Out Of The Closet Thrift Stores


Founded:

1990

Core Business:

Thrift shop, with proceeds going toward medical care for AIDS patients

Revenue in 1998:

$3.8 million

Revenue in 2001:

$5 million (projected)

Employees in 1998:

70

Employees in 2001:

120

Goal:

To open seven new stores, including its first four in the Bay Area, and to net (after operations costs) $3 million a year for AHF by end of fiscal year June 30, 2002

Driving Force:

Repeat shoppers and repeat donors

Out Of The Closet offers different type of thrift store retailing with a connection to Hollywood and free HIV testing at several of its locations

Out Of The Closet Thrift Stores is not your standard issue thrift store. For one thing, the chain, whose parent company is Hollywood-based AIDS Healthcare Foundation, has an eclectic enough collection of clothes and trinkets to attract dealers from Melrose and LaBrea specialty shops.

Out Of The Closet also stands out because it provides free, on-site HIV testing at six of its locations. More than 7,000 people have been tested for the year ended June 30.

And the garish pink facades of the stores, complete with the turquoise print, Hawaiian print shirt and coat hanger logo, are a marked departure from the subdued approach of more venerable charity-funding operations like Goodwill Industries and the Salvation Army.

“Our Pasadena store is all magenta. It’s like this huge building that takes over the boulevard,” said John Nieto, general manager of retail operations. “We’ve gotten one or two complaints.”

Retail as revenue source

Out Of The Closet is the brainchild of AHF president and co-founder Michael Weinstein, whose retail experience stemmed from his family’s furniture business on the East Coast. Wary of the high costs of putting on charity events and the volatile nature of donations, Weinstein wanted a retail revenue source for the foundation because “the cash register is always ringing.” He opened the first Out Of The Closet in Atwater Village in 1990. The 17th operation, officially called Out, was converted last month to a thrift store from its previous incarnation, the WeHo Lounge coffee house and testing center in West Hollywood.

The stores, which range from 1,000 to 8,000 square feet, are projected to gross $5 million this year, netting more than $1 million in income for AHF and making up about 10 percent of revenues for the organization. Unlike Salvation Army stores, whose merchandise is spread out among furniture, clothing and trinkets, about 60 percent of Out Of The Closet’s merchandise is clothing.

Out Of The Closet benefits from its Los Angeles base and its association with the gay community. Its eclectic array of donated merchandise gives the chain a hip, boutique-like feel. The company has even enlisted Museum of Neon Art founder Lili Lakich to redesign the stores’ logo.

“Because we are located in Hollywood’s backyard, we do get a lot of donations from film and television companies,” said Aids Healthcare Foundation community relations director Ged Kenslea.

HIV tests

What you also don’t get at other thrift shops is free HIV testing. Out Of The Closet began testing four years ago, and currently has the service at six of its locations. Aside from a $20,000 donation from the City of West Hollywood when the program was first instituted, testing has been self-funded.

“We wanted to bring the mountain to Mohammed,” said Kenslea, who noted that the locations are based on “where we have anecdotal evidence that there are high-risk populations.” A testing center is offered at the Hollywood store, where there’s a relatively high percentage of positives, but not at the Fairfax Ave. location.

“Out Of The Closet really works on three levels,” said Kenslea. “It raises dollars for the organization, it puts us out in the community for an opportunity to do testing, prevention and outreach, and it’s marketing for the agency.”

Having the stores and delivery trucks throughout Los Angeles generates an additional $500,000 a year in donations though that could change in the current economic climate.

While donations are down slightly, Kenslea sees the positive side. “People who may not otherwise step into a thrift shop will step (into an Out Of The Closet),” he said.

Nieto added that Halloween is the busiest time of year for Out Of The Closet, and doesn’t expect this to change this year.