The rapidly changing retail market is forcing Goodwill Industries of Greater New York and Northern New Jersey, whose signature thrift stores help support its social-services mission, to streamline operations.

"You have to really focus on where you can have the most value and impact," said CEO Katy Gaul-Stigge, who took the helm of the century-old nonprofit 15 months ago.

Goodwill will shutter five of its 42 retail stores by the end of the year, seek new store locations and develop user-friendly models to improve the shopping experience and make it easier to donate goods. It is also exiting nonmission central programs and scrutinizing administrative costs, an exercise that Gaul-Stigge said will result in a pay cut for her and other top executives.

Goodwill's thrift stores are key to its mission of helping those with barriers to employment enter and succeed in the workforce. The stores provide not only revenues, but also jobs and careers for Goodwill clients. As part of the strategic evaluation, Gaul-Stigge brought in outside consultants, who found that Goodwill stores lost $1.1 million in 2015 when including administrative costs.

Goodwill's fortunes have followed thrift industry trends. Thrift did well during and after the recession. Annual revenue of thrift retailers whose proceeds fund charitable activities grew 11.1% in 2012. Since then, however, growth has slowed to an annual average of 3.3%, according to a January report by market research company IBISWorld.

Revenue is expected to drop further, to just 1.4% between 2017 and 2022, as the economy continues to improve and thrifters shop at a growing array of competitors such as consignment shops and fast-fashion sellers, not to mention online rivals like eBay and even artisans on instagram, who don't have to pay rent or maintain inventory.

Rising rents, especially in gentrifying neighborhoods, and an increase in the number of for-profit thrift shops further threaten mission-driven thrift organizations, said IBISWorld Senior Analyst Madeline Hurley. To stay competitive, she said, thrifts must "know the market, price their items correctly and keep their stores attractive."

Goodwill will shut down stores in the Bronx, Harrison, N.J., and in Binghamton, Herkimer and Rotterdam in upstate New York. Gaul-Stigge said she's evaluating other stores, but the road for "these five [was] too steep."

At the same time, she is looking for new locations, and this summer will open a store in North Plainfield, N.J., that has, among other features, wide merchandise racks, drive-up donation windows and a configuration that allows employees to restock every 45 minutes.

"Where we're looking to grow are in places that have the right demographic mix of donors and shoppers," Gaul-Stigge said. "We need to create a fun, fresh, clean shopping experience and a convenient, friendly donation experience for donors."

As it gets leaner, Goodwill will exit 12 programs that deal with health and after-school activities for kids. It has also assembled a first-time advisory committee of retail executives and is sending employees to classes at the Fashion Institute of Technology to learn about merchandising and retailing.

"I see an opportunity for creating new retail jobs," Gaul-Stigge said. "We're looking to figure out how Goodwill can participate in those new jobs and create them for people with disabilities."