When the recession got tough, the consignment stores got going.
Traditional furniture stores lost customers in the past year as home sales fell and unemployment grew. But business is booming at many consignment stores for used furniture.
Residential downsizings due to foreclosures, financial problems and lifestyle changes have made a huge amount of merchandise available just as bargain-hungry consumers are warming up to the idea of buying secondhand goods.
Some homebuyers who once would have paid $200,000 to $300,000 to furnish a large Scottsdale home are now filling their rooms with consignment furniture and saving a bundle.
New consignment stores are opening up along Scottsdale Road and other retail hot spots to take advantage of the new supply and demand.
Mike Burns just opened Camelback Consign and Design in Phoenix based on the success of a store he earlier opened in Cave Creek. Burns and others are being helped by a glut of empty retail spaces on the market and cheap rents.
"It's getting very competitive," said Nancy Rhodes, owner of Furniture Affair, a 21-year-old consignment store in north Phoenix. In response, Rhodes is considering doing something unheard of in the consignment furniture arena: giving people a short window during which they can return merchandise. Traditionally, all sales are final.
But not all stores are doing well, however. Terri Bowersock, who pioneered the furniture consignment store concept in 1979, has had to close five of her eight Phoenix-area showrooms and has been struggling to pay consignors for merchandise she's sold.
"We got too large, and then the economy got bad," she said.
The troubles faced by Bowersock, the local consignment business' largest player, presents opportunities for new arrivals and existing stores.
Rhodes, who specializes in reselling furniture from model homes, has a large showroom of virtually new furniture and accessories for roughly half the original price.
In general, the large amount of furniture coming on the market because of downsizings is allowing consignment stores to be selective about the merchandise they accept for their stores.
Scottsdale builder John Schnee is downsizing from 7,600 to 2,000 square feet and now has roomfuls of furniture, much of it barely used, for sale at a number of Phoenix-area consignment stores. He said he's sold about 30 percent of it so far — not nearly for what he paid for it — but he's happy to get something for his goods, and avoid having people traipsing through his house.
Kit Yarrow, a retail psychologist at Golden Gate University in San Francisco, said the recent hard economic times have turned consumers into bargain hunters who increasingly recognize the value of secondhand merchandise.