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Joining the secondhand fray

Savers takes on Mass. stalwart Goodwill with a for-profit approach to thrift

Juana Vargas of Mattapan browsed through the clothing racks at the Savers in West Roxbury, which will be relocating to Dedham in the fall. Juana Vargas of Mattapan browsed through the clothing racks at the Savers in West Roxbury, which will be relocating to Dedham in the fall. (Wendy Maeda/Globe Staff)
By Megan Woolhouse
Globe Staff / July 8, 2010

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WEST ROXBURY — Katie Garvey has been avoiding malls ever since she discovered Savers, a sprawling thrift shop that bills itself as a “secondhand department store.’’

Garvey of Dedham said she finds nearly everything she needs at Savers and always has money left over.

“I love it here,’’ Garvey, 27, said on a recent morning as she pushed a carriage carrying her year-old son past long racks of clothes, shoes, and hangers sagging with castoff bedspreads and curtains. “My sisters all shop here, too.’’

The economy’s slowdown has helped fuel the growth of Savers, a 40-year-old chain with 245 stores in the United States and Canada, including 10 in Massachusetts and more on the way. The company, based in Bellevue, Wash., recently opened a store in North Attleborough, and a Framingham Savers is scheduled to start doing business today. A Worcester store will open later this month, and a Savers in West Roxbury is relocating to a more spacious site in Dedham in the fall.

That will give nonprofit Goodwill — which has dominated the secondhand goods market and practically invented the thrift store concept in Boston about 100 years ago — a run for its money. Goodwill has 22 locations in Massachusetts, with an Amherst store scheduled to open tomorrow. The organization uses sales proceeds to fund its charitable mission offering job training to uneducated, disabled, or displaced people who struggle to find steady work. Savers is a for-profit with more than $750 million in revenues last year.

“They’re a competitor, no doubt about it,’’ said James Harder, a spokesman for Morgan Memorial Goodwill Industries Inc., which operates 11 Goodwill stores in Massachusetts. “We’re the model for others that come along.’’

It is a model that has changed in recent years, as thrift stores start to look more like TJ Maxx and less like graveyards for discarded stuff. Unlike the cluttered, stale-smelling charity thrift stores of yesteryear where mostly low-income or frugal consumers foraged for deals, new stores are cleaner, brighter, and offer amenities like changing rooms and bathrooms.

In the Attleboro area, for example, a new Goodwill store and a new Savers store sit just a quarter mile apart. Both offer clothes, furniture, and evening gowns. There are worn but not worn-out shoes, discarded dishes, and used nightgowns and men’s underwear displayed across a sprawling floor space. Credit cards are welcome.

“We want our customers to feel like it’s a retail shopping experience,’’ Ken Alterman, Savers’ chief executive, said.

Neither Goodwill nor Savers stores pay customers who drop off donations, but Savers does not rely solely on donated goods to build its inventory. Each store partners with a local charity, paying the organization a fee based on the volume of used merchandise it collects for Savers.

At the West Roxbury and Danvers stores, the chain has an agreement with the Big Brother Big Sister Foundation, the nonprofit that pairs young people with adult mentors. The North Attleborough store funds the Epilepsy Foundation of New England.

Signs at the front of each Savers store advertise the chain’s charity connection, but the company does not disclose what percentage of its revenue goes to nonprofits. Alterman said the chain works with nearly 200 charities nationwide, giving them a reliable source of funding, even in tough economic times. While he acknowledged that Savers prices are “a little bit higher’’ than those at Goodwill, he said the company also pays local taxes, unlike its nonprofit competition.

“This is America, it’s OK to make a profit,’’ Alterman said. “We’re not making it on the backs of Goodwill or Salvation Army. We’re just another retailer in a similar line of business.’’

Yet Savers is going head to head with Goodwill and not just in Attleboro. The company already has 21 stores in Massachusetts, Connecticut, New Hampshire, and Rhode Island and plans to open at least five more across New England in 2011.

Jon Hurst, president of the Retailers Association of Massachusetts, called Savers’ expansion push “a sign of the times’’ in a lagging economy. He said it is too soon to determine how the increased presence of Savers will affect Goodwill or other nonprofit retail outlets, like Salvation Army, which operates 30 stores and drop-off locations in Massachusetts.

Both are high-volume operations. The new Savers in Framingham will fill a vast, 24,000-square-foot space vacated by Comp USA.

“Sustaining that much floor space you’ve got to really turn a lot of product,’’ Hurst said. “Certainly, they can do that now, but will they be able to do that five years from now?’’

In fact, Alterman anticipates Savers being an even greater force in the marketplace by then, with plans to more than triple in size to 800 stores worldwide. The company has been funding its growth by courting investors and working with lenders. In 2005, it raised $500 million for the expansion through the Los Angeles private equity firm Freeman Spogli & Co., the company’s chairman, and a bank loan.

Yet customers shopping at the Savers in West Roxbury said they cared little about the different missions of Goodwill and Savers. They were just looking for good deals.

Alex Cadet, a part-time EMT and taxi driver, browsed through the selection of books and DVDs, showing off a hardcover Bible he found for $2.99.

“I’m trying to save some money,’’ he said.

Kristen Gardner of Newton searched for bargains, too. She said she once found a pair of name-brand jeans that had an original retail price of $150. Savers sold them for just $5.

“I’ve always given my old clothes to Goodwill,’’ Gardner said. “Now I bring them here.’’

Megan Woolhouse can be reached at mwoolhouse@globe.com.