Rags to riches business: 'almost new' clothing gains respectability

In the past five years or so, while designers have varied hemlines and necklines to capture the fashion market, a small, new-old industry has come into being.

It is the ''almost new'' clothing industry -- a euphemism for secondhand clothing.

Selling used clothes for charity fund raising has gone on for decades. Recently, however, secondhand clothing has begun to shed its charity image and become ''almost trendy,'' retailers say. Goodwill Industries of America, for example, reports serving more middle-income customers than ever before.

And cashing in on this shift of attitudes is a new breed of retailer -- privately run consignment shops that sell used clothing exclusively. Figures are not available on their numbers, but many in the industry report they are on the increase.

Used clothing shops ''used to be run by a charity or by a hospital,'' says June Graves, a consignment shop owner. Now, she finds shops popping up all over. ''It's a business that is really making its own strides.''

Mrs. Graves got into the business 16 years ago because with one boy and one girl, hand-me-downs were next to impossible. From the one-room store in her home and an initial 10 to 15 customers, Graves has expanded her shop to its own building -- a two-story, eight-room house -- which grosses a respectable six-figure income.

The store, located in an affluent Buffalo, N.Y., suburb, sells women's and children's clothing primarily, although the second floor contains one whole room devoted to long racks of never-used bridal and bridesmaids' gowns.

Why do consumers buy secondhand clothing?

''It's not only the economics of it,'' Graves says. ''People are realizing that it's almost sinful to throw things away. Almost all of (my customers) could afford to buy something new, but they know the value of money. It's now become very fashionable for women to say: 'You'll never guess where I found this.' ''

Her merchandise is not more than two seasons old and typically sells for 50 percent or less of the price of a comparable new garment.

For Graves and others in the industry, one advantage of business is that their clothing stock is on consignment. Customers bring in the clothing they want to sell, and it is displayed for a certain period of time -- usually two or three months. At the end of the period, the customer returns to the shop, takes back any unsold clothing, and splits the proceeds with the store owner, typically 50-50.

Many such shops can afford to be picky about the clothes they accept. On Boston's Newbury street, for example, the manager of The Closet only accepts traditional or contemporary-style clothing. ''Nothing funky, nothing from the ' 60s,'' says manager Michael Ziluny. Men's suits, for example, must be made of natural fibers.

''We probably turn away more clothing than we accept,'' he says.

Mr. Ziluny says his customers tend to be young professionals who ''need to have a lot of nice clothes for their jobs but can't necessarily afford to spend