mornin' merrymakers 🌉🧥🪩🧺✨

one of my favorite parts of this multi-city trip is that i'm staying with the best hosts.

friends.

this means a few nights in one neighborhood, then a bag across town to the next one, which often feels like an entirely different city.

it's the best retail research i've ever accidentally done.

you learn a city differently when you're borrowing someone's routine. where they get coffee. which grocery store they'd walk six extra blocks to go to. what's still open at 10 years later & what closed in the pandemic & never got replaced.

hotels put you where the tourists are.

friends put you where the regulars are.

last week i was in the haight & i can’t stop thinking about a very specific stretch of shops.

within a few blocks of each other, the haight has vintage, thrift, buy-sell-trade, & designer resale. all four models running at once side by side only somewhat in competition.

i've walked & studied a lot of retail corridors over my career & i have never seen this concentration, or this range of it, anywhere else. you’re unlikely to recognize any of the store names, but likely to recognize many of the brands they carry.

it’s an odd mix of old & new, touristy & local, grungy & bougie.

my first instinct was to explain it with economics. cheap space once upon a time, or the formula retail stuff i wrote about last week.

that's not it.

this density is older than any of those explanations.

let’s rewind to this same neighborhood almost 60 years ago, when hippies were everywhere, but not a look you could go into a store to buy.

nobody manufactured the look. there was no wholesale line, no seasonal drop, no mall version of it. no pinterest boards. no ig styling guides. the look didn't exist as a product because the entire point was that it wasn't a product.

people built their looks themselves.

army surplus coats. victorian nightgowns. grandmother's furs. embroidered textiles from countries they'd never been to. feathers & flowers galore. work denim that already had someone else's shape worn into it.

secondhand was the only supply chain that could produce the thing they were after.

& what they were after was pretty specific:

the part i find genuinely fascinating is that an anti-commercial idea turned out to be an exceptional retail category. it just took a few decades & a different generation to figure out how to sell it.

because the thing that made the look impossible to buy in 1967 is exactly what makes it worth buying now. it can't be mass produced. it has to be found.

so the stores decided to help with the finding.

what you're actually paying for in a good vintage shop isn't the garment. it's the edit. someone scoured the internet or drove to estate sales, dug through bins, knew which decade that seam belongs to, & said no to nine hundred things so you could look at forty.

the assembly that used to be the customer's job became the product.

& somewhere along the way the economics inverted.

a movement built on the idea that you shouldn't spend money on clothes now supports racks of denim sometimes priced above the new version.

i went into this week thinking i knew these words. i did not.

the biggest aha, & the one that unlocks the rest:

there's no enforced retail dictionary, so stores use these labels creatively. here's the cleanest version from my understanding:

if i missed or misspoke about any of the above, please correct me 🙏

when thinking about these stores from a business perspective, this is what makes the model is genuinely attractive:

→ the inventory cost is often low or free. donated, consigned, or bought well below eventual retail. the merchandise margin can be outstanding.

→ consignment means you don't pay until it sells. you can carry a wide assortment without tying up cash in it. rare thing in retail.

→ scarcity does the marketing. one of one means customers know they'll lose it if they leave. it also means the store is different every week, so people come back weekly instead of seasonally.

→ your customer is your supplier. she sells you a bag, takes store credit, & spends it before she's out the door. one transaction became two & your inventory cost went down.

→ the story does the pricing. this is the one operators underrate. a rack of used clothes with no context is just used clothes. put provenance & a point of view behind it & the same rack supports real margin.

now the part that makes it brutally hard (& one of the many reasons, the pictured above store closed after 50 years of operations):

→ every item is its own tiny project. received, inspected, authenticated, cleaned, priced, tagged, entered, displayed. a traditional store processes 100 identical shirts at once. resale has 100 small administrative dramas.

→ you cannot reorder your bestseller. quantity, quality, size, category & season all depend on what walks in the door. you might be full of clothing & still have no denim.

→ there's no msrp. no standard unit cost to price against. employees make thousands of judgment calls a week & small pricing errors compound fast.

→ the gross margin lies. cheap inventory sounds like magic until you add rent, sorting labor, cleaning, disposal, & everything you couldn't sell. the merchandise margin looks incredible while the operating margin stays completely ordinary.

which is the real tension of the entire category.

the winner isn't the store that buys cheapest. it's the one that can source it, process it, price it, & sell it fast enough to go do it again.

so the numbers that matter are gross margin dollars per item, per labor hour, & per square foot.

a store at 65% margin with slow turns & heavy processing loses to a store at 45% with fast turns & clean operations. every time.

there's that scene in the devil wears prada where miranda priestly takes apart andy's sweater.

the cerulean andy thinks she found on a clearance rack was chosen for her years earlier, by people in a room she will never sit in. runway, then a few seasons down, then the department stores, then the bin.

miranda tells it as a one way trip. the speech ends at the bin.

but every piece hanging on this street already made that trip. somebody's runway, somebody's buy, somebody's closet, somebody's decision to let it go.

then it started over.

the haight is evidence the fashion food chain doesn't have an end in the bin. a garment picks up one meaning on the way down & an entirely different one on the way back up once, twice, or infinite times.

allowing cerulean blue to make many appearances.

plus given how hard it is for bigger chains to open standalone stores here, i’m willing to bet many of these same brands are making sales floor appearances first as secondhand.