The thrift retail environment is vastly different from mainstream retail. America's Thrift Stores is one of the largest thrift store chains in the southeast United States and is guided by more than profit.
“We minister in three areas,” President and CEO Timothy Alvis says. “We support Christian ministries, we provide a lot of jobs as we have more than 1,200 employees, and we provide a product that anyone can afford to buy with dignity.”
Founded in 1984 and headquartered in Birmingham, Ala., the organization has 18 stores in Alabama, Louisiana, Georgia, Mississippi and Tennessee. Last year, San Francisco-based Alpine Investors acquired the company. America’s Thrift Stores collects, processes and markets more than 50 million pounds of donations each year.
America’s Thrift Stores has made a commitment to providing quality, affordable merchandise and excellent service. And it recycles millions of pounds of items, keeping them out of landfills. But its purpose goes far beyond those considerations. The company supports Christian-based, family focused ministries that spread the word of Jesus Christ.
“We get no funding or grants from the government,” Alvis says. “Everything we get, we earn, and at least 51 percent of our net profits go to our ministry partners.”
The company obtains its products in a number of ways. One avenue is through the purchase of new and used items from local charities and department stores. America’s Thrift Stores donates a sizeable portion of its annual revenue to its ministry partners. The nonprofit ministries that America’s Thrift Stores purchases from and works with include American Family Foundation, Teen Challenge, Home of Grace and King's Home.
America’s Thrift Stores also gets its stock from the donations of usable clothing, shoes, household items and books. The organization has dozens of manned and unmanned donation locations throughout its service area.
“The thrift business is unique and has very different methods of buying and managing inventory, and figuring profit margins,” Alvis says. “You have to place a value on the donated goods. We have costs such as labor and transportation as part of collecting donations. And there isn’t a never-ending well of donations, as people donate in cycles. The key to our industry is the grading process. The more accurate the grade of the merchandise, the more money we make and the more money goes to our ministries.”
Growth Means Salvation
America’s Thrift Stores has seen record growth in recent years. In 2008, the company dedicated itself to what Alvis referred to as its “Simple Plan.” The process is “IPO”: improving its product, precise processing and outstanding customer service.
Part of the growth stems from the difficulties faced by traditional retailers over the past few years. Alvis says the retail landscape in the region had been overbuilt prior to the economic downturn. Once the recession hit, mainstream stores closed, prices rose and inventory was dumped. Alvis says this created an environment that drove many regional customers toward America’s Thrift Stores.
That isn’t to say there haven’t been challenges during this growth period. The economic downturn has also had a marked impact on the volume of donations, which Alvis says has been trending downward for the past four years. There has also been an influx of new thrift store operations, so there are more entities competing for fewer donations.
Last year, the organization made several trips to China to buy merchandise to supplement its inventory. Although Alvis says the trips ended up not being worth the effort, it didn’t negatively impact what was a record profit year for the company.
This year, America’s Thrift Stores set a goal of being the best at collecting donations in the world. It has expanded its collection operations, buying more trailers and expanding into new markets.
There will be challenges in the years ahead. Alvis says the looming specter of healthcare reform is concerning because of the added costs the company will incur. But America’s Thrift Stores has faced these kinds of issues before, such as with minimum wage hikes. What the company is adept at doing is learning how to do more with less.
“We redesign processing areas and change the way we do things if necessary,” Alvis says. “In fact, we have the same amount of people now with 18 stores as we did 10 years ago with 12 stores.”
It also has launched smaller stores that are satellites to larger stores. Thus far, the company has opened satellite stores in Gardendale and Prattville, Ala., to supplement its Alabaster, Ala., location.
“The satellite store concept allows us to decrease the labor cost of operating a location while increasing sales and profitability by focusing on our top-selling categories,” Alvis says.
Ultimately, America’s Thrift Stores judges its success by how well it can serve its ministries. The organization is confident that it has a sound strategy.
“We are going to support the ministries and treat people the way we want to be treated,” Alvis says. “We will always be honest and do things right, no matter how hard it is.”