Michael's Consignment's Owners on Spotting Designer Fakes

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In the market for an Hermés Birkin? Consider picking it up at Michael's Consignment—you'll save yourself thousands of dollars, and nobody will know that it's second-hand. That's because the 60-year-old Upper East Side shop prides itself on carrying pieces from the "highest-end labels" that are in "pristine condition," turning one woman's cast-offs into another's dream wardrobe.

And for half of the store's lifetime, Laura Fluhr—Michael's daughter—has been in charge of what's on its coveted shelves, including seasonal clothing that's less than two years old and the recent infusion of "edgier, younger, hipper designers," most of which is found during on-site closet cleanouts. Her daughter, Tammy Fluhr-Gates, joined in 2006 as the director of business development.

Read on to learn more about how the mother-daughter pair run one of the city's best consignment shops, including why it's "the smartest business model" around, some of the most memorable pieces they've ever seen, and how they learned to spot counterfeit goods.

It must be great to be part of a family business. Laura, did you plan to follow in your father's footsteps?

Laura: No. I had absolutely no intention of coming into this business. I actually went to college and graduate school [for education]—I was on a completely different path.

What was his vision for the store in its early days?

Laura: He had been in retail most of his professional life. He worked for Macy's, and he had a couple retail stores of his own. He just thought that this was an incredibly smart business model, the consignment model, in that you don't own inventory—it's just a pass-through. I think his vision was to establish the finest consignment store in the country, and I think he accomplished that.

Tammy: My grandfather's grandfather had a consignment store on the Lower East Side at the turn of the century, so we've actually been doing consignment in New York City since the very early 1900s. It was called Cast Off Clothing and Furs.

Michael moved consignment uptown, and opened the store up here. So his vision for the store was partially motivated by family experience and legacy. It's genetic for us to be doing this business.

And Tammy, you came here in 2006. Why did you come to Michael's?

Tammy: I also had never thought that I would work here. I was in California doing PR and marketing, and I came back to New York to get my master's in social work. I worked in social work for a number of years, but just decided that the entrepreneurial spirit runs through my blood. And I loved social work—

Laura: She does a lot of it here!

Tammy: —but felt that the business side of things was more calling to me. Both Laura and I came into the business with a very strong business sense.

Laura: As opposed to a strong fashion sense.

So the fashion knowledge came along with the job?

Laura: I think a lot of retail people are motivated first by fashion, and catch up with the business part after the fact. We came into it with an appreciation of the operations, the business, the marketing, and all of that. And it was nice that it was in fashion.

Tammy: We definitely like fashion, it's not that we don't—it's just was not the driving factor to get into the business. For me, it was that this was a win-win-win, and I think there are few businesses where everyone comes out happy. We obviously are happy because we're able to make the match between the consigners and the customers; the consigners are happy because they're able to make money on clothing they no longer desire; and the customers are happy because you don't have to pay top dollar on something that they may want.

You can make changes as the environment changes. You don't have to forecast out, that was appealing to me.

Laura: It's very fluid.

Tammy: It's the smartest business model I know, and that's what brought me here.

Is there a fashion or vintage education that either of you went through?

Laura: No. It was the "school of hands-on."

Tammy: I think, in fact, this is where you get your education. This is the only place ... you can't get the information you would need to successfully run this kind of business pretty much anywhere else, except for being in the business and doing it.

Laura: But we didn't take any classes, or go to any, specific fashion-oriented things.

Tammy: When Laura took over, my grandfather had been here for 30 years, so she learned from the people that worked with him. And now she has 30 years of experience on her own. From a fashion standpoint, you can't get these kinds of classes at FIT. We have relationships with a lot of the fashion houses and they help us with understanding what's going on.

[And] our consigners teach us things, too. We learn from our customers and consigners about what's going on.

Laura: We read magazines, and we talk to people. I just got back from Paris two days ago—that's a lesson in fashion for you.

What do each of you do in the store?

Laura: I have everything to do with operations: the merchandising, the salesmanship. And Tammy has everything to do with everything outside the store. All the social networking, the online store, the advertising, the PR, the HR—she takes care of all that.

What's a typical day like working in the store?

Laura: My day is very unstructured because I have two of the best in-store mangers around. I'll come in and I'll hang out with customers for a while—I'll visit with folks, people in the store that I have relationships with, and if there aren't [people that I know], I try to establish relationships. And when I go work in the back, I do merchandise intake and help with pricing. I'm paying the consigners as things sell, I take care of the banking, I take care of any problems, complaints, issues, and answer phones.

Sometimes we go out to clients' homes, we do closet cleans and pick-ups. And that's one of my favorite things to do, I love that.

Tammy: The pick-ups are a fun part of what Laura does. I don't do pick-ups as much—my job, when I come in, is more of the back-office stuff: administrative, business, marketing, PR. I'm not in the front as much since I run the online store and social media.

Any good stories you can share about going into people's closets?

Tammy: Typically, when we do pickups, we have some idea of what we're getting into. People call beforehand, and we talk about what they have.

Laura: We vet things very carefully before we go to people's homes.

Tammy: Right. But we have consigners that have been with us since my grandfather was here. So there's great deal of trust. I mean, we have a lot of famous customers and consigners.

Laura: [At one pick-up,] we opened the jewelry box and she said, "Take what you want." And I said, "Don't you want to—this is an emerald bracelet!" "Don't worry about it, just send me a receipt!" We were a little staggered.

And then we got a big shipment—we get a lot of things shipped from out of the city. Remember we found that little belt in the shoe, and there was a diamond bracelet, and an aquamarine pin with diamonds around it? We're probably talking about $100,000 dollars worth of jewelry. And I called her and I said, "I have this stuff, I think it was a mistake?" And she said, "Oh my God, I've been looking for that!" So we shipped her the jewelry back. We have a good reputation for having of integrity about those kinds of things.

When you're bringing things into the store, what are you looking for?

Tammy: I'll give you the spiel that we give to people when they ask what we take: We take things that are less than two years old. We take seasonally, so if you're going to wear it now, that's when we're going to have it in the store. That's because we process things daily—they hit the floor the same day or a day after. They have be high-end, with the labels in tact. They have to be in pristine condition. So what I mean by that is the shoes are carpet-worn, like these?

The only exceptions of taking items that are more than two years old are Chanel, Pucci, and Hermés, because those three designers hold their value in the secondary market in a different way than some of the others.

Laura: They have to be real—obviously we don't take faux product, because that's against the law.

Tammy: And the labels are the highest-end labels—we don't take second-tier labels. So we take Donna Karan, but we don't take DKNY.

Laura: If someone has multi-tier branding, we try to stay at the top of the pile.

Are there any examples of things that consigners bring in frequently that you won't take?

Tammy: I think that people understand what we take and they don't really try to bring us things that we don't take. We do the best that we can to make sure that the consigners know the types of merchandise that we have, so that doesn't happen that often.

Who is your typical shopper?

Tammy: That's another reason why I love this business—our typical shopper runs the gamut. So our customer could be the 20-something who wants that one special item, and can't necessarily afford it, and so they're sprinkling their wardrobe with some higher-end things. And she could be the woman who can shop on Madison Avenue in any store she wants to, but why would you pay more than you have to for an amazing piece?

Laura: Why pay a million dollars when somebody else already has?

So on the other end, who is your typical seller?

Tammy: It's the same person. It's the young, up-and-coming girl who bought a pair of shoes, and they just don't fit her—she wore them out once and they just hurt a little bit. So she brings them in, and she only has the one piece, but she's a consigner. And then it's the A-list celebrity who clearly can afford anything she wants—

Laura: She'll send us 500 pieces a year.

Tammy: —but can only wear it once.

Laura: Or the girls who work for the magazines, or the girls who work for the different fashion houses who get a lot of product in their closet.

Tammy: Or the very high executive, Fortune 500 women who definitely have money and power. It's recycling.

Laura: We have some clients that we sell things for, and the checks go to charity. We represent them with the charity, because if a client has a high-end closet, we can get more money for that closet than if she just dumps it at a charity . We can monetize it at a better rate, and then send the check to the charity.

What are your price points here—high, low, average?

Tammy: We have a bag right now that retails for probably $50,000, $70,000 dollars? And we have it here for—

Laura: I think it's at $38,000—the black [crocodile skin].

Tammy: But $38,000 is an anomaly.

Laura: We get brand new stockings from Wolford and they can be anywhere from $25, so that would be very much on the low end. And then what Tammy said, that's the high end. But the average ticket is, $250, $275, $295, it's in there. It changes.

Tammy: And obviously for different categories, it's different. Handbags will have a different average than tops will. But the average would probably be around $250 to $300.

What would you say is your average for handbags?

Tammy: Probably more like $450?

Laura: Yeah, $395 to $495.

And how do your markdowns work?

Tammy: Everything takes an approximate 20% markdown every 30 days. So [a pair of Louboutins were priced] at $495, then it went to $395, then it went to $325 ... The retail price was probably closer to $800.

What are some of the most memorable pieces that you have taken in and sold?

Laura: One that comes to my mind is a Louis Vuitton piece that came in—it was pretty extraordinary. It was a from consigner in Italy, and nobody knew what it was. I took it Louis Vuitton and the salesperson said, "Oh that's not ours, sorry." And I said, "Yeah, I'm pretty sure it is." ... And as I'm having this conversation, the store manager walked by, and she said, "Oh my god, where did you get that? There was only three of those made for the runway for the Milan shows last year!" So that was a pretty outstanding piece, in that it it was very noteworthy piece.

Tammy: We had a hot pink ostrich Birkin, which was gorgeous.

Laura: That was a cute story too, because the woman who brought it in was a very unassuming young woman. You know the story about this one?

Tammy: No, actually, I don't.

Laura: "I was like, "Where did this very lovely young person even get this bag?" So she explains to me that her husband was in the military and had been away for a while, and on the way back he stopped in Paris with his outfit and he bought it for her. He spent his whole military check [for the year] because she had been alone with the kids and had to keep the house together. I'm almost going to cry, because she was so sweet about it. When she brought it in to me, she said, "We really can't afford this bag and we need to monetize it." They were moving to Texas needed the money. He was trying to do such a nice thing.

How much did that sell for?

Laura: I think we sold it at $18,000. And he paid more. I haven't thought about that young woman in a very long time. She was very nice. She brought us a Louis wallet, too—she brought us a couple of very well-selected things. Her husband must have had a very good eye, or someone helped him.

You had mentioned fakes earlier—obviously, there's no fakes in this store. Do people try to pass them off to you, intentionally or unintentionally?

Tammy: Yes.

How do you spot them?

Laura: That's just what we do. Each designer or manufacturer has their own [system]—I can't give you one answer, because it's different for every one. In some cases, it's the leather. In some cases, it's the stitching. In some cases, it's the hardware. In some cases—

Tammy: The label.

Laura: —the way the label's done.

Tammy: The way the dress is finished.

Laura: In some cases, Chanel never made a purple bag in that size. It's a lot of information.

How do you get that information? How do you retain that Chanel did not make a purple bag in a certain season?

Tammy: There's nothing that you can prepare—It's definitely about your experience. We do rely on some of our customers and consigners to give us some of the information. We do research all day long ourselves. Laura—singlehandedly, because she's been doing this for 30 years—has probably held more pieces from more designers over more years than probably anyone in this industry.

Different manufacturers have different sort of telltales. And there are some designers that change that frequently. So they don't have one way—they have ten ways, and you have to know all of the different ways.

Laura: There's the smell. We have all different sort of acid tests. We have people in the industry we work with. It used to be a lot easier, because we all used to work with people in organizations like Chanel and Hermés that would help out with the bags if we had a question. They won't do it anymore, so now we're on our own.

Why did they stop doing it?

Laura: I think that they are trying to protect their brands and don't want secondary markets to erode them, and also don't want to give out information about the authenticity of their labels … It was a very direct stream to the bad guys.

Do you think what you have in your store is reflective of Upper East Side style?

Laura: Clearly Upper East Side dominates, but I'd like to think we have something for everyone. We have some of the edgier, younger, hipper designers.

What are some examples of those?

Laura: Yamamoto. Sometimes we get things from Issey Miyake, Rick Owens.

Tammy: I personally like Chloé, and that's not an older one, and we get a lot of Chloé here. Chloé, Balenciaga, Balmain.

Laura: Balmain has been around for 50 years. But they reinvented themselves. Pierre Balmain was couture, back in the day.

Tammy: And some of our Christian Louboutins are studded—more downtown. Even Chanel and some of the more high-end designers have downtown appeal now. So we have that, too.

Are there designers or categories that you don't carry now?

Laura: I think that you can't be all things to all people. So we don't do kids, and we don't do men's. We don't do vintage, except for the ones mentioned. We do stay with the focus on the Upper East Side, and I think we do it better than anyone else. If you spread yourself too thin, you lose yourself. If we had more space, we would definitely try going in a couple of different directions.

You're on the second floor here, and there's such a strong stable of customers who know that you're here—but do you think there's any harm in not being on the ground level?

Tammy: When my grandfather opened the store 60 years ago, consignment looked very different. He intentionally wanted a second floor space, and we are in that same space. My mother, when she took over, broke through the next floor and doubled the space. Now, consignment doesn't need to be on the second floor. So, yeah, I think that first-floor space could be wonderful, but when it was originally done 60 years ago, it was because consignment had a different meaning to people than it does today.

Would it ever be a consideration to look for a ground floor space, or just a bigger space?

Laura: To be continued.

Okay, time for the lightning round: 8am or 8pm?

Tammy: 8pm.

Laura: 8pm.

Beer or wine?

Tammy: Beer.

Laura: Wine.

Whiskey or tequila?

Tammy: Tequila.

Laura: Ew, neither! Can I say wine?

Cats or dogs?

Tammy: Dogs.

Laura: Completely.

Beach or mountains?

Both: Mountains.

Neighborhood lunch spot?

Tammy: Serafina.

Laura: Viande. Serafina is too noisy.

Happy hour spot?

Laura: My own house. Really! I'm not a barfly.

Tammy: I actually think I would be the same.

Rap or country?

Tammy: Rap.

Laura: Oh, rap—that kind of rap. Country.

Mad Men or Game of Thrones?

Laura: Game of Thrones! I'm a junkie.

Tammy: Mad Men.

Coffee or tea?

Tammy: Tea.

Laura: Both!

Sweet or savory?

Tammy: Sweet.

Laura: Savory.

Introvert or extrovert?

Laura: Extrovert.

Tammy: [Pauses] Introvert.

· Michael's Consignment [Official website]
· All Better Know a Store Owner Posts [Racked NY]
· Twelve of New York City's Best Consignment and Resale Stores [Racked NY]