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Thu December 4, 2008
Is bad economy good for business?
By Angela Hatton
Murray, KY – Locally-owned Rita's Neat Repeats in Murray has been selling men's and women's consignment clothing for over seven years. Unlike some bigger retail stores, owner and operator Rita Jameson hasn't seen a drop in her sales. Jameson says her sales have been secure over the past year. She says usually there's a dip in January and December, but so far, this hasn't happened. Jameson believes Murray's college town atmosphere makes for a better market.
"On top of a usual town this size consignment that would be coming in, once you add the college girls and guys clothes that come from all over the United States, that it makes even better consignment store."
Jameson says all age groups shop at her store, but says those thirty and over tend to wait for the sales, while the younger crowd comes in all the time. One customer, Mary Jean Hill, says she's been shopping at Rita's Neat Repeats for about five years. Hill can't afford to pay full-price. She prefers consignment most of the time.
"It's really cheap for me for me to come get and it's better when you got - with two kids and low income you gotta do what you gotta do and they look brand-new so why not, y'know, [(slurred) no-one ever knows], so it's all good."
Jameson says one of the bigger changes she's seen this season has been an increase in the number of people bringing in clothes.
"People are looking to, uh, move things out and make a little money."
A store doing well during the economic crisis may seem unusual, but Murray State University Department of Economics and Finance Chair Dr. David Brasfield says it's not surprising Rita's is holding steady, especially during a recession.
"The types of businesses that cater to the used good market, particularly the types of businesses that would undercut the price or your normal retail stores, they'll do fine."
Jameson says her prices run about half the ticket price of low-end retail and as much as a fifth the cost of high-end retail. She says she determines cost by what she thinks is fair.
"We did not price our clothes to stay competitive with anyone in the area or anybody else's ideal. What would we pay?"
Laura Lee-Croft thinks her prices are pretty good too. Croft co-owns and manages Elements, a relatively new home-d cor and gift shop. Croft doesn't get many customers who say they're having to pinch pennies.
"We get more people saying I can't, y'know, your prices are so good.or y'know, I can't believe this is this price, in a good way. Hardly ever do you have somebody that's just like I can't believe that's that expensive or y'know, anything like that."
Crofts says she was worried when she and her partner opened the business a year and a half ago that some of the bigger ticket items, like furniture, wouldn't sell as well, but the buyers seem to keep coming and Crofts's business keeps growing.
Again, Dr. Brasfield says this isn't unusual either.
"People, if they're not buying new homes, fix up their old home. They're gonna be here for a while so let's see if we can make some home-improvements here or there. Elements would fall into that kind of niche."
Croft has a bit of a different take on this situation. She believes there are just some times of the year when people are going to spend no matter what.
"If ever it's a time to buy and spend money, it's at Christmas. It's a feel-good thing. Forget the economy, forget everything else, we want to celebrate Christams and spoil our family with gifts. So really, noth--, I mean, no I haven't seen a change with the economy and I'm thankful that people's mindsets aren't totally bruised by it."
For economists like Brasfield, the shift in consumer spending to niche stores and used good markets is a reactionary effect, not a long-term consumer change. He predicts after a few years of saving, most people will be back in a more secure financial position. And then, he says, they'll go back to buying bigger ticket items. But until then, for local entrepreneurs like Rita Jameson and Laura Lee Croft, the market looks good.
For WKMS News, I'm Angela Hatton.