Savers store builds retail from the supply side
When Savers, a business based on donations, opens its doors in early July, it doubles the workload and the possibilities for a local not-for-profit.
Savers sells used stuff, soft goods like clothing and hard goods like small electronics and furniture, all of it donated to the Friends of the National Multiple Sclerosis Society.
The Friends get a portion of the sales.
Through grants, they funnel those funds to the National Multiple Sclerosis Society, Great Basin Sierra Chapter, as well as toward national research for a cure for the disease.
Savers, a privately held, for-profit business, makes a tidy profit.
In fact, it is in a growth spurt, spurred on by a year 2000 influx of venture capital from Berkshire Partners LLC of Boston, which bought a 50 percent stake in the company.
The store chain is putting its new money into an effort to double its number of retail locations.
“Savers is a thrift store built on a retail store model,” says Jon D.
Kroon, vice president, business partnerships and logistics, for Savers.
It merchandises, it rotates stock, and attempts to create a traditional store atmosphere.
The new Reno location will be the firm’s 198th, and plans are to ramp up to 400 over the next five to seven years.
Of its stores, 95 are in Canada, and five in Australia.
All of the stores are fed by used goods donated to organizations such as the state or regional arms of the Association of Retarded Citizens, Epilepsy Foundation, and United Cerebral Palsy.
“It’s a win-win partnership,” says Kroon.
And it’s an odd bit of a twist to a retail store.While, in a standard retail store, vendors clothing, accessories, you-name-it come clambering for shelf space in a new location, Savers seeks out supply partnerships and nurtures them along, partnering in the business of filling its shelves.
Typically, he says, each Savers store is in partnership with one charity.
In Las Vegas, for instance, Savers has four stores, two in partnership with the Big Brothers Big Sisters of Southern Nevada and two in partnership with SafeNest Temporary Assistance for Domestic Crisis.
In Reno/Sparks, Savers’ has established its partnership with the Friends of the National Multiple Sclerosis Society, which already supplies its Sparks location at 2350 Oddie Blvd., and now is supplying the new, Savers store at the corner of Kietzke and Peckham Lanes, as well.
The organization will supply about 95 percent of the chain’s merchandise.Another 5 percent typically comes from the overstock market, says Kroon.
Except on Halloween.
“That’s a big holiday for Savers,” says Kroon.
The stores bring in a greater percentage of new product for the months ahead of the big day.
The new Reno location will have a drivethrough drop-off point, and 26,000 square feet of retail floor space, staffed by about 30 people (full- and part-time).
Some of those on the sales floor, some in the back sorting and inventorying merchandise.
Savers pays for merchandise based on a good-better-best test, says Kroon.
The nonprofit picks up a fee for all merchandise classified as best best being good enough to make it to the sales floor.
The rest, about twothirds, goes to world markets, or to recycle.
The store also supplements its merchandise for inventory balance by bringing items from its charity organizations in other markets.
On the supply end, says Mary Griewe, of the Friends of the National Multiple Sclerosis Society, the business is run with just 20 employees, a warehouse, and four 16-foot trucks.
In 2004, she says, the store supply business made $470,000 for the cause.
The trucks travel 90 routes in the area, ranging from South Lake Tahoe on the west to Fallon, and south to Gardnerville.
They load and unload six days a week, she says, and she’s looking to add another truck this fall.
Griewe, who’s been on the job for 14 years six as part of the National Multiple Sclerosis Society, and eight as a funding arm says her end of the business has been helped tremendously by the general growth of the Reno/Sparks and surrounding areas.
It’s methods of gathering merchandise mailers, phone calls, and scheduled neighborhood pickups.
“I like that Savers considers us their partners,” says Griewe.
The supply side of the business is emphasized, too, by Savers, says Kroon.
“It’s a business proposition for both sides,” he says.”And it has to be sustainable, as in any business.”
On its side, Savers is constantly refining its business model.
Recently, it ventured into a small store strategy, serving markets with 65,000 to 75,000 population bases.
And in larger,metro areas, he adds,”we’re finding our stores can be closer to each other than we thought.” But the challenge is not in the retail end, he says.
“It’s in growing the supply.”
And keeping it going.
Savers provides business technical support for its nonprofit suppliers.
“The thing that I like most about entrepreneurship is I can work toward something that I’m passionate about and be at the forefront of the change that I want to see happen,” said Priyanka Senthil, a senior at Davidson Academy in Reno and co-founder of startup company AUesome.