opening day is like the day the baby is born. And it takes the same commitment and watchful eye and nurturing and effort that it does to raise a child."

Lynch says a business goes through an infancy stage where you can't take your eyes off it for a secod. It has to be disciplined. "It doesn't reach the age of reason until seven years," she says. And she adds that you have to have the stamina to stick with it during good times and bad.