Oxfam has rejected claims that charity shops boom in a recession as it has been hit by cash-strapped consumers unwilling to donate their clothes.

While the revamp of its business model has helped increase the profitability of its stores by 10 per cent in the last 12 months, it claimed it is suffering from consumers becoming more frugal and hanging onto their clothes rather than donating them to charity.

Oxfam head of trading David McCullough said: "It’s one of the myths that in a recession it’s boom time for charity shops. In fact, discretionary spending on items such as Christmas cards, gits and add-on items is very tight, just like the rest of the high street."

Oxfam is on course to match its profits of£20 million last year at a time when many retailers are experiencing negative growth. But the charity said it is finding it hard to find enough quality stock as consumers tighten their purse strings and stop donating clothes.

McCullough said: "If people are not buying new things then it doesn’t create the moment when they clear out their wardrobe. Our supply chain dries up."

Part of Oxfam’s new business model included the opening of three high-end fashion boutiques in London’s West End, as well as a new partnership with Marks & Spencer under which the retailer offers a£5 voucher to anyone donating M&S clothes to Oxfam.

McCullough said: "The focus on stock acquisition has made the biggest difference in helping us do the numbers this year."

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