Rarely is a business as obvious or simple as it appears from the outside.

On the surface, a consignment shop seems to be one of the most straightforward, least capital-intensive businesses going.

You take secondhand clothing, accessories, furniture or what have you from consignees, sell it, give them a cut — typically 50 percent — and keep the rest as working capital.

And when times get tough, the consignment business gets even better because hard-pressed consumers shop down market, right?

Well, in Louisville, Ky., it’s a lot more complicated than that, with demand for upscale used goods so strong that it might be the only form of retail where sellers are more important than buyers.

Consignment shop prices rise as mall stores discount

If there is one fact that tells you all you need to know about the consignment business in a recession, it’s that Margaret’s Consignment and Collectibles Inc., shoppers seem to be insatiable at a time mall retailers are slashing prices and running perpetual sales.

With first-half sales up 10 percent so far this year from 2008, “our prices have gone up,” said Margaret Browning, who is a pioneer of the “upscale consignment store” concept in Louisville.

She is getting more money for hot items because demand for new-with-tags or worn-once designer clothing is through the roof, Browning said.

She attributed her ability to get more money for high-end pieces to an evolving consumer mentality that has brought more customers to Margaret’s Consignment who can shop anywhere, but who love a bargain.

Margaret’s Consignment will never be mistaken for a rummage shop. Amid decorator colors and carefully lit spaces, Margaret’s sells more than $1.5 million worth of men’s, women’s and children’s clothing and other items each year.

On any given day, perhaps 10 percent or more of the clothing still has tags, bought off a clearance rack at Dillards and Macy’s but never worn, Browning said.

Established shops have grown over time

Margaret’s Consignment started with few hundred feet of space in 1982. She has expanded over the years to more than 5,000 square feet now in four contiguous buildings, Browning said.

Another consignment shop owner, Charlotte Seelbach, said in the 13 years she’s been open, she’s expanded Sugarbakers Classy Consignment from less than 1,000 square feet to two adjoining buildings.

Sugarbakers has about 3,000 square feet on two levels. Sugarbakers Plus is dedicated to plus-size women’s consignment.

Separating plus-sized apparel into its own 1,100 square-foot space “has been a very, very good business for us,” Seelbach said. “Plus-size (women) are always saying that they can’t find big sizes in the good brands — the Talbot’s and Chico’s. Well, we have a whole store devoted to [them.]