Charity shops: Thrift Shop to upmarket boutique

No longer stuffy and unfashionable, charity shops are increasingly being styled in the image of the high street retail giants. Patrick McCurry assesses the trend, and our reporters visit a selection of shops in the UK incognito.

Move over Selfridges - there's a new designer shop on the block: Cancer Research UK's premium store. The recently opened Chichester store is the first of a clutch of outlets that are more upmarket boutique than thrift shop. Based in affluent areas, the premium stores sell high-quality items.

"We're giving these shops more of a boutique feel, with different colours and fittings to attract a different kind of shopper," says Simon Ledsham, retail director at CRUK. "The important thing is to show potential donors that their Prada shoes will fetch a decent price and not be sold for a couple of quid."

Meanwhile, Barnardo's is breaking into the lucrative wedding market.

Vintage gowns have always been popular in charity shops, but usually more for fancy dress than a bride's big day. Barnardo's hopes to change this by selling designer dresses.

"We've got designers to donate wedding dresses and have opened wedding departments above two of our shops," says Gerard Cousins, head of retail for Barnardo's southern division. "Within a year, there will be ten."

Many larger charities are seeking to diversify into niche areas such as bookshops, fair trade coffee shops or music downloads. This is partly a reaction to an increasingly difficult market - although the trend for vintage clothes should work in charity shops' favour, the rise of discount clothes retailers such as Matalan and Primark is creating extra competition.

"If these shops are selling garments at, say, £3, that limits what we can charge," says Cousins.

With the ballooning number of discount clothing retailers and continuing complaints from the small business lobby about the tax advantages charity shops enjoy, trading conditions are getting tougher. Despite sales across the sector rising by about 6 per cent last year, profits at charity shops were slightly down, according to a Charity Finance survey.

One thing that becomes clear when looking at charity shops' performance is a significant variation. At Barnardo's, for example, trading income (including shops) in 2003/4 was £21.7m, but trading costs were £21.1m, leaving a profit of only £600,000. Others are posting large surpluses - CRUK, for instance, is hitting profit margins of 25 to 30 per cent.

Probably the most important step a charity can take to make its shops successful is to understand its local market. CRUK has carried out research into why certain shops seem to do worse (or better) than others. It found that poorly performing shops in low-income areas were being hit by discount stores and street markets. This led it to launch its own 'discount' shops, selling stock at lower-than-average prices. "We now have 60 of these and they've increased profitability," says Ledsham. "We also have a couple of 'pound' shops."

Meanwhile, CRUK's Wishes stores, which sell greetings cards and gifts, have been good for shops in pedestrianised areas, where it can be difficult for people to drop off donated goods at traditional charity shops. The charity hopes the premium stores situated in affluent areas will encourage donations of designer clothes and high-quality items.

One advantage of CRUK's diversification is that it might provide a solution to the problem of having two shops in many towns - a consequence of the merger of the Cancer Research Campaign and the Imperial Cancer Research Fund to create CRUK in 2002. "We envisage a 50-50 split in our turnover between clothing and non-clothing," says Ledsham.

To target different markets properly, charities will have to make sure that the design and interiors of their shops reflect the tastes of the people they are trying to attract. Ireland-based homelessness charity Simon Communities recruited Linda Ward from the commercial retail sector to revamp its shops. Ward, who has worked for Marks & Spencer and Debenhams, tendered a design contract to come up with a 'look' for the half-dozen shops.

"I felt it was important to get an outside professional to provide design and branding input, even though that's rare in the charity sector," Ward says.

A key objective of the exercise was to communicate to customers what kind of charitable activity they were supporting by shopping at the stores.

"Too often you go into smaller charity shops and don't really know what the charity does," she says.

Ward recruited the agency 21 Spaces, which has devised a design to communicate information about how the charity tackles homelessness. This will include a large graphic behind the till featuring the charity's logo and strapline - "Ending homelessness, preventing homelessness".

For Ward, the whole approach is similar to that adopted by the large commercial retailers, which have understood the importance of branding and making a connection with customers.

"Why do people buy Nike trainers or Pepe jeans? Because there's an emotional link to the brand," says Ward."It's the same for charities. We need to tap into this, and a shop is a great place to do it."

She adds that there has been a blurring in the difference between charity shops and commercial retailers - 'trendy' shops such as Urban Outfitters are selling second-hand goods at relatively high prices. With the growing focus on recycling and reusing products, there are also more middle class customers at charity shops.

Ward admits that making charity shops look good is easier for large charities with big budgets. But she says there is still much that smaller charities can do "Bad design costs as much as good design," she says. "You have to decorate and choose the fittings, so you may as well make the effort to do it well."

Karen Buckland-Bailey, who is launching Victim Support's first foray into charity shops, agrees that fittings and design have become more important.

"The more you can make the shops look like Next or Bonmarche, the better," she says.

Victim Support has opened one shop in Horsham, West Sussex, and plans to have a cluster of six in the south east by the end of next year. This is a new concept, she says, because many charities have shops scattered across the country. Instead, one of Victim Support's new shops will be a 'hub' store. "Our shops will all be within an hour of the hub, which we hope will give us an advantage," explains Buckland-Bailey. "We can farm out stock from the hub store and it will make it easier to monitor stock control."

In spite of the increased competition from discount retailers, the arrival of new players such as Victim Support suggests the days of the charity shop are far from over, despite complaints from the small business lobby that charities enjoy business rate rebates that create an unfair playing field.

Joanne Stetzel, business development and marketing manager at the Association of Charity Shops, says that rather than contributing to the decline of the high street, charity shops actually encourage more shoppers, which can only benefit other small traders.

Stetzel stresses that a great advantage of charity shops is that they provide more controllable income than other forms of fundraising, such as legacies. Another big benefit, she says, is that a charity shop can help a voluntary organisation maintain a presence on the high street and, as in the case of Simon Communities, promote its work.

Stetzel believes innovation will form the foundation of charity shops' future prospects. As well as new ideas such as stand-alone bookshops, wedding departments and premium stores, a number of charities are selling items on their own pages on eBay, she says. "This enables them to open up their stock to a much wider audience and is especially relevant with collectors' items," she adds.

Nor is innovation restricted to the big players. "Guild Care in Worthing has recently opened a unique outlet," she says. "It used to be a council dustcart depot, but with the help of a top designer it's been turned into the 'Greenhouse'. Here you can find furniture, electrical goods and other items restored at in-house workshops."

However, it's not all about expansion. Some charities, such as Sue Ryder Care, have shut down poor performers and thereby increased profitability. This is still a relatively rare occurrence in the sector, but with the growing pressure on charity shops to justify their existence, the mood could be changing.

Cousins says Barnardo's is planning to add about 20 shops to its 323 existing stores in the coming year, and that most of the new ones will be specialist bookstores or furniture stores. At the same time, the charity has decided that it is no longer prepared to allow poor performers to stay open indefinitely.

"We're being more aggressive when it comes to our property portfolio," says Cousins. "If certain shops aren't making enough profit, then we're prepared to be ruthless."

NOTTING HILL HOUSING TRUST, KENSINGTON, LONDON

The small but well-formed outlet is a typical charity shop - despite its upmarket location, it has the usual ratio of bargains to rubbish.

When I call in, the haphazardly arranged baskets at the front of the shop contain dubious self-help books and obscure sci-fi titles - this is no Waterstones. Further back, neatly subdivided rows of clothes reveal well-worn corduroys, women's shoes and the obligatory tweed jackets. CDs and bric-a-brac are stacked at the back.

Given the location, I expect to find some high-grade stuff, but on this occasion I am disappointed. The assistant tells me the shop does get some astounding donations, however - on one occasion somebody donated a Versace suit, unused.

Staff: I am told there is a phone number in the shop window if I want to offer my services. When he checks, however, the assistant finds it has mysteriously disappeared and the shop has run out of information leaflets. He explains that I could do a variety of volunteering jobs and eventually finds a phone number for the volunteer co-ordinator.

Best buy for under £10: Walking around the shop, I soon realise there isn't much here to interest the male shopper. This is reflected by the clientele - the vast majority of shoppers are women.

The bookshelf seems to have the most potential. I briefly consider a battered copy of Stephen Clarke's English person's guide to Paris, A Year in the Merde, but in the end I decide on a copy of Andrew Kershman's Bargain Hunters' London for £6.99.

Adam Bannister

OXFAM, HAMMERSMITH, LONDON

In many ways, this branch of Oxfam is not much different from a regular shop. Many of the goods are new rather than donated and stock is divided into clearly signposted sections. Even the books are stacked in alphabetical order.

Usually, visiting a charity shop involves sifting through a mound of items in the often misguided hope of uncovering a gem. But the records, CDs and books in this shop are surprisingly good. The clothes section gives Oxfam away, though, because the items are of a typically varied standard.

Staff: Unfortunately, I can't get any information about the organisation's work when I visit. Though polite and friendly, the man on the till can't tell me anything about volunteer work, saying I will have to wait until his manager returns three hours hence.

Best buy for under £10: Shopping when you are hungry is always a mistake - I manage to walk past the Green & Black's chocolate but can't resist the Fairtrade ginger nut cookies for £1.30. My second bargain of the day is a brand new educational soft toy, Muncher the giraffe, for only £7.95. The assistant even checks his squeaker to make sure he is in full working order.

The items are presented to me in a smart Oxfam bag - great for creating brand awareness and shaking off the thrift-shop image, but not such good news for the environment.

Adam Bannister

AGE CONCERN, ST CLEMENTS, OXFORD

The fairly large and boasts an equally large range of stock. Items range from fancy-dress costumes and retro board games to wall tiles and a cheese-making kit. Regular products such as books, clothes and shoes are also present. The quality of all the stock is high, with some of the books being first editions or signed copies.

Some of the stock is placed on high shelves or in the extensive window display, making it hard to get at. However, the staff are happy to retrieve items, and signs such as "more children's books below men's trousers" are very helpful.

The range of stock and the number of unusual items in this Age Concern shop make it well worth a visit.

Staff: Information about the charity and opportunities for volunteering seem a little sparse when I go in. However, the man who serves me points me in the direction of a few good information leaflets - including one about a weekly lottery and another about a travel insurance scheme - and seems to know a lot about what Age Concern does. He also provides a number to phone for information about volunteering on local projects.

Best buy for under £10: I manage to pick up Poseability - a retro board game that is a cross between Pictionary and charades - for only £2.50. I also buy a copy of Mike Myers' spy spoof Austin Powers - The Spy Who Shagged Me on video for £1.50, a saving of £4.49 on the amazon.co.uk price. That said, a seller on the site's second-hand section is selling a copy for 5p.

Helena Gilbert

CANCER RESEARCH UK, DIDSBURY, MANCHESTER

Manchester now has a Selfridges, and if you want to find charity shops you have to head for the suburbs. Remarkably, the city centre has only one charity shop - an Oxfam. The suburb of Didsbury, however, has several, and CRUK has done well to bag itself a prime location on the main street.

The shop offers a moderate but well-organised range of books, clothes, household ornaments, children's toys and music. Successful retail is all about location, product and price, and CRUK has clearly got it right in Didsbury. It is mid-morning on a weekday and the shop is busy.

You can almost forget that you are in a charity shop. In fact, that is pretty much the only criticism. There is almost no CRUK branding or information on display - perhaps reminders about cancer don't help sales.

Staff: When I ask for some information during my visit, the assistant looks a little bemused, then rummages around in a cupboard before eventually producing a brochure about sponsored adventure holidays.

Best buy for under £10: Five pounds doesn't go far these days, but in this shop it buys a cuddly monkey for my three-year-old god-daughter and a toy rocket with which my four-year-old godson can cheerfully annoy sunbathers on Wandsworth Common. Try getting a bargain like that in Selfridges.

Alex Blyth

SCOPE, PADDOCK WOOD, KENT

As soon as I step through the door, I am confronted by a large pinboard full of information, offering details on volunteering opportunities, a support and advice helpline and a cerebral palsy fact sheet. However, many of the leaflets beneath it are sun-bleached and out of date.

Stock is organised in the classic charity shop style. The prettier, slightly less worn clothes are presented on mannequins in the shop window, while the just-about-sellable items hang from circular racks on the shop floor.

China, pottery and assorted kitchenware are relegated to shelving along the walls towards the back, next to old vinyl records (it is hard to pick a favourite between Duran Duran's Rio and Club Tropicana by Wham!) and some wonderfully naff CDs that include the best of Tom Jones.

Staff: The assistant is helpful and enthusiastic when asked for information on volunteering, and she tells me that Scope is "concerned with the care and equality of people with cerebral palsy". As I leave, she suggests I take a leaflet and consult the charity's website for further information.

Best buy for under £10: Glancing around the shop, my eye is drawn to the shelf full of board games and toys. As I pick through the boxes, there he is - a six-inch figure of footballer Wayne Rooney. He is mine for only a fiver.And he's a collector's edition, no less.

Graham Willgoss

IMPROVE SHOP PERFORMANCE

- Consider taking a page on online auctioneer eBay, where you can reach many more consumers for antiques and higher-value products

- Ensure each shop has the right business model for its area. For example, in a low-income area it might make sense to promote a 'discount' charity shop, but to focus on designer clothes and products in affluent areas

- In student areas, consider bookstores or entertainment stores selling music and DVDs

- If the shop is dowdy and unwelcoming, look at possible changes in design, colour scheme and fittings. Customers prefer brighter and more welcoming stores, up to the standards set by commercial retailers

- Communicate to customers what the charity does by using graphics, straplines and other media. Customers who build an emotional link with the charity are likely to return.

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