Editor’s Note: This is part of our Good on the Ground series, profiling entrepreneurial women who are addressing social issues in innovative and inspiring ways.

Ann Siner wasn’t setting out to solve a pressing social problem when she co-founded My Sister’s Closet, a consignment shop for designer apparel, back in 1991. But today, she realizes she has done more than create a $25 million retail chain.

“We have kept millions of pounds of clothing and goods from going back to landfills,” she says.

Siner, a business school graduate who spent her early professional years working in marketing for PetSmart, came up with the idea for a “cute, clean and current” consignment store while on a business trip to San Antonio. “I had time to kill,” she recalls, and stopped into a secondhand store. “I came out with a pile of clothes.” At that time, she was itching to start her own business, as she disliked reporting to anyone else. “I have too big of a mouth and don’t know when to keep it shut, quite frankly,” she says.

Siner called her younger sister Jenny, who had just graduated from college, and the two put their heads together. Most resale shops were dark, dingy and dirty — why couldn’t they look like new boutiques? Maxing out credit cards and using Ann’s PetSmart bonus, they opened My Sister’s Closet in a Phoenix shopping center. Their rule: All consigned clothes must be pressed, on hangers and look like new.

“We did everything ourselves,” says Siner, who estimated they spent less than $20,000 to get the retail shop up and running. “We were working around the clock like crazy people.” While neither had retail experience, Jenny’s artistic abilities — the younger sister designed the floor plan and window displays — complemented Ann’s business skills.

A Killer Consignment Concept

Siner says she borrowed a technique from the corporate world called the “category-killer concept” to launch My Sister’s Closet. Big-box stores like PetSmart and Best Buy are “based on convenience — everything under one roof, open 7 days a week [and] in really nice areas of town with great parking,” she says. Plus, “price is great. Everything is enticing. We took that same idea.”

When the sisters researched their competition, they found that most consignment shops closed early on weekends, and required consignors to schedule times to drop off apparel. “We took advantage of what we learned,” Siner says. Not only did they decide to stay open all week long, but “you don’t need an appointment to bring us your clothing,” she says. “As soon as your items sell, you can get your money.” And they made sure to be in an attractive shopping center with a mix of local and national retailers.

The concept took off. Within a few years, the sisters opened a second store in Scottsdale. They now have 15 locations in Arizona and California, including some that focus on men’s apparel and home furnishings. They employ 240 workers  — including middle sister Tess Loo, who joined the company in 2010. The company has invested heavily in customized technology to manage and track inventory (some of the bigger locations put out 1,000 new items a day). Last year, after 25 years in business, My Sister’s Closet posted $25 million in annual sales.

Of course, not everything has worked. The sisters experimented in the mid-90s with a consignment shop called You’re Invited, selling used wedding gowns. “We thought we were the smartest people in the world,” Siner says. “We weren’t. We were a failure.” They learned the hard way that women often hang onto their gowns — and the average bride doesn’t like wearing a used wedding dress on her special day. They ultimately closed the store.

Capitalizing on New Environmental Consciousness

One thing that has fueled My Sister’s Closet’s success, however, is changing consumer views about “recycled” clothing. “When we first started there was a big stigma,” Siner says. In the early days, if she or Jenny recognized a customer on the street, “the person would literally put their head down and look like they didn’t know us,” she says.

Reuse and Recycle

Listen to our podcast episode for more of our interview with Lynn Julian & Ann Siner.

Fast-forward to today. “It’s a whole new world in terms of bragging rights for what you saved, for what you recycled,” Siner says. After the economy soured in 2008, My Sister’s Closet had double-digit growth for four consecutive years. (Competitors also sprung up, including The RealReal, which is venture-funded.) And from an environmental standpoint, there is a greater desire on the part of consumers to go “green” by re-buying or re-selling items, rather than trashing them, Siner says.

The company’s environmental impact is something that Siner is especially proud of — even though she hadn’t anticipated that when starting out.

Today, “we take the recycling stuff even farther,” she says. In 2014, the company opened a 3,000-square-foot nonprofit thrift store in Chandler, Ariz., called My Sisters’ Charities. Items that don’t sell in the main locations are sent to My Sisters’ Charities, where consumers can buy them at much lower prices (such as $2 shirts and $5 shoes). Anything that doesn’t sell at the thrift store is then “sold by the pound to recyclers,” she says. “It’s the recycling process that never ends.” Last year, the thrift store netted $220,000 for charitable causes, including wildlife protection and animal rights.

To reduce single-use waste, the company also prohibits employees from using disposable water bottles, and is working to eliminate plastic bags in all of its locations. And Siner practices what she preaches: She has decorated her house and stocked her wardrobe almost entirely with used furniture and clothing from My Sister’s Closet. “It’s hard to pass up a good deal,” she says.

Read Full Transcript

Ann Siner – My Sister’s Closet – Phoenix, AZ – Lock Cut 3/28/17….

Ann The idea just came to me when I was on a business trip. I had time to kill. I had never been secondhand shopping. I was in San Antonio, and there was a nice store. I went in and it was all second hand. I came out with a pile of clothes.

SOT That’s really pretty. Did you try it on? Let me see how it looks.

Ann And when I got back to Phoenix, my younger sister Jenny had just graduated from college. I said, “Jenny, we need to see what’s here and think about opening our own consignment store.”

TEXT Ann Siner – CEO + Co-Founder, My Sister’s Closet – Phoenix, Arizona, USA

Ann My Sister’s Closet is a consignment store where people will clean out their closets in their homes. We will resell it. They make money. We make money. At the same time, we’re recycling and we find the items a new home.

TEXT Ann grew up in Texas and Colorado, the oldest of three girls.

Ann My sister Tess is just a year younger and our sister Jenny, is a Co-Founder of My Sister’s Closet with me, is about eight years younger.

TEXT Ann majored in political science at Colorado College.
TEXT In 1985 she completed her MBA at the Thunderbird School of Global Management in Phoenix.

Ann I ended up getting a marketing job with a big billion-dollar company called PetSmart. I love dogs. I love cats. I actually love all animals. PetSmart was a groundbreaker in saying they’re not gonna sell puppies and kittens like other pet stores, that they are gonna work with local rescue groups in all of their stores. I was very fortunate I got in on the ground floor and learned a lot about business from PetSmart.

TEXT In 1991 Ann took her life-changing trip to San Antonio.
TEXT She and Jenny decided to start My Sister’s Closet.

Ann One thing I learned from PetSmart is the category “the killer concept.” They’re based on convenience, everything under one roof, open seven days a week, we took that same idea. We’re open seven days a week. You don’t need an appointment to bring us your clothing. We have people there that will quickly go through your items, let you know what we can sell, what we don’t think we can sell. We open an account for you. Everything is itemized on your account. As soon as it sells, it posts to your account and you can literally come in ten minutes after it sells and collect your money in terms of store credit or cash.

TEXT Ann and Jenny used savings and credit cards to fund their startup.
TEXT In less than 6 months, they were turning a profit.
TEXT They began to see endless possibilities...

Ann We opened our store in 1991 and a couple of years later we had this epiphany that, “What do you wear one time and you’re never gonna wear it again?” A bridal gown. And so we said, “We need to open a store that is just bridal and formalwear.” We called it You’re Invited. We thought we were the smartest people in the world. We weren’t. We were a failure. First of all, people hang on to their wedding gowns. There’s a little bit of a stigma about buying a used wedding gown or a used formal, and so we learned the hard way, “This store isn’t gonna work,” and we closed it.

TEXT The original My Sister’s Closet store was making enough to cover the losses.
TEXT Then business grew steadily.
TEXT Ann and Jenny added more branches.
TEXT They opened menswear and home-furnishing stores.

SOT The price points on favorites is almost greater than the price point on designers.

TEXT In 2010 Ann’s middle sister Tess joined the company.

Ann We opened in San Diego when we hit our 20th anniversary for My Sister’s Closet. And I always joked that it, it was more traumatic for me than turning 50. But I wanted a challenge. I wanted to know, “Does this concept work outside of Phoenix, Arizona?” So five years ago we opened in San Diego. Three years ago we opened two additional stores there and we’ve learned that Californians love discounts and good prices on designer items as much as anyone else.

SOT Have we been making very many people VIPs?
-I made one guy a VIP.

Ann The company sales last year were $25,000,000 and it was kind of nice because it was our 25th year and we were making $25,000,000. It’s all something used, you know, from a $10 T-shirt to a $100 couch. That’s a lot of units.

TEXT My Sister’s Closet donates over $1 million a year to charity, primarily animal protection groups.

Ann One funny saying I’ve learned along the way is that overnight success really takes about ten to 15 years. And it’s true but it, the success feels so good. The other really fun part is the treasure hunt. You never know on any given day what you’re gonna walk in and find.

SOT What are you sending now?
-I’m sending pictures of a Louis Vuitton wallet. I’m giving her a picture
of the inside as well as the price.
-Did you put it out already?
-Yeah, it’s over here, in this case here.

Ann I am my own best shopper. I would say 80% of my closet is from My Sister’s Closet. It’s hard to pass up a good deal.