Oxfam Shops Head Upmarket

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David Levene / Oxfam

Oxfam's revamped boutique in Notting Hill, London.

Frances Weeks, manager of a boutique in London's hip Notting Hill neighborhood, proudly holds up a dress by Italian designer Emilio Pucci. Such frocks usually come with a stratospheric price tag attached; she's selling this one for a mere $200. Oh, and how about those Prada evening shoes she's got priced at just $140? They'd usually set you back several hundred bucks. So what's the catch? Well, most of the chichi clothes, shoes and accessories on sale at this shop are ... well, preworn. Weeks' boutique is in fact an upscale version of the ubiquitous Oxfam charity shop, a humble mainstay of Britain's shopping streets.

Sixty years ago, Oxfam pioneered the notion of raising cash by selling donated clothes and goods from charity shops. Now it has decided the concept needs tweaking. Most of Oxfam's 730 shops across the U.K. are slightly dowdy affairs, crammed with a wide variety of used clothes, bric-a-brac, books and CDs. But the Notting Hill shop — one of three in London recently reopened as high-fashion boutiques — looks downright chic, with polished dark-wood flooring, arty light fixtures, and top-brand ladies' wear displayed on stylish wrought-iron racks. The shop also sells brand-new fair-trade clothes and accessories typically made by London College of Fashion students from organic fabrics, as well as one-of-a-kind items made from recycled clothes and other materials. One smart-looking jacket on offer for $130 has shoulders fashioned from baseball-cap bills.

Oxfam is hoping its flight to fashion will boost sagging sales. In 1999, its profits hit a high-water mark of $54 million but have been sliding since, down to $20 million last year. The slump is largely due to increased competition — not only from rival charity shops, but also from discount retailers like Primark and Peacock, which sell trendy new clothes at prices nearly as low as those found in secondhand shops. Says Sarah Farquhar, Oxfam's retailing head: "We realized we needed a different clothing-business model."

Creating specialty shops dedicated to high fashion was the natural answer. Some Oxfam regulars already knew they could often find real gems buried within the jumble of dull duds packed into ordinary shops. Oxfam had already had good success with other types of specialty stores: it has 120 used-book shops in the U.K. and recently opened five shops dedicated to selling used vinyl LPs and CDs. Farquhar says the Notting Hill shop's makeover should increase that site's revenues 100%. The boutique's average sale is $40, four times the average sale at a regular outlet. The other two Oxfam fashion boutiques are in the wealthy London enclaves of Chelsea and Chiswick. Oxfam expects to eventually extend the idea to upmarket urban areas around the U.K.

There is no shortage of stock, and nothing goes to waste. Oxfam receives around 150 tons of clothes each week, which are typically sold at the shops that receive the donations. That's why the designer boutiques are expected to work best in posh areas. "Like attracts like," Farquhar explains. Clothes deemed unsuitable for sale at individual shops end up at Oxfam's "wastesaver" operation in Huddersfield, north England. From there, some are sold via Oxfam's online shop, while others are sold in bulk to dealers in developing countries. Clothes that are completely unwearable are shredded and sold for use as mattress stuffing or automotive soundproofing.

Clearly, dresses from Pucci and Diane von Furstenberg aren't shredder bound. But who are their likely buyers? "Women looking for value for money," Farquhar says. "People who want something different to express their individual style, who like mixing pieces together." Women who initially come in attracted by the new fair-trade labels are buying used items, too, she says. So far, secondhand merchandise accounts for half the shop's sales. On a recent weekday morning, a range of shoppers, young and old, came in to browse or buy. Twentysomething Caroline Dunlevy, who was making her second visit since the boutique opened, admitted it's changed her perception of what a charity shop could be. "It's really a cut above the others," she said. Real quality is always good for a second go-round, especially if the price is right.