2017 Community Impact Report a REUSEFUL. impact

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1 2017 Community Impact Report a REUSEFUL impact

2 Shop Reuse. Reimagine. A MODEL FOR GOOD pg. 4 Resale on the Rise pg. 5 Our Model pg. 6 The Lifecycle of a Value Village Item pg. 7 Creating Social Good pg. 10 FUNDrive Events pg. 11 Our Social and Environmental Impact pg. 12 Extending the Life of Reusable Goods pg. 14 Our Reuse and Recycling Customers pg. 15 RETHINK REUSE A Challenge to Act pg. 18 Rethink Reuse pg. 19 I Give A Sh!rt pg. 20 State of Reuse Report pg. 21 Eco Fashion pg. 22 Industry Leadership pg WHAT MATTERS MOST pg. 24 LOOKING AHEAD pg. 30 Our Core Values pg. 25 Our People pg. 26 Creating Meaningful Impact pg. 29 Our Commitment pg. 31 TVI, Inc. d/b/a Value Village, Savers and Unique is a for-profit professional fundraiser. Shopping at our stores does not directly benefit any nonprofit organization. See valuevillage.com/donate for more information.

3 FOREWORD For over 60 years, the Value Village family of thrift stores Value Village, Savers Unique and Village des Valeurs MD has been a brand you can count on to deliver a wide selection of second-hand clothing, accessories and household items at an affordable price. But more than that, we want to change the way people think about reuse. Great strides have been taken to reuse and recycle paper, bottles and cans, but what about our other stuff? We fill our closets and homes with new clothing and household goods, not realizing the impact our footprint has on our environment. With over 300 stores and nearly 22,000 team members, Value Village is committed to helping communities and our planet thrive by giving consumers a reason and an avenue to shop smarter, and get rid of the things they no longer want or need the right way. Why? Because we want to ensure our landfills don t become laundry piles. An alarming 26 billion pounds of clothing and textiles end up in landfills each year, when 95 percent of these items could be recycled or reused. 1 That s where we come in. Value Village recognizes the importance of ensuring every item we touch realizes its full potential, whether purchased at one of our retail locations, or given a second chance at life though our partnerships with reuse and recycling partners at home and around the globe. Last year was no exception, with our stores diverting more than 700 million pounds of reusable clothing, textiles and other items from the waste stream. But we know there is more to be done. We also believe in the power of business to create meaningful benefits for society. Which is why we choose to purchase pre-owned goods from nonprofit organizations to supply our stores. Last year alone, we purchased more than $170 million of clothing and household items from these nonprofits, providing them with revenue to advance their missions, empower their causes and serve a wide range of local community needs. From helping young children and veterans, to providing services for people with disabilities and achieving breakthroughs in medical research, we re proud to partner with so many charitable organizations as a vital part of our supply chain. Beyond our business model, in 2017 we found new opportunities to help lead our industry through community partnerships, cross-sector collaborations and an ongoing commitment to rethinking reuse. Every day at Value Village, we strive to find additional ways to maximize our impact in our stores and communities, and for the benefit of the planet. As a purpose-driven retailer from our beginning, this is what drives us. Sincerely, The Value Village Leadership Team

4 A Model For Good pg. 5 RESALE ON THE RISE Resale is a rapidly expanding industry with more than 25,000 resale, consignment and not-for-profit thrift shops in the United States alone. 2 The used-merchandise industry is no. 12 on the top 50 fastest-growing industries list, 3 and Value Village has had six successful decades in this ever-changing thrift marketplace. A model for good 90 % of clothing and household items at Value Village sold for under $10 With more than 90 percent of clothing and household items at Value Village sold for under $10, we offer consumers quality one-of-a-kind items at prices within reach of their budgets. But for us, it s more than just offering our shoppers a great deal. As our company continues to grow within this booming industry, we want to impact the way people think about their shopping habits so fashion can truly become more sustainable. Consumers ages 18 to 24, for instance, are 77 percent more likely to buy from environmentally-conscious brands, 4 but eco fashion is often out of their price range. So, how can they make conscious shopping decisions without breaking the bank? Thrift shopping! 71 % of consumers plan to spend more on resale shopping in the next 5 years 5 36 % of consumers say thrifting has become more popular among their generation 6 51 % of consumers say they are more likely to change their behavior to be more environmentallyconscious to benefit the world at large 7 66 % of consumers use thrift to buy better brands they would otherwise never pay full price for 8

5 A Model For Good pg. 6 A Model For Good pg. 7 OUR MODEL At Value Village, we strive to approach consumption differently by emphasizing reuse. Instead of the traditional linear model of taking, making and disposing, we focus on a circular model of reusing, reducing and recycling. LIFECYCLE OF A VALUE VILLAGE ITEM Donate or discard? Here s how it works: People donate items to nonprofits Individuals donate unneeded or unwanted clothing and household items to nonprofit organizations partnered at the Community Donation Center located at our stores or directly to the nonprofit, rather than sending reusable goods to landfills. Nonprofits sell items to Value Village Those community-based nonprofits then sell the items to us, so we can fill our racks and stock our shelves with merchandise for resale in our stores. By purchasing these goods from our nonprofit suppliers, the same nonprofits our communities depend on, we provide steady revenue streams that help to support each of their missions. Items sorted and placed on the sales floor Once an item comes through our doors, they get sorted and only the best are priced at a great value and placed on our sales floors. Items sold for reuse Our circular model comes to life when clothing and household items are purchased by local shoppers and given a second chance. Rerouted items Items purchased for reuse 04 The Reuse Stream Items sorted & placed on the sales floor People donate items to nonprofits 02 Nonprofits sell items to Value Village Rerouted items Goods that don t end up being sold at one of our stores can be reused in other ways, as well. This may include offering clothing and household items to community organizations in the form of in-kind donations, or selling reusable goods to resale customers domestically and abroad. Items that cannot be utilized in their current state may be repurposed by our reuse partners or recycled for materials including some textiles that can be broken down for insulation. 45% is reused as second-hand clothing 30% is upcycled or down-cycled into reusable products 20% is turned into post-consumer textile fibers 5% ends up as waste

6 A Model For Good pg. 8 A Model For Good pg. 9 OUR NONPROFIT SUPPLIERS The suppliers we work with provide a wide range of impactful services to the communities they serve. Here are a few. In-Focus Spotlight In the fall of 2017, we launched our partnership with Veterans Emergency Transition Services (VETS) Canada to provide move-in kits as part of their community engagement programs. The kits, filled with move-in essentials, are intended to give veterans a chance to get back on their feet. What began as an initiative by a store manager has since expanded into a national Canadian program, offering basic home essential kits to veterans. The kits are comprised of gently-used, quality items, including bedding, silverware, dishes and kitchen appliances. Some of the causes addressed by our nonprofit partners include: Youth and mentoring for young children who are at-risk or living below the poverty line Services for people with disabilities including home care, inclusive education and employment Medical research that works to achieve breakthroughs in finding cures and better treatments for diseases Veteran programs that help these citizens adjust back into their lives as they return home from serving their country

7 A Model For Good pg. 10 A Model For Good pg. 11 CREATING SOCIAL GOOD Purchasing clothing and household goods from nonprofits to supply our stores allows communities to flourish. FUNDrive EVENTS FUNDrive events provide an easy fundraising opportunity for local schools, sports teams and other nonprofit organizations to host donation drives and collect goods from the communities they serve. As a result of the purchase and sale partnership with Value Village: Diabetes Canada raises funds to support world-leading diabetes research, send 2,400 kids, youth and families to D Camps, provide education, programs, services and advocacy for the 11 million Canadians living with diabetes or prediabetes Revenue earned through selling donations of clothing and household goods helps Big Brothers Big Sisters of Puget Sound serve over 3,500 youth, parents and mentors annually The Epilepsy Foundation of Greater Chicago is able to offer free programs and services for nearly 140,000 individuals and families living with epilepsy in the Chicagoland area The Kidney Foundation of Canada has been able to support more than 4 million Canadians living with chronic kidney disease, and invest over $3 million in kidney research annually $ Organizations that participate in FUNDrive events also act as our suppliers by collecting and delivering the goods to Value Village for payment. In 2017, more than 7,000 community-based nonprofits utilized our FUNDrive program totaling more than 3.5million in earned revenue for their efforts.

8 A Model For Good Value Village is a far-reaching company with meaningful impact in communities across the U.S., Canada and Australia. OUR SOCIAL AND ENVIRONMENTAL IMPACT In 2017, we diverted more than 700 million pounds of reusable clothing and household goods from local landfills and provided more than $170 million in revenue to nonprofits to help support their missions. Pounds diverted from the waste stream CANADA QC BC C BC NL AB A AB MB 2,000,000 S SK 58,900,000 43,000,000 6,400,000 ON 11,800,000 2,600,000 11,900,000 35,600, ,000,000 PE NB NB 13,700,000 NS NS N WA 41,900,000 OR MN 1,600,000 30,100,000 NY SD 2,200,000 4,200,000 4,400,000 CA ND WI 15,200,000 RI OH UT 24,400,000 17,700,000 7,900,000 25,400,000 PA 1,400,000 NV 8,500,000 MD 9,500,000 12,700,000 VA 6,500,000 MO KS 4,700,000 26,300,000 CT 4,100,000 IL 13,800,000 NH MA 8,800,000 KY 2,100,000 26,500,000 AZ NM AR TX 20,600,000 4,800,000 10,100,000 9,700,000 UNITED STATES (not to scale) AUSTRALIA 6,700,000 HI AK 6,600,000 SA A 6,000,000 VIC 14,000,000

9 A Model For Good pg. 14 A Model For Good pg. 15 EXTENDING THE LIFE OF REUSABLE GOODS Value Village is a dedicated industry leader in textile reuse and recycling, with hundreds of millions of items repurposed annually. OUR REUSE AND RECYCLING CUSTOMERS From to we see the potential in every item that comes through our doors. to Reuse has core been the of what we do, so we know there is demand all over the globe for reusable and recyclable goods. With the help of our shoppers, our reuse and recycling customers, more than 90% of the clothing and textile items we handle can be repurposed in some way million tops million dresse s 30million pairs of shoes Only 5 % of these items end up as true waste. 71 million pairs of pants 18 million coats 32 million accessory items

10 A Model For Good A Model For Good pg. 16 pg. 17 From the bag to the tag, this one-of-a-kind item is made from 100% repurposed material from our stores. In-Focus Spotlight Giving clothing a second chance through reuse is the most sustainable action we can take to prevent landfills from becoming laundry piles. Together we re saving precious resources, such as energy and water, by re-thinking the concept of waste and giving otherwise forgotten materials a new life. Beyond Retro began in 2002 as a single warehouse-turned-retail store in East London. Since then, the company has become the leading vintage retailer across the U.K. and Sweden. We choose to do business with organizations who are like-minded in our desire to extend the life of reusable goods beyond our sales floors. And we hold ourselves accountable by selling unsold items directly to well-established reuse and resale customers. Countries we sell reusable goods to: Providing our customers with a strict quality assurance guarantee coupled with regular visits to these marketplaces has established Value Village as a preferred partner for many leading clothing and book resellers, wholesalers and overseas resellers. Their international team of trained trend specialists handpick unsold clothing items and textiles to upcycle from companies such as Value Village into new, unique items. Beyond Retro consistently seeks out innovative avenues to make a lasting impact on the fashion landscape, while ensuring they do their part in keeping clothing out of the world s landfills.

11 Rethink Reuse: A Challenge to Act pg. 19 RETHINK Most of us have too much stuff, so what do we end up doing with it? REUSE it gets thrown out. of textile waste is created by the average person per year, sometimes more. 81lbs. With that in mind, Value Village knew that something needed to be done. a challenge to act That s why we started our Rethink Reuse initiative in 2016 to challenge consumers across North America to think about their clothing footprint and ultimately, what it means for our planet. The multi-year, multi-phased initiative is dedicated to shedding light on the environmental impacts of the clothing industry while informing people of the easy steps they can take to make a positive impact on their clothing footprint. Through research, collective conversations, educational public art installations, online conversations and eco fashion shows, we set out to show that through shopping smart, and reusing clothing and household goods, we can all take small strides to reduce the environmental impact on our planet. At Value Village, we are dedicated to raising public awareness of the issue of clothing waste while encouraging a shift in behavior toward extending the life of reusable goods. In 2017, we did just this.

12 Rethink Reuse: A Challenge to Act pg. 20 Rethink Reuse: A Challenge to Act pg. 21 I GIVE A SH!RT The most sustainable clothing in the world is the clothing that already exists. STATE OF REUSE REPORT Last year, we commissioned our second annual State of Reuse Report to examine perceptions around clothing consumption and reuse. 700 gallons It takes over of water just to make one new cotton T-shirt that s more water than you ll drink in 5 years. With consumers buying four times more garments than we did 30 years ago, the clothing industry has managed to become one of the biggest polluters in the world. Knowing these statistics, we created a movement called I Give A Sh!rt asking North Americans to each help save 700 gallons of water through a simple request: forgo one new T-shirt purchase and buy a used one instead. With two million participants, over one billion gallons of water was saved enough to fill more than 1,500 Olympic-sized swimming pools. For Earth Week in April 2017, we partnered with Recycling Council of Ontario (RCO) to bring high school students and teachers in Ontario an opportunity to organize a recycling drive for used clothing and textiles. The #IGiveaSh!rt Challenge provided a hands-on, educational opportunity for local students to learn about the environmental impacts of clothing consumption and textile waste, while providing them with an easy solution to address the problem. Looking ahead, we re excited to expand this program to other provinces in Canada. The report showed that people are unaware of the impact their clothing has on the environment with 75 percent agreeing, If I better understood my actions how hurt or helped the environment, I would be more likely to make environmentally conscious decisions. As we look to our 2018 report, Value Village will continue to shed light on these important issues, providing more clarity on misperceptions and suggesting ways we can all give a sh!rt about our clothing footprint. To review the report in full, visit rethinkreuse.com.

13 Rethink Reuse: A Challenge to Act pg. 22 Rethink Reuse: A Challenge to Act pg Value Village led the charge on Rethink Reuse through a variety of programs and activations that encouraged shoppers to think differently about reuse. Eco Fashion As a supporter of Vancouver, B.C.-based Eco Fashion Week, the world s largest sustainable fashion event, we unveiled the 81 Pound Challenge to reflect the amount of clothing and textiles the average North American throws away each year. Local designers created upcycled collections from eighty-one pounds of gently-used fabrics, clothing and accessories from our stores. Continuing to engage influential figures within the fashion industry, we became the first eco brand to headline Toronto Women s Fashion Week. INDUSTRY LEADERSHIP As a leader in the thrift industry, Value Village continues to find opportunities to provide new insights and develop partnerships that bring reuse to the forefront of retail conversations. We have been represented through memberships on the Canadian National Zero Waste Council s Circular Economy Working Group and the Secondary Materials and Recycled Textiles Association (SMART) board an international trade association focused on promoting high standards and best practices for reducing solid waste by recycling textiles and related secondary materials. In addition, Value Village once again took the stage at Fashion Takes Action s World Ethical Apparel Roundtable (WEAR) to share our dedication to reuse. We were also a proud sponsor of the Sustainable Brands conference and have a voice on the topic of sustainable clothing.

14 what matters most 01 ACT WITH ETHICS & INTEGRITY We always strive to do the right thing. Ethics and integrity consistently guide our actions and decisions. 03 INVEST IN TEAM MEMBERS SUCCESS We recognize the potential of our team members. We re committed to their well-being, growth and long-term success. 04 STRENGTHEN COMMUNITIES By purchasing their donated goods, we provide a source of sustainable revenue for our nonprofit partners, enabling them to serve more individuals and families in every community where we do business. 02 PUT CUSTOMERS FIRST We strive to exceed expectations and offer exceptional service, value and selection in a fun, easy-to-shop thrift environment. Our Core Values Through the power of reuse, we extend the life of the goods we purchase, help protect the environment and fuel small businesses around the globe. 05PROTECT THE PLANET INNOVATE TO GROW We learn every day, adapt and continually improve our business in both small and transformative ways.

15 What Matters Most pg. 26 What Matters Most pg. 27 Our people are at the center of who we are and everything we do. Our People Their dedication is in direct correlation with our success as a business and community partner. We have a culture that embraces our values and our core purpose improving lives through the power of reuse and a business model that attracts individuals who want to make a difference in the world. Whether working in our stores or at our store support centers, we provide a compelling employee value proposition, competitive benefits, including paid sick, vacation and holiday leave, total compensation, extensive training and development opportunities, and a team member discount to shop in our stores. We value every contribution by recognizing and cultivating the talents and interests of our team members. We make a commitment to each individual s well-being, and as a result, we ve seen long-term growth and success. The majority of our store managers emerge through the ranks of our teams, and nearly all of our district managers are internal promotions. 4,962 2, team members for 5+ years team members for 10+ years team members for 15+ years team members for 20+ years Our committed employees and how long they have been with Value Village

16 What Matters Most pg paid to our more than 100 nonprofit suppliers MILLION MILLION POUNDS of reusable or recyclable goods kept out of the waste stream in 2017 ~22,000 JOBS held by team members across the U.S., Canada and Australia In-Focus Spotlight Our nonprofit partners are also an important part of how we encourage and support our team members to do good and be great at what we do. Our employees often choose to participate in volunteer efforts to support the missions of the many organizations we work with. And our work with nonprofits such as Northwest Center, Developmental Disabilities Association, and Canadian Association for Community Living have encouraged the implementation of programs that ensure we hire individuals of all abilities. In recent years, Value Village has forged a partnership with RWA (Ready, Willing & Able), which connects employers, people with mental disabilities and autism spectrum disorders (ASD) and community agencies at the local, provincial and national level. RWA also promotes awareness among employers and the public on the benefits of hiring people with mental disabilities and ASD. Since partnering with RWA, we have hired more than 60 team members through the organization. 10,000 ITEMS Creating Meaningful Impact find a home by way of each of our stores every day 100+ across the world REUSE AND RECYCLING PARTNERS 17 YEARS average nonprofit supplier relationship

17 Our Commitment pg. 31 With over 60 years under our belt, we remain committed to meeting the increasing demand for sustainable products in an affordable, accessible and fashionable manner. When it comes down to it, it's up to purpose-driven retailers like Value Village to educate and inspire consumers to participate in reuse. We'll also continue to procure our merchandise in a way that supports local communities across the U.S., Canada and Australia. Over the past 10 years, Value Village has purchased more than looking ahead 1.4 billion $ 1.4 of clothing and household goods from our nonprofit partner suppliers, creating lasting impact on our industry, communities and planet. But it s just the start.

18 pg. 32 Footnotes 1 Secondary Materials and Recycled Textiles. Web. 2 Industry Statistics and Trends. The National Association of Resale Professionals. Web. pages/index.cfm?pageid= The U.S. Department of Labor, Top 50 Fastest-Growing Industries. Career One Stop. Web. org/toolkit/industry/fastest-growing-industries.aspx?page size=50&currentpage=1 4 The 2018 Annual Resale Report. ThredUp. Web. 5 The 2018 Annual Resale Report. ThredUp. Web. 6 The 2017 State of Reuse Report. Value Village. Web. 7 The 2017 State of Reuse Report. Value Village. Web. 8 The 2018 Annual Resale Report. ThredUp. Web. 9 The State of the Apparel Sector 2015 Special Report on Water. The SustainableBrands Group. Web. SA_2015_StateofApparelSector_SpecialReport_Water_ pdf TVI, Inc. d/b/a Value Village, Savers and Unique is a for-profit professional fundraiser. Shopping at our stores does not directly benefit any nonprofit organization. See valuevillage.com/donate for more information.

19 Thanks for letting us share our Community Impact Report with you. We d love to hear any feedback you might have on how we could continue to improve. Reach us at impact@valuevillage.com.

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