It seems that offline consignment is starting to feel the pressure from its rapidly growing online competitors. Coinciding with the news that The RealReal raised a whopping $50 million, national brick-and-mortar apparel consignment chain 2nd Time Around has announced that it is closing every one of its locations. The bulk are in Massachusetts — 2nd Time Around was founded in Newton in the 1970s — but there were also several locations in New York in addition to Pennsylvania, Illinois, Rhode Island and Vermont.
"Because of a convergence of market forces hitting all brick and mortar stores — including increased competition from online retailers combined with skyrocketing rents — we have made the difficult decision to close our stores," the retailer said in a statement provided to Fashionista. "We share the disappointment that this announcement brings to our loyal and valued employees, consignors and customers."
In the current retail landscape, this news doesn't exactly come as a surprise. Many brick-and-mortar retailers are dealing with similar issues, from insane rent to competition from more innovative retail companies. And with online resale growing increasingly popular — especially among Millennials — it seemed only a matter of time before offline resale companies would suffer. As much as the KonMari method might have been a boon to secondhand stores, online alternatives are growing much faster. While offline resale has been growing at an 8 percent CAGR (compound annual growth rate), online resale has been growing at a 35 percent rate, per a recent Thredup report. Those competitors include sites like The RealReal, Vestiaire and Thredup, as well as OG secondhand e-commerce site Ebay.
That said, the news does come as a surprise given how successful the retailer made itself sound just a year ago, when it announced through a WWD article that it had launched e-commerce. Gary Furst, the founder of Generation Equity Capital, which owns 2nd Time Around, said at the time that the company was "growing very fast" and that its business model had "virtually no risk." Asked about potentially selling the company down the line, Furst said, "We're not interested now. We're making too much money."
Things must've gone south fast. Stores are closing so quickly that some consigners are being left in the dust. Dozens of reviewers and commenters on Yelp, Facebook and Instagram have complained recently of getting the runaround from staff when asking for checks for items that had been sold. "Pay your consignors. THIEVES. FRAUD," writes @lisagarelick on Instagram. "They haven't paid me either and I was consigning at the Miami location which closed in April!!! I've been patient, but this is ridiculous. No one has responded to my emails!!" writes @vintedgelife. "No wonder this place is closing. I sold an item two months ago and have been getting the run around as I have not received payment. Today I finally said just said to them give me the store credit since you are closing. I was told there is nothing they can not do and in addition they could 'no longer assist further,'" writes Yelper Mariejose D.
According to the Boston Globe, some disgruntled sellers have been waiting for reimbursement on sold items for months; some have actually been told that they simply won't be paid. ABC 7 and Fox 5 also spoke to sellers who feel they've been stolen from. "We will continue to sell items as long as the shop remains in operation, and we remain committed to paying consignors for all sales made on or after May 1, 2017," reads a statement from the retailer. "Further information relative to consignor sales prior to May 1 will be forthcoming, pending the conclusion of remaining sales. As always, consignors are welcome to pick up their goods by providing 24 hours notice."
That is unless the store is padlocked due to non-payment of rent, which is apparently the case with the retailer's East Houston Street location in New York City. An email from the location's landlord obtained by the newly created Facebook group, 2nd Time Around Needs to Pay, confirms this and that New York's Department of Consumer Affairs is handling the release of items still in the store. "2nd Time Around has not reached out individually to its consignors to pick up their unsold personal belongings at the store," one caption on the Facebook page reads. "It refuses to take accountability for its poor management practices AND in the end, it is not taking care of the consignors who supplied their inventory and kept them in business for so many years."
Unpaid consigners are being encouraged to file complaints with the Better Business Bureau, which has given 2nd Time Around an F rating, in addition to their local state attorney generals and small claims courts. As for the type of legal trouble 2nd Time Around and its owners could be in, that depends on what's stated in the contracts signed by consigners, individual state laws and whether or not the company files for bankruptcy. In some cases, if there is a bankruptcy, the store's creditors could take a consigner's belongings to pay the store's debts.
If you happen to live near a location that has not been padlocked, it is likely having a big going-out-of-business sale right now. Let's hope some of the money from that actually goes to the sellers. More information can be found here.
We are keeping an eye on this story and will report back with any new developments.