Naperville entrepreneur thrives in tough economy with 10 stores

Naperville entrepreneur thrives in tough economy with 10 stores

In an uncertain retail climate Elaine Krieger of Naperville has thrived with 10 franchises in the resale clothing business for children, teenagers and mature women that have reached revenues of $9 million.

But she got off to a difficult start 15 years ago after she and her husband settled in Naperville and she opened a Once Upon A Child store for resale clothing following 21 years in the corporate world.

That second career, Krieger says, made her appreciate that resale stores operate quite differently from the way most might think.

One key difference is that her stores pay cash immediately for quality clothing in good condition. Some other resale stores take clothes on consignment and pay only when the items are sold.

Additionally, much of the merchandise originates from better specialty or department stores. “Clothing is organized and displayed beautifully in a fine shopping environment,” she said.

Clothes Mentor, her recent venture into resale clothing stores for older women, focuses on women in their 30s, 40s, 50s and 60s and has clothes for petites to misses to plus sizes.

“We are a totally different form of shopping,” she said. “We fit the growing style, brand and value consciousness of area women who love fashion and adore 80 per cent savings.”

Krieger said the selection is three or four times larger than that of a traditional resale store. Also, she explained that there are bright lights and sophisticated displays.

Those displays include good condition clothing purchased from neighbors. Items must be name brand, current style, in season, freshly laundered and free of stains, fading, missing buttons or broken zippers.

Unlike designer resale stores, Clothes Mentor avoids high-end evening and dinner wear and favors better career, casual and everyday clothing, she noted.

One Clothes Mentor store is on Ill. Rt. 59 at Aurora Avenue across from the Fox Valley Mall. The other store is on North Roselle Road in Schaumburg near the Woodfield Mall and a third will open soon in Orland Park. All are franchises from the Blum Co.

Orland Park is also the location for a Plato’s Closet teen resale store. Other stores, which are franchises from the Winmark Corp., are located in Naperville, Downers Grove, Crest Hill and Bloomingdale.

Also in Orland Park is a Once Upon A Child children’s resale store. Another one is located in Joliet. Both are franchises from the Winmark Corp.

Krieger’s career journey toward all these stores began after she had worked for two decades for trade associations and public relations firms in Washington D.C. and Chicago.

“I got a not so golden parachute of six months salary after being laid off as a director of marketing for a health care organization,” she said, knowing that she had to do something.

“I had never been in a resale clothing store until I came here. But I saw that the whole concept worked for other people and for me and my two children of two and four years of age.”

So, Krieger, who has a bachelor’s degree in communications from Virginia Tech and an MBA in marketing and finance from the University of Virginia, started doing research and then opened a Once Upon A Child store in Joliet, which at the time was the only franchise territory available in the area.

“The first couple of years were a real shocker for me who was used to dealing with different types of people in the corporate world instead of individual consumers,” she recalls. “My husband thought I was crazy. We borrowed some money to start.”

But following her initial learning experience, one thing led to another. After working with the Winmark Corp. for franchises in the children’s clothing market, Krieger said she realized that there was a strong market for teenagers, who did not have an aversion to resale clothing as some mature women did. Teenagers often borrow clothes from friends, she noted.

So, after a few years Krieger said her role changed from being the only sales manager to hiring a district manager for four of her six stores, and she supervised the other two stores as well as overseeing 50 employees instead of seven people a few years before.

With employees growing to 100 for ten stores, Krieger said she is focusing this year and in 2009 on increasing same store sales. There are no plans to open more stores.

“Cash flow for the ten stores are one of my biggest areas of concentration. I have a financial accounting background, so I want to keep my focus there,” she said. “I have relinquished the human resources aspect to a part-time person.”

Krieger is also involved in advertising and marketing in local newspapers, radio stations and on some cable television channels like Lifetime.

“I also trade out with other retailers. I say to them that if you put our flyers in your stores, we will put your flyers in our stores.”

Unusual in the number of stores owned, Krieger is part of the growing resale industry, which is one of the few recession-proof segments of retailing, according to the National Association of Resale & Thrift Shops (NARTS).

Over the years there has been a growing public recognition of resale as a viable shopping venue, said Adele Meyer, executive director of NARTS.

“With gas prices at record highs, food costs increasing, and housing expenses rising, it is no wonder that consumers are feeling cash and credit constrained,” she said. “As they run out of purchasing power, they cut back on discretionary spending and change the way they shop. But don’t be mistaken, people will still shop.”

She said recessions present the opportunity for resale shops to attract new customers. NARTS members have reported significant increases in both sales and incoming inventory as consumers tighten their spending and search for sources of extra income.

NARTS recently surveyed its membership to compare April 2008 sales figures to those of a year earlier. Of 185 respondents, 75 percent said sales increased. The average increase was approximately 30 per cent. Just 10 percent reported a slight decrease in sales and 15 percent said sales were about the same.

The survey revealed that 80 percent of the stores experienced an increase in new customers.

Many factors contribute to the popularity of resale during both strong and unsettled economic climates, Meyer said.

“Increased awareness of recycling, the quest for higher quality for less money, the lure of finding something distinctive and the ‘thrill of the hunt’ are just a few things that lure the savvy shopper,” she said.

“One of the foremost reasons that resale thrives in a slow economy is simple. People love a bargain.”

Dan McLeister, Contributing Writer

Posted on Sunday, July 13, 2008 (Archive on Sunday, July 20, 2008)
Posted by jstoltz Contributed by jstoltz

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