Consignment shop flourishes amid economy

By Farnoosh Torabi | Special to amNew York

6:00 PM EDT, May 11, 2008

Bucking the nationwide retail slowdown, Upper East Side consignment shop Michael's continues to ring up impressive sales.

Owners say the economy hasn't deterred New York's fashionistas --on the hunt for discounted designer-label goods --from flocking to the 54-year-old boutique.

"We're pretty recession-proof," says Tamara Gates, head of business development at Michael's. Gates is the granddaughter of Michael's founder, Michael Fluhr, who died in 1992. Today Gates, with her mother Laura Fluhr, runs the Madison Avenue store.

One explanation for the store's ongoing profits in a down economy is its flexibility in selecting inventory, Gates says.

"We can choose what to take and what we know sells. We can also choose not to take certain items," she says.

Meanwhile, traditional retailers may need to hold on to stocked items until they're sold. And when they don't sell quickly, products may face steep discounts. "We also don't have to forecast out," Fluhr says. "Retailers usually have to forecast six to eight months out about the economy and fashion trends. We don't have that restriction."

What's more, say the mother-daughter duo, women are dropping off more pieces and much higher-end items.

"The caliber of merchandise we're getting in is 15 percent richer than what we were getting in the past," Fluhr says. This may suggest that the down economy is encouraging women to trade last season's Prada bag for much-needed money.

"People have gotten smart," Gates says. "They realize they can reclaim some of that cash."

Through the decades Michael's has made a name for itself as one of the premier consignment shops in the city, offering a competitive selection of pre-owned couture and designer-label items from Chanel, Gucci, Prada and Hermès, among others.

The inventory arrives daily from local New Yorkers, celebrities and estate inheritors looking to make money off of fashion items they no longer want.

"[Consigning] is also much more acceptable and politically correct thanks to the whole 'go green' philosophy," Fluhr says.

For consigners, the owners say it's best if pre-owned items are less than two years old with their original labels. Consigners can earn 50 percent of the resale value. The store's "consignment ABCs" can be found at www.michaels consignment.com.