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Retailer Makes a Brand Entrance

Teenagers adore name brands. Many of them won't be seen in public without their Tommy Hilfiger, Polo or Abercrombie & Fitch gear. They scour thrift shops and travel great distances to outlet malls in search of their favorite names at discount prices. Plato's Closet, the latest franchise launched by Minneapolis-based used-goods maven Grow Biz International, is here to serve those teens.

"Plato's Closet is devoted exclusively to the recycling of name-brand teen wear," says Becky Geyer, general manager of the chain. "We don't accept just any name brand though. We focus on those that carry a distinct identity, such as Banana Republic, Calvin Klein, The Limited, Guess?, Gap, Express and Old Navy. Everything is in good condition and current style."

The store fills its racks by trading cash for used clothes on the spot, a concept that does as much to boost revenue as inventory. "Our advertisements target not only teens but also the mothers who want to put those old clothes to good use," Geyer says. When customers come to the store to cash in their old Tommys and Calvins, they usually end up making a purchase.

Plato's Closet was created by Columbus, Ohio-based entrepreneurs Dennis and Lynn Blum, the husband-and-wife team behind another successful Grow Biz franchise, Once Upon a Child. Always scouting for new franchise opportunities, Grow Biz discovered Plato's Closet in early 1998 and purchased the idea from the Blums. A corporate store was opened in Minneapolis soon after, and teens turned out in droves.

When Grow Biz president Ted Manley dropped by the store during the grand opening, he was confronted with a line of about 100 teenagers waiting outside. "I ended up spending six hours bagging merchandise to help out with the rush," he says.

"We knew success was inevitable with Plato's Closet when we examined the demographics," Manley says. "Many retailers cater to the 64 millionbaby boomers in the United States. But Generation Y, people ages 10 to 24, is almost as large a group at 58 million."

Given that teenagers shop so much, Manley expects Generation Y retail to be exciting in the next 10 to 20 years. "Teenagers average 12.7 shopping trips per month with intention to buy 50% of the time," he notes. "They make 40% more shopping trips than adults, and they patronize mostly specialty and chain stores offering the brands that Plato's Closet carries."

With five stores already operating in Columbus and the Twin Cities, Grow Biz is aggressively seeking franchise owners. Current stores are located in strip centers near regional malls and require 2,500 to 3,000 sq. ft. of space.

"Eventually, we would like to locate inside major regional malls, alongside Gap, The Limited and other retailers whose clothes we recycle," Geyer says.

Plato's Closet uses trendy, upbeat interior design to distance itself from traditional thrift and consignment shops, Geyer says. Black, gray and red make up the color palette. Countertops are brushed metal, and clothes are merchandised according to sex rather than by brand. The store also sells used accessories and other teen toys including CDs, videos and lava lamps.

"The teen market is a hotbed of kids with disposable income," Geyer says. "They spend their cash on clothes, music and food. They shop frequently, and they search out the trendiest merchandise at the most manageable prices. Plato's Closet fits perfectly into where the population is right now."

Contact: Becky Geyer, general manager, Plato's Closet, 4200 Dahlberg Drive, Minneapolis, MN 55422-4837; (800) 269-4081.

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