From the July 2011 issue of Entrepreneur
Teamwork: Cindy Kehagiaras (far left), Carol Polsky-Mintz and Carrie Rosenblum.
Photo © Jeff Clark

While she was pregnant with her second child in 2008, Carrie Rosenblum, a regional marketing manager for Wild Oats Market in Manhattan Beach, Calif., stumbled on a resale store she'd never noticed before: Children's Orchard, a franchise specializing in "gently used" kids' clothing, toys, strollers and other essentials.

Rosenblum was excited by the concept, because her own kids were growing so fast that outfitting them was proving expensive. Her twin sister, Cindy Kehagiaras, a fashion merchandiser and buyer, also began shopping at the store, but other moms they knew weren't quite as enthusiastic.

"There was hardly any merchandise, and hardly anybody to answer questions. It was a bad environment," Kehagiaras says, though as a fashion fanatic, she still found enough pint-size gems to keep her coming back.

The sisters were smitten with the children's resale concept, so when the franchise went up for sale a year and half later, they put their money on the table. They say the timing felt like fate: Both were open to new opportunities since losing their jobs in the recession. At the same time, their mother, Carol Polsky-Mintz, decided to retire and put her 401(k) cash into the store.

Since they opened in March 2010, the threesome has seen their store's sales increase 91.9 percent over the previous year. We talked to the mother-daughter-sister act about their growing Children's Orchard franchise, which is now one of the chain's top five locations.

What main changes have you made?
Polsky-Mintz: I used my retirement money to buy this store, so I was very careful doing cost analysis and looking at line items. We realized if we bought more merchandise, we would increase customer count, and would eventually break even.

Rosenblum: We repainted and put out more racks. We started collecting Halloween costumes, Christmas dresses and Easter dresses for seasonal sales. And we started buying used goods from customers six days a week, giving cash or store credit on the spot. The previous owner only bought two days a week by appointment. Opening up buying like that means we're getting more merchandise and the store looks full and lush. People don't walk out with nothing anymore.

What kinds of items do you get?
Kehagiaras: Ergobaby baby carriers are popular. We've gotten Ralph Lauren that's never been worn. People get so many things at baby showers and at Christmas that we get stuff in boxes and with the tags still on them!

What's the biggest problem you face?
Polsky-Mintz: The more customers we have, the more we fall behind in inventory. It's hard; you can literally climb up a mountain of merchandise in the storeroom.

Kehagiaras: An old friend who ran a store for 40 years told us the key to success is knowing your inventory. I told him, "You don't understand, we buy every day! Doing our inventory could be a business in itself."

Is it difficult working so closely with family?
Rosenblum: It is difficult, and we have to have an extremely high level of communication. We have a detailed weekly meeting about taking care of our kids, our buying policies, scheduling and employees. We go through all the things we have to talk about instead of making 50 telephone calls a day. It has really made a difference.

Any other secrets to your success?
Rosenblum: We have amazing employees. New moms don't know how a lot of this equipment works, and our employees know these products A to Z. They've been invaluable.

Polsky-Mintz: We are our target market. We know what shoppers want.