Last year the for-profit thrift store chain Savers closed a Savers location in Bloomington and a Unique Thrift in Columbia Heights. Last week it closed the Savers in Minneapolis on East Lake Street and a Valu Thrift in St. Paul's Sun Ray Center.
Is this proof that brick and mortar thrift stores are as vulnerable to the changing economy as Kmart, J. Crew and Sears? In the Twin Cities few thrift stores have closed besides the ones owned by Savers. 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 a turnaround 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 its successful Second Debut store in St. Louis Park. The store is filled with cream of the crop designer apparel and accessories, all donated. It never caught on in St. Paul, possibly because University Ave. is also home to Goodwill's flagship store and an outlet.
Overall, Goodwill's growth is rock solid in Minnesota. The nonprofit has doubled its Minnesota store 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 percent growth in its store sales and an 18 percent 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 thrifts closing nationwide. More likely, at least in the Twin Cities, it's a sign that Savers, based in Washington state, is in a weak position.
Sara Gaugl, a Savers spokeswoman, has said in recent statement that the company reviews all stores and decided to close certain locations based on ongoing review and market pressures. 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 then Minnesota Attorney General Lori Swanson. The suit accused Savers of misleading the public about the amount of proceeds from donated clothing and furniture that actually go to charities. The audit found that Savers gave only one percent of clothing sales to charitable nonprofits. No profits from the sale of furniture and home goods went to charities. Savers had to pay $1.8 million to local charities and disclose that it is a for-profit company, not a charity.
Savers, recently sold to private equity firms Ares Management Corp. and Crescent Capital Group, has been on expected retail bankruptcies lists since 2017. The restructuring agreement in March cut its debt load by 40 percent, according to Bloomberg. It operates more than 300 stores in the U.S., Canada and Australia..
Babcock thinks the suit "certainly hurt them here [in Minnesota]. 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 Savers store in Minneapolis, unaware that it has closed a week ago Saturday. "I came here twice a week, " said Lloyd Peoples of Minneapolis, disappointed that it had closed permanently. "On Tuesdays they took an extra 40 percent off for seniors. I got these $125 Rockport shoes for $7."
