Rags and riches: Thrift-store clothing fuels global economy

2007-03-27T23:00:00Z Rags and riches: Thrift-store clothing fuels global economyPAULA BOCK - SEATTLE TIMES Daily Herald
March 27, 2007 11:00 pm  • 

If you walked into a local Savers thrift store, you'd never guess its trove of chipped crystal and outgrown jeans is a global gateway.

Globalization isn't just about outsourcing. It's also about rags, as used clothes are known in industry lingo. Lots of rags. Last year in this country, we spent a collective $282 billion on new duds, and to clear space for fresh fashion, the average American got rid of 68 pounds of clothing and textiles -- billions of bags donated to thrift stores.

That once-beloved spring dress -- now oh-so-yesterday and a squidge too tight -- has a chance at new life if it's snagged for $3.99 by an immigrant, an artist, or a well-heeled bargain shopper.

And if notfi That same spring dress can be sold for pennies-a-pound on the secondary market to be sold in local bazzaars overseas.

"About 55 percent of our donations make it onto the sales floor," said Savers spokeswoman Amanda Foley. Savers is a nationwide thrift-store chain that is also known as Value Village in the Pacific Northwest and Canada. "The other 45 percent are shipped off to developing countries and material developers in the U.S."

For thrift stores like the Salvation Army, about half the garments donated eventually wind up in overseas market stalls or as industrial fiber. That translates into 17,000 jobs in the United States, an estimated 100,000 jobs in Africa's informal economy and a multinational trade in second-hand clothing valued at more than $1 billion a year.

Between 1999 and 2003, the United States exported nearly 7 billion pounds of used clothing and worn textiles, an overflow that otherwise would have been dumped.

Darshan Sahsi, the son of a small Punjabi farmer, never graduated from high school but considers himself a Doctor of Rags. At 50, the savvy, self-taught businessman is the founder and owner of Canam International, the second-largest grader of used clothing in the world.

Canam has offices worldwide and a factory in Kandla, India, where 650 workers sort and grade up to 300,000 pounds of used clothing every day.

Sahsi runs a small plant with 50 workers. They sort donations collected from British Columbia, Washington, Alaska, Montana, Oregon. The bare-bones warehouse doesn't bother with hangers. It's a landscape of rags: mountains made of castoffs, a rushing conveyer-belt river of clothes, monolithic stacks of neatly sorted bales.

Sahsi paws through a garbage bag full of unsorted rags. He pulls out mint-condition khaki Dockers, "This pant is too BIG!" he exclaims. "No obese people in Africa! Nobody wants over size 38."

Ralph Lauren Polo slacks, stained. "No style!" Sahsi says. Africans want five-pocket pants, hip huggers, bell bottoms. "Poor people are kind of fashionable," he says. "Modern girls! This is true all over the world."

Cotton sweater. "No money! Two washes and it goes. Stretched out." He'll sell it as shoddy, 1 cent a pound, to be shredded for fibers in Panipat, an Indian city clattering with 400 old Italian recycling mills.

Black scoop-neck top. "Black people don't like to wear black clothes. It doesn't look good."

White cotton T-shirt with purple Curves logo. "Wipers." Fifteen cents a pound, to be cut into wiping rags.

Shoes bring up to 90 cents a pound, but no high heels, no canvas, no heavy leather.

Yellow turtleneck. Flannel shirt. Too hot for Africa. "Garbage!"

Garbage, in fact, costs 4 cents a pound to be crated away and comprises 20 percent of Sahsi's take. So he must compensate by selling other items at a profit large enough to cover rent, labor and the $2,200-per-container freight fee between Seattle and India.

He empties the bag, complaining, "No A-Grade."

Rag dealers consider Seattle among the better used-clothing markets in the country because the population is relatively well-off (quality labels) and it's not cold, so they're not stuck with winter clothes too heavy for Africa.

Sahsi pays 8 to 12 cents a pound for castoffs that cost him 20 cents a pound to process. "If I can't make 1 cent per pound," he says, "it's not worth it."

A-Grade, 30 to 50 cents a pound, is reserved mostly for Africa, Chile, the Dominican Republic. It consists of high-quality mens' shirts and cotton pants, ladies' tank tops, good jeans, baby rummage. Menswear commands premium prices because there's less of it. (American women donate three times more clothes.)

B-Grade, 18 cents a pound, includes slightly worn items, ladies' shirts and cotton dresses (bright colors are best).

On and on through 219 categories of clothing that is next re-sorted by destination. This week, a buyer in Angola wants skin-tight ladies' tank tops, small only; children's dresses; baby rummage; socks.

The dregs -- cracked leather jackets and old pillows -- go to Pakistan, a penny a pound.

Neckties flop into the trash along with overcoats, even London Fogs suitable for a lawyer. No market anywhere in the world. Businessmen rich enough to need a tie or trench coat usually buy new.

Canam has buyers in Mali, Tanzania, Gabon, Benin, Mozambique, South Africa, Nigeria, Liberia, Sierra Leone, Senegal, Democratic Republic of Congo, Monrovia, Korea, Chile, Bolivia, Philippines, Dominican Republic, Japan. Several of these countries have banned used clothes for economic reasons, but the rags go overland anyway, bribes at the border.

Some argue that mitumba, the Swahili word for bale, has destroyed Africa's textile industry, especially in Zambia, where every textile mill has closed, and Nigeria, which has lost more than 80,000 jobs in the formal textile industry. But economists such as Pietra Rivoli, author of "Travels of a T-shirt in the Global Economy," blame "corruption, political risk, low education level, insecure property rights, macroeconomic instability and ineffective commercial codes - in a phrase, bad governance."

Rag dealer Sahsi is more concerned with bureaucratic fumbles close to home. Specifically, a Seattle customs officer and a category called vintage.

Vintage is an of-the-moment cultural grab-bag prized by the young and trendy in America and Japan. Western shirts with pearlized buttons from the '80s; Levis with red stitching on the inner seam; 501s; old Mickey Mouse; '70s Grateful Dead concert T-shirts; anything unique.

Specially trained pickers spot vintage, which sells for $1.50 a pound and can retail for hundreds of dollars per garment in the right venue. It's a small number of special garments, less than half a percent of what goes through.

Trick is, the vintage clothes are shipped back to the U.S. from Canada and India, because it's here where buyers from New York and Tokyo come to look. Last year, a Seattle customs officer seized a vintage container, said it was subject to new-clothing tariffs. (U.S. Customs says clothing has to be worn out, unwearable, to qualify as duty free.) Same thing happened in New York to a container of castoffs destined to be shredded for batting. Even though they weren't Canam's containers, Sahsi is incensed.

A matter of respect. What if other countries didn't allow America's used clothing across their bordersfi

"The U.S. is running a trade deficit. Myself, I am buying 150 containers a month, $600,000. Foreign exchange for your garbage. If I want to ship some vintage clothing back to the U.S., I should be allowed. You see, if we were not here, what would happen to all this clothingfi America will never use it. . . . Whatfi You're going to put all this in your landfillfi"

-- Daily Herald reporter Marcie Jessee contributed to this report.


The Deseret Industries Way


Following a different business model on a global scale, the LDS Church-owned thrift-store chain Deseret Industries sells only a very small percentage of its merchandise to overseas rag dealers, while the majority of its unsold clothing becomes charitable donations worldwide.

"Every article of clothing that does not sell in one of our stores is shipped to our Humanitarian Center ... and it is then shipped internationally," said Rich McKenna, director of Deseret Industries.

Working with a global network of missionaries for The Church of Jesus Christ of Latter-day Saints, the company receives clothing orders, which can be filled and shipped out within one week to impoverished families all over the world, McKenna said.

"We also work with global partners, who, like us, are in the business of helping people in need," McKenna said. "Not in selling the clothing, but in identifying people in need."

Much of the unsold clothing is also donated to these charitable partners, who distribute the goods globally as well.

The small percentage that is sold to international rag dealers generates a profit that goes into what McKenna calls a "blanket fund." This fund purchases wool blankets to be distributed in emergencies.

"We like to say that 100 percent of the clothing donated goes to serve the poor," McKenna said. "Either by being given away, or the percentage that is sold goes to purchase blankets for the poor."

Unlike thrift stores like the Salvation Army and Savers, whose largest purchasers are in India and Africa, Deseret Industries distributes the majority of its clothing in the countries of Eastern Europe, McKenna said.

" ... We're dealing with local organizations who are working with the poorest of the poor," McKenna said. "These are not people who would be out shopping at the stores."

-- Marcie Jessee, Daily Herald

This story appeared in The Daily Herald on page B1.

Copyright 2015 Daily Herald. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.