Allegations of fraud, harassment and abuse are spilling out of My Sister’s Closet. Insiders say customers cheated, employees mistreated. Read Part 2 of our retail investigation:
And it's the owner's sisters who are making the most serious claims.
The sisters also said they assisted Ann in funneling consigned merchandise into a nonprofit thrift shop without first putting up those items for sale, which generated tens of thousands of dollars for Ann's favorite charities. They also lay bare the inner workings of the scarcely regulated consignment industry, which analysts describe as the Wild West of retail: a cash-in, cash-out business in which contracts give operators sway over value, pricing and payouts to those bringing in their merchandise for sale.brought in annual revenue of $30 millionAnn called her sisters"liars.
Except it didn't. Not until April, when the contract was revised after inquiries by The Arizona Republic. A new contract that appeared on the company's website last month replaced one from 2014.The fee previously only was hinted at in the one-page contract, which first told consigners they would get back 55% of the sale price in store credit or 45% in cash. Then ― in parentheses ―"less any markdown amount or promotional fee.
"We're not going to talk about that anymore," Ann's lawyer, Shaleen Brewer of Scottsdale, said."Ann can't talk about things that are involved in litigation."Jennifer said she helped Ann write the contract in a way so consigners would not easily see what they were being charged. A review shows the contract requires consigners to abandon legal ownership of items. Prices are set by the store and can be reduced at any time. Unsold items will be donated to charity.
"Donated clothes that we never had a chance to sell ― 500 or 700 items," Jennifer said."I threw it into donation bins and then her movers picked it up and took it to the thrift store.""I did what Ann told me to do. What I was ordered to do," she said. Kailee Cannady @lipglossgod says the store"lost or donated" expensive designer items and refused to give a refund. Filming herself in front of the Scottsdale store, Cannady recounts her experience in a 40-second clip.
gives My Sister's Closet an A+ rating, indicating the business had four complaints registered in the past three years, with none so far in 2023.in April showed the most recent posts came from dissatisfied customers, including consigners. Consigners are simply informed their items couldn't be sold and were donated and walk out with nothing, Jennifer and Tess said.
Although the contract makes clear there is no guarantee, Ann said the consigners are made whole if their items are lost. She said promo certificates are issued to their accounts for the value of the item. The certificates function like store credit. The United States has more than 25,000 resale stores, including thrift, pawn and consignment shops. Chaturvedi said each operates by its own rules, which for most means"cash and carry" terms.
The biggest enemy of resalers is slow-moving inventory. Chaturvedi said operators need to keep churning products or risk getting stale and running out of space. That's true at mom-and-pop stores and megaretailers such as Amazon, which offers"pallet sales" to unload excess product in bulk. My Sister's Closet is no exception. The concept was designed to reshape the public perception of consignment stores as glorified pawn shops. Ann offered customers an upscale secondhand shopping experience with brand-name merchandise.
"I signed the leases. I had to put my personal guarantee," Ann said, adding that at the time Jennifer was a student and had never held a job."There was absolutely no risk to . It's always been that way." Citing litigation, Ann declined to provide bookkeeping or shareholder records, including financial statements, board meeting minutes and ownership percentages.
Former employees who talked to The Republic gave similar accounts, calling working conditions hostile and often abusive. Multiple ex"Owner is the Devil incarnate; the ego is yuge and the narcissism leaks from her pores," another person identified as a former web manager wrote on employment site Glassdoor in 2022."I’ll never forget the one time she called my superior 'stupid' in front of me and looked at me with a smirk for validation.
Former employees said Ann pushed them to vote for certain candidates and issues. When Ann became active in a lawsuit fighting Proposition 208, which sought to raise teacher salaries by increasing taxes for anyone making more than $250,000, employees said Ann held a meeting urging them to vote against it.
Court records don't show any employee lawsuits against Ann or her company. And some employees have posted enthusiastic reviews about My Sister's Closet.
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