Charities talk shop

From online auctions to selling more goods, charity shops are finding new ways to increase their profits

In May this year, hundreds of people descended on London's Westbourne Grove for the opening of the fashionable street's newest designer-brand shop. As the vintage Chanel bags and Louboutin sneakers flew off the shelves, the tills took £2,500 within an hour of doors opening. Not that surprising perhaps for a busy Saturday morning – except that the store in question was a charity shop and all its stock had been donated so the profits could be ploughed back into work with vulnerable children.

The Living and Giving Store is a collaboration between Save the Children and retail expert Mary "Queen of Shops" Portas, famed for her TV makeovers of failing fashion retailers. The west London shop, which had raised £7,500 by the end of the launch weekend, is the second in a planned chain that will sell designer samples, high-quality goods donated by the public and work by local artists. The next shop is due to open in Primrose Hill, also in London, in December.

Living and Giving is the latest innovation to come out of the charity retail sector, which has experienced something of a makeover in recent years with the advent of dedicated book and furniture stores, pop-up shops selling vintage clothes and eBay auctions of donated memorabilia.

According to the Association of Charity Shops (ACS), sales of clothes, books, CDs, toys, bric-a-brac and other unwanted goods help the UK's 9,000 charity shops generate an annual profit of around £120m. Charities with shops raise an average of 20% of their overall income this way.

A recent poll by YouGov SixthSense found that 73% of the British public buys from charity shops. While the sector has seen a decrease in donated goods, year-on-year profits are up 8% – driven by a combination of recession necessity and the "reuse and recycle" zeitgeist.

Cancer research and care charity Tenovus has 67 shops across England and Wales, which last year generated £4.93m – 63% of the charity's total income. It also increased retail profits by over 40% last year, thanks to low-cost shop refits, promoting Gift Aid (which allows it to reclaim an extra 28p on every pound earned from sales) and diversifying into selling new products in addition to donated stock.

Tenovus head of retail Tim Finch says: "For the majority of shops, new goods has meant Christmas cards. But the sector is waking up. Tenovus is looking at ranges that have some resonance with the charity, such as hats and helping aids that are appropriate for our market." Finch adds that unlike donated goods, new products offer charities control over stock levels.

Save the Children retail director Chris Coe says charity shops are a vital part of the fundraising mix, raising brand awareness and attracting new supporters. "Engaging people in communities through shopping is an incredibly effective way of bringing them to our cause," he says.

The charity has recently partnered with Hallett Retail to open Save the Children concessions in Beales department stores in Worthing and Bedford. Clothing stock, premises and staff time have all been donated, enabling Save the Children to run a "no overheads" outlet in a high-profile location. Up to 10 more are planned across the UK if the move is successful.

'Community hubs'

Tenovus is taking its retail side a step further with plans for a new site in north Wales that will combine a charity shop and "community hub" for cancer patients and their families that will offer services such as health checks and welfare rights advice. Says Finch: "We see shops as having many purposes beyond selling goods."

David Moir, head of policy and public affairs at ACS, expects continued demand for sharp retail skills at all levels as charities compete for trade: "I can certainly see specialist shops continuing to take off and many charities are now setting up their own virtual shops," he says.

Skillsmart Retail, the sector skills council for retail, recently teamed up with retail sector charity Retail Trust to offer management training scholarships to charity shop staff. Meanwhile a session on retail formats was one of the most popular with fundraisers and retail directors at this year's ACS annual conference.

Coe at Save the Children says fundraisers need "strategic vision and passion for the cause" to succeed in the retail sector. He says: "If you have that, you will be successful whether it's a volunteer-led shop in Preston, or thinking laterally about engaging new communities."
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