FranNet Verified Brand
FranNet Verified Brands are reviewed by FranNet to ensure legitimacy and industry required documentation.
|Liquid Capital Required:||$100,000|
|Net Worth Required:||$250,000|
|Total Investment:||$146,400 - $425,300|
|Financing:||Via 3rd party|
|Incorporated Name:||The Closet Trading Company, LLC|
|Home Office:||Santa Monica, California|
About The Closet Trading Company
The Closet Trading Company is a resale clothing store based in Southern California. Operating since 2003, The Closet Trading Company works primarily on consignment, which means franchisees pay for their inventory after they sell it! Most other resale outlets work mainly on a cash basis, which means they pay upfront for their inventory and then they try to sell it. Consignment creates a cash flow benefit that is a game-changer for our franchisees. And they are not stuck carrying the cost of unsold inventory. The Closet Trading Company business model presently includes three revenue streams: consignment sales, resale sales, and wholesale sales. Our future plans call for adding Consignment Concierge services, Authentication Services, and Studio Services.
Values & History
Our StoryJohanna Zlenko moved to Santa Barbara, CA in 2003. While attending school she helped open a vintage shop called "The Closet". Within months, Johanna took over ownership of the fledgling business and ran the shop while attending UCSB. A second location was opened in Westlake Village, CA, in 2008. Around the same time, Taylor Lambert came on as a Sales Associate at the Santa Barbara shop, later becoming an integral part of day-to-day operations and growing into her current role as COO. We began doing business under the name "The Closet Trading Company" in 2009, and in 2011 we opened our third location during the Great Recession. Reduced leases and a surge in up-cycling culture allowed us to thrive. Since then we have been continuing to develop and refine our business, launching our franchising option in 2019.
What We ValueOutstanding customer service is second to none at The Closet Trading Company! We prioritize a FUN and engaging customer experience that results in a loyal customer base and regular clients. The key ingredient is our staff of professionally trained stylists who offer complimentary one-on-one styling tips to help nurture customer relationships and increase loyalty. Our focus on "wow-ing" the customer increases the frequency of store visits. Customers come in more frequently for our new arrivals, and to visit their favorite stylist! Not to mention, our business model creates a natural buying cycle that reduces the environmental impact of the retail clothing industry. This inspires a greater sense of responsibility in local communities and the impact we have on our planet.
We are a recession-resistant business and flourish in economic downturns. We opened two stores during the last recession, and observed a new dynamic to the rationale in the market. We found that customers are more open to selling their luxury goods when times are lean, and that more women grew open to the idea of shopping resale, so it is a win-win. As other retailers shuttered, we also benefited from the higher overall vacancy and lower lease rates. Additionally, with our Agoura Hills, CA location we proved that this model is effective in a quiet neighborhood shopping center in the suburbs and not just in tourist-driven destinations. The Closet Trading Company can truly work anywhere, at any time!
Purchasing a The Closet Trading Company Franchise
The initial franchise fee for one The Closet Trading Co. franchise is $40,000. The total initial investment range for one location is $146,400 to $425,300. Qualified individuals can purchase additional franchises at a reduced initial franchise fee through an Area Development agreement. Financially, you are expected to have a net worth of $250,000 or more, with at least $100,000 liquid assets. And, with our new-franchisee inventory support there is no need for the franchisee to be out-of-pocket for months paying rent, payroll, and other expenses while they are trying to build their inventory. They can start selling and generating revenue as soon as they open their doors!
Ideal Candidate & Qualifications
There are hundreds of reasons to franchise, and hundreds of franchise opportunities out there. We want to be sure you are doing it for the right reasons and that you have the emotional intelligence to accompany your abilities. As in, you have an affinity for hard work, but your ability to develop deeper connections with your employees and customers will create an unrivaled loyalty and trust that have the potential to make you more successful. As a franchisee, you are expected to be a motivated, friendly, driven, ambitious, and ethical individual that possesses:
- Business and/or retail management experience
- Entrepreneurial outlook and sales-oriented mindset
- Willingness for cooperation and communication
- Ability to generate growth through hands-on business/marketing activities
- Embrace and contribute to the ethos/sentiment of the brand that is The Closet Trading Company
Training & Support
The Closet Trading Company takes training seriously. Franchisees can choose to run their business full-time or be semi-absentee and hire a full-time store manager. In this case, store managers will be required to attend our initial training program along with the franchisee. c In addition to training, The Closet Trading Company has developed a comprehensive integrated marketing program that includes: digital marketing, print media, social media, and a robust organic campaign to assist our franchisees in gaining a solid, repeat customer base to become a leader in their markets. We also provide our franchisees with the tools, training, and advice they need to curate the majority of their starting inventory. We'll even provide inventory from our existing stock, if needed, to ensure a well-stocked grand opening! This saves our franchisees time and money which can be spent developing the rest of their business.