Cash-for-clothing stores 'threaten income of charity shops'

Mike Lucas of the British Heart Foundation says companies such as Cash 4 Clothes and Clothesbank have cost it as much as £4.6m in the past two years

Mike Lucas
Mike Lucas

Charity shops could be losing donations and millions of pounds of income because of the increasing number of cash-for-clothing stores appearing on high streets.

The stores are run by companies including Cash 4 Clothes and Clothesbank, which have websites that say they have "new stores opening weekly" and offer £5 per binbag of clothes.

The companies typically sell the items they buy to second-hand clothing companies in eastern Europe, Africa and the Middle East. Charities that run shops say the companies are costing them stock and affecting their takings.

Mike Lucas, retail director of the British Heart Foundation, said its 700 shops had seen a 36 per cent fall in the volume of clothing it collects from households in the past two years because of this type of activity. That equated to a loss to the charity of £4.6m, he said.

"Commercial companies such as Cash 4 Clothes are a huge problem for charities with high-street shops," he said.

Jenny White, head of retail financial operations at Cancer Research UK, which has 550 shops around the country, said: "We are aware of organisations that offer cash in exchange for clothing, many of them claiming that the funds raised from the items’ sale will support a charitable cause.

"Because of this, we are having to work harder to keep our shops stocked with quality items because CRUK does not pay people for the items they donate."

Maureen Nickson, head of retail at Debra, which has 120 shops around the UK, said its stores had been affected.

"They are having an effect on charities because people can be paid for what they donate," she said. "We just have to hope people will think twice about it, but these are difficult times economically. Charity retail is highly competitive as it is."

The majority of the stores operated by Cash 4 Clothes and Clothesbank appear to be in the midlands and the north – but they are spreading south, with branches opening in London, Essex and Devon, according to the companies’ websites.

The companies did not respond to requests to comment. But Andrius Labanavicius, manager of four Cash 4 Clothes shops in East Yorkshire and Lincolshire, told Third Sector there was so much competition for clothes in Grimsby that the store there was offering 70p per kilo rather than the usual 50p.

"Because of the recession, people need money and even £5 makes a difference," he said. He declined to reveal how much the company made per bag of clothes sold on.

Alan Wheeler, national liaison manger at the Textile Recycling Association, said the number of such shops was growing because of the high value of used clothing on the global market.

The news website Letsrecycle.com puts the May price of textiles at between £500 and £570 a tonne.

The Charity Retail Association said it was aware of the problems cash-for-clothing stores were causing for charity shops.

A consumer study commissioned by the CRA in March 2012 found that 16 per cent of the 1,822 people surveyed nationwide had switched from donating clothes to charity shops to selling them because of the economic downturn.

Wendy Mitchell, head of policy and public affairs at the CRA, said: "The number one issue for charity shops is securing a good supply of donated stock from the public. This is obviously increasingly difficult because people are holding on to clothing for longer because of the recession, selling their clothing and shopping more frequently in charity shops, increasing the demand for stock."

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