Winmark
| Company type | Public |
|---|---|
| Industry | Retail (franchise) |
| Founded | 1988 |
| Founder | Ron Olson, Jeffrey Dahlberg |
| Headquarters | Minneapolis, Minnesota , United States |
Key people | Brett Heffes (CEO), John Morgan (Executive Chairman) |
| Products | Franchise retail brands specializing in pre-owned merchandise: Music Go Round, Once Upon a Child, Plato's Closet, Play It Again Sports, Style Encore |
Winmark Corporation is a U.S.-based franchisor overseeing five retail brands that specialize in the trade of pre-owned merchandise. With its headquarters located in Minneapolis, Minnesota, the company was established in 1988 by Ron Olson and Jeffrey Dahlberg under the name Play It Again Sports Franchise Corporation, following their acquisition of the Play It Again Sports franchise rights. In 1993, the firm changed its name to Grow Biz International Inc. and went public that same year. John Morgan took over as CEO in 2000, and in 2001, he rebranded the company as Winmark. Morgan successfully revitalized the business by divesting underperforming franchises, shutting down non-profitable locations, and transitioning to a franchisee-owned store model.
Winmark's portfolio includes five franchise retail brands focused on secondhand goods: Music Go Round (musical instruments), Once Upon a Child (children’s apparel and toys), Plato's Closet (teen and young adult fashion), Play It Again Sports (sports gear), and Style Encore (women’s clothing). The company formerly owned franchises like Computer Renaissance (computer hardware) and Disc Go Round (CDs), which were eventually sold. Additionally, its subsidiary Wirth Business Credit offers leasing solutions tailored to small businesses.
According to market research firm IBISWorld, around 2013 Winmark held close to a 6% share of the used goods retail market, ranking second only to Goodwill Industries. By 2016, Winmark's franchise network of approximately 1,170 locations controlled a $1 billion segment of the $17 billion resale market.
History
In 1986, Ron Olson and Jeffrey Dahlberg founded Franchise Business Systems, a consulting firm. Olson had previously served as president at R.J. Brandon Galleries, while Dahlberg was CEO of Dahlberg Inc., his father Kenneth H. Dahlberg’s enterprise. Martha Morris, who started Play It Again Sports in 1983, became one of their early clients. After witnessing strong customer demand at her store, Olson and Dahlberg secured the Play It Again Sports franchise rights from Morris in 1988 and later purchased her stores in 1990, establishing Winmark’s initial division.
The company was incorporated as Play It Again Sports Franchise Corporation in 1988 before rebranding to Grow Biz International Inc. in 1993 and going public on NASDAQ under the ticker GBIZ later that year (now WINA). By 1995, several of its franchises had earned spots on Entrepreneur magazine’s "Franchise 500" list. The corporate identity shifted to Winmark Corporation in 2001.
John Morgan assumed the CEO position in March 2000 and steered Winmark away from financial difficulties by enforcing rigorous financial assessments for franchisees, closing loss-making outlets, and hiring new leadership including President Steve Briggs from Valspar. He also strengthened the board with members skilled in corporate finance. In June 2000, the company sold its headquarters building. After recording a $350,700 loss in 2000, Winmark returned to profitability with a $3.2 million net income in 2001. During this period, it divested from franchises such as Retool, Computer Renaissance, and Disc-Go-Round.
In 2011, Forbes ranked Winmark eleventh among "Top 20 Small Public Companies In America." By 2013, IBISWorld placed Winmark second in the used goods outlet sector with nearly a 6% market share. In 2016, the company’s franchise network exceeded 1,170 stores and accounted for $1 billion within the $17 billion resale industry.
In February 2016, Brett Heffes took over as CEO from John Morgan, who transitioned to executive chairman while remaining Winmark’s largest shareholder as reported in 2014.
Franchises
Winmark Corporation manages five franchise-based retail brands that specialize in pre-owned merchandise: Music Go Round (musical instruments), Once Upon a Child (children's apparel and toys), Plato's Closet (clothing for teens and young adults), Play It Again Sports (sports gear), and Style Encore (women's apparel). The company previously divested four other franchise operations: Computer Renaissance (computer hardware), Disc Go Round (compact discs), It's About Game (video and computer games), and ReTool (tools).
As of 2009, the franchise initiation fee amounted to $25,000 plus a five percent share of gross sales, with additional charges for marketing and operational support. Franchise agreements do not grant territorial exclusivity; however, competing outlets must be located at least five miles apart according to the contract terms.
While primarily dealing in used merchandise, Winmark's outlets also offer new products, benefiting from the company's bulk purchasing power to negotiate favorable pricing. The corporation provides franchisees with industry expertise and proprietary pricing software to ensure consistency in valuing pre-owned items.
Between 2006 and 2010, Winmark launched approximately 50 new stores annually. By 2013, the network exceeded 1,000 franchised locations—all franchised rather than company-operated—with total sales surpassing $900 million.
Music Go Round
Music Go Round operates by purchasing, selling, and trading used musical instruments and related products. Originally established as Hi-Tech Consignments in Minneapolis by Bill Shell in 1986, Winmark acquired the business in 1993 and rebranded it as Music Go Round. By 2009, around 30% of the instruments acquired were new. In 2011, the franchise comprised 35 locations across the United States. The initial investment required in 2010 was roughly $300,000, with typical annual revenues ranging from $650,000 to $725,000.
Once Upon a Child
Once Upon a Child focuses on buying and selling secondhand children's clothing and toys. Founded in 1985 in Perrysburg, Ohio by Dennis and Lynn Blum after noting resale patterns at Goodwill Industries, it evolved from weekend garage sales into a formal retail operation. Winmark purchased the chain in 1992. By 2009, about 10% of its inventory purchases were new items. In 2011, the brand operated 240 locations in the U.S. and 24 in Canada. Startup expenses in 2010 ranged between $200,000 and $250,000 with average yearly sales estimated between $650,000 and $725,000.
Plato's Closet
Plato's Closet specializes in buying and selling secondhand brand name apparel, footwear, and accessories aimed at teens and young adults aged 12 to 24. The brand was acquired by Winmark in 1998 from founders Dennis and Lynn Blum—the same entrepreneurs behind Once Upon a Child. Its name reflects a recycling philosophy inspired by Plato, aligning with the company's emphasis on reselling clothing.
By 2011, Plato's Closet operated over 280 franchises throughout the United States and Canada. Initial investment costs in 2010 ranged from $200,000 to $250,000 while average annual sales were approximately $825,000. The model involves purchasing used clothing at roughly 30–40% of their resale value and paying sellers immediately—setting it apart from consignment-based businesses.
In 2001, popular brands carried included Abercrombie & Fitch, Gap, Silver Jeans, Sean John, Express, and Dr. Martens; items typically retailed at discounts between 50% and 75%. CEO John Morgan observed that Plato's Closet outperformed other Winmark franchises during the Great Recession as consumers increasingly sought affordable yet quality secondhand apparel.
This franchise’s focus on fashionable youth clothing combined with rapid inventory turnover underpins its strong position within the resale market niche.
Play It Again Sports
Play It Again Sports stands as Winmark's most extensive franchise network, dealing in both pre-owned and new sports equipment, with roughly 70% of its stock being brand new. By 2011, the chain operated more than 330 outlets throughout the United States and Canada. The estimated initial investment for a franchise in 2010 was around $300,000, while average yearly revenues typically ranged between $650,000 and $725,000.
Style Encore
Style Encore concentrates on the resale of used apparel for both women and men. The brand was introduced in January 2013, with its inaugural location opening in Texas that August. Style Encore provides immediate cash compensation for used clothing, shoes, handbags, and jewelry items.
Computer Renaissance
Computer Renaissance specialized in trading new and used computer hardware such as computers, memory modules, monitors, printers, software titles, and books. Established in 1993, it also offered custom-built computer systems. In July 2000, Winmark divested the chain of 209 stores to Hollis Technologies LLC for $3 million. CEO John Morgan cited the decision was driven by the rapid depreciation typical of technology products compared to more durable categories like musical instruments and sporting goods.
Disc Go Round
Disc Go Round was dedicated to purchasing and selling both new and secondhand compact discs (CDs). In July 1994, Winmark invested $2.3 million to acquire CDX Audio—operating under the name CD Exchange in Green Bay, Wisconsin—which operated 42 stores at the time. Due to trademark issues, the chain was renamed Disc Go Round. These stores incorporated an electronic inventory system to facilitate customer searches along with listening stations for previewing CDs. By June 1998, Disc Go Round had expanded to 137 locations before being sold to CD Warehouse for $7.4 million.
It's About Games
It's About Games focused on secondhand PC games, video games, and board games. Originally founded as Video Game Exchange in Cleveland in 1990, it expanded to 83 locations by 1994 but filed for Chapter 11 bankruptcy in 1995 due to excessive expansion. Winmark purchased the company in 1997 for about $6.8 million and rebranded it It's About Games, with most stores located in Ohio, Pennsylvania, Kentucky, Georgia, and Maryland. Although initially profitable, the division suffered a $3.4 million loss in 1998 attributed to inventory management problems, software glitches, poor merchandise selection, and insufficient employee training. Controlling 60 of the 64 stores at that time, Winmark proceeded to sell or close all It's About Games outlets by 1999 to cut losses and concentrate on franchises owned by independent operators.
ReTool
ReTool was introduced by Winmark on November 10, 1999, in Chicago as a retailer specializing in used tools. Approximately 65% of its merchandise was sourced from individual sellers; the remainder came from factories with surplus inventory or businesses that were shutting down. CEO John Morgan remarked in 2000 that acquiring used tools posed challenges because many owners preferred keeping their equipment. Winmark exited the ReTool business around 2002.
Wirth Business Credit
Wirth Business Credit is a leasing firm owned by Winmark that provides small-business supply financing. Profits generated from Winmark’s franchisees—ranging between $9 million and $10 million—were reinvested into Wirth Business Credit as a vote of confidence in its long-term growth potential despite modest expansion rates. By 2008, Wirth had established a network of 27 franchises.
In 2004, Winmark launched Winmark Business Solutions to offer support services for both franchisees and Wirth customers. This platform provided resources related to business formation, sales strategies, financing options, insurance products, and technology solutions. The website featured a discussion forum and hosted approximately 6,000 pages tailored for small business owners.