Great business leaders achieve success by thinking differently. These pioneers present unconventional ideas to build disruptive ventures that change the world for the better. Chelsea Sloan Carroll is one such leader who harmoniously integrated a desire for accessible and sustainable fashion into a rapidly expanding franchise: Uptown Cheapskate, headquartered in Salt Lake City, Utah. Chelsea and her brother Scott Sloan co-founded the company in 2008 where Chelsea currently serves as President.
Chelsea got an early start in the resale industry by working for her parent’s Kid to Kid resale store as a teenager. This early training allowed her and her brother to launch Uptown Cheapskate while Chelsea was just a college sophomore. Chelsea felt this early start was a strength: although she was young, she was part of the store’s customer base. That heavily influenced the store concept, layout, and feel, and marketing, making sure the brand was tailored to the teens and young adults that Uptown Cheapskate seeks to attract.
Uptown Cheapskate is the ultimate local fashion exchange; it exists to bring affordable and sustainable fashion to the masses. It benefits its buyers and sellers alike by paying cash for clothes and reselling those items in an upscale environment. Local sellers provide the company with stylish clothes they no longer wear, and shoppers benefit from the trendy fashion pieces available in the local community. As store count has grown from a single location in 2008 to more than 100 locations in 2021, Chelsea has seen a substantial increase in Uptown Cheapskate’s reach. Her stores showcase thousands of brands, hand-selected and screened for quality, condition, and style. “We carry clothing that appeals to teens and young adults,” she mentions. “And something I love about Uptown Cheapskate is that it’s not a trendy franchise idea. We’re a clothing store that is perfectly tailored to our local market. Our style evolves since we hand-select our clothing each day. Our fashion changes with customer preferences.”
Chelsea has made a significant contribution to the company’s growth, assisting it to achieve the 117th position in Entrepreneur Magazine’s Franchise 500 for 2021. “It’s our second year running as best-in-class for retail clothing,” Chelsea mentions. “Fashion is the second most polluting industry in the world, and average Americans discard more than 60 pounds of textiles a year. The stores do good and feel good because people can swap out their stylish clothing for cash instead of discarding their items.”
“We design the store layout, support the franchisee in building out their space, and provide the guidebook on how to get the store launched successfully in our local market. We visit you as you start buying to provide additional training and send people to your store to help with opening"
Win-Win-Win Business Model
The company’s foundation rests on recycling and reusing millions of pieces of clothing a year, helping communities conserve and share fashion at affordable prices. Chelsea states, “Our business is a win for everyone: from the local business owner, to the customer who finds things at great prices, to the seller who is able to get money back from clothes they don’t wear anymore. When someone shops at Uptown Cheapskate, up to $.91 of their dollar stays local – unlike a Target where only maybe $.41 of that dollar stays local.” In addition to that, Uptown Cheapskate stores utilize clothing to raise money for causes on which they are passionate. Currently, they have collegially raised more than $600,000 to build schools with the company’s charity partner buildOn. The stores individually also partner with local charities to provide clothing to the people who are in need. Chelsea is proud of her franchisees’ efforts to give back to the community.
As a result of community focus and marketing efforts, Uptown Cheapskate franchise sales have growth – resulting in franchisee profitability. “My personal favorite thing is selling a new territory to an existing franchisee,” says Chelsea. “So many businesses in general fail, so when I see my franchisees find success in their stores and want to open additional locations, it’s a tribute to our business model and the trust our franchisees have in us.” This growth in locations has led to bourgeoning market recognition of Uptown Cheapskate as an upscale resale brand. Chelsea adds, “We don’t need to teach our customers that they can sell their clothes – they know it already and they just want details on how to make that happen.” This recognition as a successful franchise brand was not an overnight outcome but a result of a steady development with adapting to the changes in the past 12 years. She shares, “We’ve updated the store look and feel, and even replaced our dated logo with something more timeless.” The company’s ability to quickly adapt to changes has led to the success of its franchises. She adds, “We adapt with our local market’s preferences, buying in inventory one piece at a time.“
Riding the Resale Clothing Wave
“Resale is just an incredible industry to be in,” she highlights. As per Chelsea, the second-hand market is projected to double in the next five years, reaching $77bn. She believes that the resale sector is growing 11x faster than the retail clothing sector – “and we’ve just hit the tip of the iceberg,” she adds. Her stores are expanding in line with this trend, which is also beneficial to the franchisees. She says, “We’ve found that even as online resale grows, our customers like to touch and feel the clothing – and it’s extremely difficult for an online seller to photograph, inventory, and find a piece that’s selling for $12 (which is our average price point).”
An Uptown Cheapskate store costs somewhere between $280,000 and $420,000 to build out, including working capital. SBA loans are available for candidates that have approximately $75,000 in liquid capital. The company looks for franchisees with strong experience in leadership, retail, marketing, or teaching, and who are excited to work in a fashion resale business. The company expects franchise owners to work in a store full-time in the first year and become proficient in their local market.
The company provides a personalized online training program that polishes individuals’ skills, as well as an internship in the development of a successful store. “New franchisees get a lot of hand-holding in the first year,” says Chelsea. “We design the store layout, support the franchisee in building out their space, and provide the guidebook on how to get the store launched successfully in our local market. We visit you as you start buying to provide additional training and send people to your store to help with opening,”
She says, “We provide marketing, bookkeeping, and operational support – as much as you’d care to have.” If a franchisee is struggling or underperforming, the company provides a support representative who specializes in recalibrating the processes. They will connect with the franchisee to more marketing resources and help it to fabricate stable financial planning to turn the corner. “We’ve closed only a handful of stores – and seen most turn around and make it,” she mentions. The stores are generally located in areas where the population ranges from 100,000 to 250,000 in the five miles surrounding the store. The average American spends more than $600 on clothing each year, which creates tremendous local supply for each Uptown Cheapskate franchise. Chelsea says, “In our smallest markets, that’s 60 million dollars of new clothing per year in the market. We only need $400,000 of that $60 million to be a store that does more than $1mm in sales and returns 20%+ margins to their owner.“
Thriving in the Post-Covid Era
The COVID-19 virus had some impact on the resale sector, but sales and traffic have rebounded across the country – coming back stronger than ever. Uptown Cheapskate saw its best average system sales in 2021, and 17 new units have opened in the last year. Chelsea believes that pent-up customer demand for fashion is driving the growth. She shares, “We do well when the economy is doing well, but because we have the lowest pricing in town, we do great when there is financial uncertainty and when people are being more conscious about their spending.“
Chelsea and the leadership team at Uptown Cheapskate continue to invest in innovation and long-term growth. The company has heavily invested in technological aspects to help the development of Uptown Cheapskate and its sister company Kid to Kid, building out a proprietary Point of Sale program to integrate with its buying software. “Yes, you can open your own resale clothing store,” says Chelsea. “The reason to choose a franchise is that you don’t have to be an expert on everything. It’s easier with support! Our IT department will help maintain and troubleshoot your computers. Our marketing team will design your ads for you and recommend promotions. Our support team will reach out and help you use your many reports to make smart business decisions. And you can rely on a strong network of engaged, positive owners to help you build your own personal business. You get so much from a network, and don’t have to give up your freedom to run your own business.”
Chelsea encourages aspiring entrepreneurs to participate in the business through franchising and use their innovative ideas for the company’s benefit. At present, the Uptown Cheapskate franchise is continuously growing by welcoming on an average of 20 franchisees every year; and will be focusing on establishing new stores in the many remaining territories in the US and Canada, in an attempt to offer a satisfying business opportunity to the seekers who care about strengthening their community in a sustainable fashion.
