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Goodwill angles for donations during weak economy

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Kent Kramer has overseen the opening of 16 Indianapolis-area Goodwill stores since 2005 and has an eye on two more locations in Fishers and Center Grove.

Goodwill’s presence in busy strip malls lures plenty of shoppers, but donors are at the heart of the charity retailer’s aggressive expansion strategy. That’s because success as a thrift store hinges on fresh inventory.

thrift Don Gilliland, a donation attendee, stacks donated items on a conveyor belt at a Goodwill store in Fishers. Goodwill’s retail sales rose 8.2 percent in 2010. (IBJ Photo/ Perry Reichanadter)

“People like the treasure hunt,” explained Kramer, vice president of retail sales for Goodwill Industries of Central Indiana. “If you have the same stuff in there all the time, it’s a diminishing return.”

The recovering, yet-still-weak economy puts Goodwill in a sweet position. Consumer spending is up, so more old stuff makes its way to Goodwill. At the same time, high unemployment means the bargain hunters are still out in force.

Goodwill posted roughly $63.5 million in retail sales for 2010, an 8.2-percent increase over 2009. Same-store sales, a measure that cancels the effect of store openings, rose an enviable 4.5 percent.

Donations have explained the success, or lack thereof, of other charity thrift stores during the recession.

Salvation Army Indiana Division’s stores, which support a drug and alcohol rehabilitation program, have struggled for lack of fresh goods, said Envoy Steve McNary.

McNary, who took over management of Salvation Army’s six Marion County stores last summer, thinks Goodwill has become the first charity on most donors’ lists.

“They have a real hold on this area,” McNary said.

Salvation Army store sales grew 1.4 percent last year, and that was with the help of a new store on East Washington Street. (McNary declined to release total sales.)

This year, McNary intends to follow Goodwill’s lead. He hired a consultant to help scout new locations and hopes to open two stores before June.

When the recession began, Thrifty Threads Manager Jennifer Durham braced for a drop in donations by holding inventory from one season to the next. Yet donations kept flowing, and the store at West 86th Street and Ditch Road saw double-digit sales increases in 2009 and 2010. (Durham declined to provide total sales.)

“Right now, I am plum full,” Durham said. Thrifty Threads accepts donations for the Julian Center, a shelter for victims of domestic violence, and the National Council of Jewish Women.

Thrifty Threads has avoided competing head-on with Goodwill because it specializes in better-quality clothes and furnishings, Durham said.

Goodwill has been putting the abundance of its drop-off centers in affluent neighborhoods, a strategy that helps maximize collections. Even so, growth slowed at the height of the recession. Same-store sales in 2009 were up just 2.5 percent.

“Most retailers would have killed for a 2.5-percent increase, and it was one of our lower years,” Kramer said.

With the addition of 22 stores, and relocation of another 10, retail sales have nearly doubled since 2005.

thrift factboxGoodwill Industries of Central Indiana, which covers 29 counties, now has 48 stores and deep-discount outlets. Two dozen of those are in Indianapolis and surrounding suburbs.

The central Indiana Goodwill chapter is among the five largest in the nation.

Antiques hunter Michael Lantz, who lives in Castleton, noticed Goodwill proliferating across the north side.

“I see a lot of people shopping for kids,” he said. “At the stores in the suburbs, people get rid of pretty good clothes.”

That’s the idea behind Goodwill’s high-profile locations in places like Carmel and Westfield.

The newest Indianapolis-area store near a Target at East 86th Street and Westfield Boulevard is a perfect example of the sort of affluent neighborhood Goodwill seems to target, said Steve Delaney, a principal at the retail real estate firm Sitehawk.

Strip-center owners welcome Goodwill because the charity upgraded the quality of its buildings, Delaney said. Goodwill typically enters a lease-back agreement with developers, he said.

Goodwill plans to add three stores this year. One will be at East 116th Street at Allisonville Road, and another will be at Stones Crossing Road and State Road 135. The third undisclosed location is under negotiation, Kramer said.

For competitive reasons, Kramer declined to say how much Goodwill spends on new stores. Each store must generate enough revenue to cover its overhead within two years, and all the new locations have hit that target, he said.

Goodwill hires experienced personnel to manage stores and man the cash registers. Kramer himself came to Goodwill eight years ago after overseeing regional operations for Sam’s Club and Kmart.

The upshot of all the expansion is simply more jobs for people who face barriers to the competitive market, Vice President of Marketing Cindy Graham said.

Goodwill employs people with disabilities, low education and criminal convictions. About 1,500 of its 2,300 employees work in the retail division. Others work in Goodwill’s Commercial Services Division, which contracts with private firms and government. (Goodwill also runs Metropolitan High School and the Excel Center, which provides education to adults pursuing their high school diplomas, through a separate division.)

Retail sales, which include e-commerce and auctioned vehicles, covered 93 percent of the organization’s $63.2 million in expenses in 2009.

In Goodwill’s latest internal marketing study, customers didn’t list any other thrift stores among the places they most often buy women’s and kids’ clothing, Graham said. In those core categories, Goodwill ranked as high as Walmart and Kohl’s.

Graham said Goodwill realized some time ago that its customers shopped other discount retailers.

“We certainly know the retail dollars are retail dollars,” he said.

Durham, the Thrifty Threads manager, thinks consumers’ turn toward frugality during the recession will have a lasting benefit for charity thrift stores.

“If you go to a Goodwill and have a good experience, you’re more apt to shop a consignment or thrift store in the future,” she said.•

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  • Goodwill online auction
    Total rip off,IBID ON 3.99 PAIR OF EARRINGS and afterwards found out the shipping price attached to TINY DROP earrings was 7.99 from tenn. to al. needless to say i did not get them.Goodwill is a rip off.
  • High prices sending me elsewhere
    I don't pretend to know what GW does or doesn't do- I did look up their CEO's and discovered they earn about half a million dollars a year with their bonus compensations- that sound pretty darn profitable for a non profit! And I know that over the last year the prices seem to have gotten higher (took my father there to shopf for some outdoor furniture and the prices were comparable to major retailers, only without the rust!) and the merchandise somewhat shoddier. I have often loved exploring GW stores, and probably will continue to "look" but for purchases and donations I have found better deals elsewhere and other places to make donations. GW is too big to care what people think, they'll survive their high prices and bad customer service as so many big companies do now, but I won't be helping them to do so anymore. I'll still find the occasional steal because often the people marking the prices don't seem to have a clue- luckily, lol- so when I find something at an awesome price I'll be buying it, but it happens less and less now.
  • Inside Look At Badwill
    Look up goodwill on wikipedia. As of last year, they just started hiring transgender people in San Francisco. There's a retired worker that got bumped up into the top 1% in pay in america. They own 128 + Companies world wide. Its not non profit if you own the companies you give your money too. They train all managers that they are competing with wal-mart and kohl's. The only reason they are beating salvation army is because the did research first. Research to find out where those places are put their stores in and drive out the competition. Not made its all a fact. Look it up. While your at it, look up goodwill on the BBB or other whistle blowers sites. They built an empire out of free stuff and trash. As for corporate, nun of them have ever really worked in a goodwill store be for. They cant. Its a class system. The only way you can join them is if you were hired in as a manager. So if you were hired in as an employee and got to be a manager, thats as high as you can go. Your ladder stops. On top of that, when corporate does walk in a store, they will never talk to employes unless they are doing something wrong. An employee can try and talk to them but they wont even acknowledge their existence. The managers also have to go thru everything that looks too nice and send it to corporate. They have a quota for sending things to them to put on their shop goodwill page. They scan all the books to see their value. If its worth money they send it to corporate. Donating doesn't help the community, it helps goodwill get richer. Non of the nice things make it to the floor and and the stuff that does, is cheaper new. Im surprised they don't fire every one and replace them community service people. Ya, every on there wearing an apron is doing community service. Oh and about them hiring more handicapped people. They get kickbacks for having them there. Look that one up. The next time your at a goodwill talk to an employee and find out how it really is or just google these two words. "Goodwill Corrupt"
  • Millions $ - where?!
    I agree w/ Stephanie, they may do some good but where does that $63.5 million go? That is a ton of money in one year for one "non-profit". Highly paid executives is one place it goes. Compare the salaries of the Salvation Army CEO and the Goodwill CEO. Makes you go hmmm. I do shop there often but I always donate back to Salvation Army, as well as shop there, because I believe "they do the most good". A poor person can not afford to shop Goodwill. It kills me to see a Target price sticker on an item $2.48 and GW price is $5.00, at least pull the clearance sticker off before you mark it higher than they clearanced it for!
  • Proud employee
    I have worked for Goodwill for 9 months, and it is the best company I have ever worked for. Most business out there do not take the time to even learn their employee's names, let alone walk into their business. Yes they have a corporate office, but I know for a fact that they frequent their locations often. There has not been a month go by where I have not either heard from or seen Mr. Kramer at my location. I my eyes that proves the dedication for the mission. So please research before you judge.
  • Goodwill learning
    The economy, the last few years, has taken department store shoppers to discount stores and discount store shoppers to used merchandise stores. If consumers are are changing their shopping habits how do retailers encourage then to visit there stores? The answer is make them more like the discount outlets they are accustomed to. Modern, friendly, neat and clean will bring them in and bring them back.
  • No transparency
    I WORKED at Goodwill for over 6 years - in the corporate office - and still don't understand where all the money goes. The goods are overpriced, the senior staff overpaid and the mission work is minimal. There are better places to donate, shop, and help the community that are even mentioned in this article! I bet if you asked 1000 people what Goodwill does, only a handful would know. According to the Goodwill Guy, Goodwill "helps people." What does that mean? Why don't the TV ads show WHO they help? Why doesn't the Goodwill Facebook page have stories of the people they serve? Goodwill has a great name but they don't leverage that to any benefit. Goodwill...who are you?
    • Goodwill History
      Goodwill is a great organization. They buy those new goods from Target and other organizations. The only free goods they receive are from donors. Goodwill would be able to hold their prices down if it weren't for the theft. They never prosecute the thieves. They are just banned from entering the store. If they sent them to jail, maybe their prices could be lower. I also lived in Colorado for 25 years and the stores in Denver were trashy. They are now great stores as they are here in Indy. The prices are the same nation-wide now. Learn about Goodwill International before speaking about you don't know to be true. They always price their target at 50% of the value. How do I know???? I have volunteered at Goodwill on several occasions and have priced the target myself. Their school is exceptional and they hire more special needs individuals than any other establishment. Learn more about Goodwill before being so negative.
    • Goodwill needs better marketing
      Yes, Goodwill could do a better job marketing its mission. But it has a a really good one that I have witnessed when it employed my mother and educated my child at the Indy Met. Goodwill provides job training and education to thousands of central Indiana residents every year. But it seems the marketing direction is all off. People know about the stores! And people would donate more if they knew what the mission behind the stores really was.
    • Re: "Beware"
      Julie, you may think twice about your comments on Indiana's Goodwill. They do job education, coordinate volunteer efforts, handle extra schooling, do job fulfillment in factories for folks with disabilities...the list goes on.

      Say what you like about pricing, as that's all a matter of opinion and consumer choice, but don't make generalized statements that "all they do" is hire retail workers and pay administrative overhead, when that simply isn't true. I'd also encourage you to learn more about why Goodwill in Indiana is actually doing a lot of really impact-filled things for Indiana as a whole.
      • help the unemployed and lower your prices!
        I shopped Goodwill for years...until I found that I could buy something from Kohl's NEW at the same price or less. My grandfather stopped shopping at Goodwill because of how high the prices have grown. I realize you have overhead and have to run a business, but what happened to your mission? Furthermore, I found a dish, same exact dish, with two different prices and the manager would not budge on making an adjustment. I would remove the word "mission" from your store marketing, because it no longer appears to be "mission minded" in their pricing... for things that were USED or purchased at a discount. Help the economy and lower your prices!
      • GOODWILL RIP OFFS!
        I agree with Julie Knox. I have watched as Goodwill prices have gone up and up. Recently, I saw a pillow from Target marked $11.99!! A pillow! That they got for free!! All low income families really need a $11.99 pillow to show off! NOT!! From now on, I am giving my excess and unwanted items to the Salvation Army stores. At least they keep the prices reasonable and the items are in fairly good shape.
        • Beware of Goodwill
          As a long-time thrift store shopper, in three states (and others while visiting), Goodwill needs a "check up." Thousands spent on advertising, which is wasteful -we know who you are, and where to find you! I'm used to "as is" items - that's a given in thrift stores, but Goodwill slaps ridiculous prices on items that should have been trashed. They "buy" pallets of merchandise from retailers like Target, then attempt to sell the items for MORE than Target's original price -and often, the items are damaged in some way! Buyers can "beware" - I am, but still! I lived in Colorado for 10 years, and in Colorado Springs, Good will operated an appliance repair shop, and a wood-working repair endeavor -meant to teach job skills, and to insure that items sold were in best condition possible. What exactly does Goodwill in Indiana do, except hire retail workers, and pay administrators a salary? I think it's time for Goodwill to re-evaluate it's "mission" - not supposed to be "Kohl's"!

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