Winmark's Strategic Position in the Circular Economy and Its Long-Term Growth Potential

In an era where sustainability and affordability are reshaping consumer behavior, Winmark Corporation (WIN) has emerged as a standout player in the circular economy. By leveraging brand ambassador partnerships, expanding its franchise network, and aligning with the global shift toward resale, the company is not only reducing waste but also building a scalable business model with significant long-term growth potential.

Brand Ambassadors as Catalysts for Visibility and Community Engagement

Winmark's recent partnership with NHL star Matt Boldy exemplifies how strategic brand ambassadorships can amplify visibility while reinforcing the company's core mission. Boldy, a dual-sport athlete in hockey and golf, represents a perfect alignment with Winmark's “Resale for Everyone” ethos. His personal story—growing up in a blue-collar family and purchasing his first golf driver from a Play It Again Sports store—resonates with the company's commitment to making sports equipment accessible.

This partnership, announced in August 2023 and highlighted during the PGA TOUR Canada's CRMC Championship, did more than generate media buzz. It positioned Winmark as a brand that supports athletes at all levels, from grassroots to professional. By associating with Boldy, Winmark taps into a younger, environmentally conscious demographic while reinforcing its role in reducing the environmental footprint of sports gear.

The impact of such partnerships extends beyond marketing. Boldy's involvement with Winmark's “Part of Their Journey” campaign, launched in early 2025, underscores the company's ability to connect with individuals who embody perseverance and community. This narrative not only humanizes the brand but also strengthens its appeal to franchisees and consumers alike.

Market Expansion and Franchise-Driven Growth

Winmark's franchise model is a cornerstone of its growth strategy. As of July 2025, the company operates 1,371 franchises across five brands—Play It Again Sports, Once Upon A Child, Plato's Closet, Music Go Round, and Style Encore. With over 2,800 available territories, the company is well-positioned to capitalize on the $367 billion projected global secondhand market by 2029.

Q2 2025 financial results highlight the franchise model's resilience. The company reported net income of $10.6 million, a 1.6% increase year-over-year, and operating cash flow of $24.1 million, up 12.7%. These figures reflect the stability of a business model that generates recurring royalty income while minimizing capital expenditures.

Geographically, Winmark has focused on high-growth regions like the Midwest and Southeast, where demand for affordable, sustainable goods is strong. The company awarded 77 new franchises in Q2 2025, with 42% of these in the Midwest—a region where its brands already have a cultural foothold. This strategic emphasis on localized expansion ensures that Winmark remains relevant to communities while scaling efficiently.

Sustainability as a Competitive Advantage

Winmark's commitment to the circular economy is not just a marketing tactic—it's a structural advantage. The company's brands collectively keep over 185 million items out of landfills annually and have diverted 1.9 billion items since 2010. This environmental impact is a key differentiator in an industry where 66% of global consumers prioritize sustainability in their purchasing decisions (Source: McKinsey, 2023).

Recent collaborations with manufacturers like Impex, Inc. (fitness gear), Rawlings (baseball), and Elan (skiing) further solidify Winmark's role in reducing waste. These partnerships, which position Winmark as the “Official Resale Partner” for these brands, create a closed-loop system where used equipment is reintegrated into the market. This not only strengthens Winmark's relationships with suppliers but also ensures a steady flow of inventory for its franchisees.

Financial Resilience and Investment Potential

Winmark's financial metrics paint a picture of a company balancing growth with prudence. The company maintains a conservative dividend payout ratio of 34%, ensuring ample capital for reinvestment. With $28.8 million in cash reserves and $30 million in credit facilities, Winmark has the liquidity to fund expansion while managing its $29.95 million in debt.

For investors, the company's trailing P/E ratio of 13.5x—below the average for its peers—suggests undervaluation relative to its growth trajectory. Additionally, Winmark's focus on ESG (Environmental, Social, Governance) goals aligns with the increasing demand for sustainable investing.

Looking Ahead: A Bullish Outlook

Winmark's long-term potential is underpinned by three key factors:
1. Circular Economy Momentum: As consumer preferences shift toward sustainability, Winmark's resale model will become increasingly mainstream.
2. Franchise Scalability: The company's ability to award 77 new franchises in a single quarter demonstrates its capacity to scale without compromising quality.
3. Strategic Brand Partnerships: Collaborations with athletes like Matt Boldy and manufacturers like Impex create a flywheel effect, driving visibility, inventory, and community trust.

However, investors should remain mindful of risks, including geographic concentration in North America and reliance on non-recurring gains (e.g., a $2.2 million litigation settlement in Q1 2025). That said, these risks are manageable given Winmark's strong cash flow and conservative balance sheet.

Conclusion: A Win-Win for Investors and the Planet

Winmark Corporation is more than a resale company—it's a leader in the circular economy. By combining brand ambassadorships with a scalable franchise model, the company is creating a business that is both profitable and purpose-driven. For investors, this represents a compelling opportunity to align with a company that is not only riding the wave of sustainability but also shaping it.

As the secondhand market continues to grow, Winmark's strategic positioning—rooted in partnerships, expansion, and environmental stewardship—positions it as a top-tier investment in a sector poised for decades of expansion.