Retail Science and Systemization with Amy DeFauw, Katsch Boutique

So many of the successful retailers I know come with a both retail art side of the brain and retail science side of the brain. Now, the retail art side is most common to come by, right? It's the love of the product and the customers and the marketing and all the reasons we get into this business for the most part. But the retail science can be a little bit trickier to come by and that's inventory management and the numbers and financing and the things and the metrics that really make our businesses grow. Today I'm really excited because we're going to talk a little bit about both sides of this brain, but also what does it really take to make the retail science side of your business come to life and let those numbers and inventory management spreadsheets really speak to you. Today I'm talking to my friend Amy, the founder of Catch Boutique. Amy is a longtime member of the Hub, a part of our Mastermind program. She's a multi store owner in multi states and comes with a wealth of experience. She is as positive and genuine and smart smart as they come. So today this is a really insightful conversation about really the behind the scenes metrics of what it takes for her to grow her business and to successfully grow multiple locations, but also what it takes to grow a team to manage multiple locations. Amy has done a really great job herself as well of cutting out some of that overwhelm by really systematizing her business. So I know you're gonna love this one. She's a wife, a mom, a business owner, so super successful and just a great person to be around. Meet my friend Amy, the founder of Katch. Let's talk about your business strategy and the juicy details of what actually works from mainstream fashion to fashion on Main street and the entire ecosystem behind it. How do we scale your company and do it with the balance and the happiness that we all seek? Let's hear from those insiders, experts and strategists that actually make it happen. I'm your host, Ashley Alderson from the Boutique Hub and I can't wait to chat.

Hey guys. Welcome back to the podcast this week. I am excited about this conversation because it's a timely one and you're gonna see why in just a minute. There's lots we gotta cover, but Amy, welcome to the podcast this week.

Thank you for having me. I'm excited to be here.

I have always admired you as a business owner and admired what you built and have been so fortunate in the last year just to get to see it on a whole new level. So I'm really excited for you to tell everyone your story and the ups and the downs along the way, but also these major lessons that you've learned. So take me back to the beginning. How did you decide to become a boutique owner? Where'd this come from?

I feel like I've always had it in my blood. I love retail, but it was really an accident, I think that I became a boutique owner. I was in the corporate retail world for about seven years. So I majored in retail and consumer science at the University of Wisconsin and then went into the corporate world. And in that field I really fell in love with retail and I kind of thought that that was my path. I loved working for a corporate retailer with like the benefits and the fun stuff, stuff and the big teams. I saw a lot of success in that career path, but ultimately family brought me home. My husband and I are from the same hometown and we realized that we want to be around our families to, to grow our family. So we didn't have any kids at the time and we thought now, it's now or never. And I assumed that I would go work for another local retailer or a vendor. One of the connections that I made in my corporate experience and that just didn't pan out for me. A lot of people just wanted, they looked at me as a 28 year old female and were like, yeah, we'll put you in with the new college grads and you can, you know, make nothing. And I was like, you are nuts. I, you know, I, I knew my worth and I wasn't going to settle. And so I thought, I've always dreamed of opening boutique. Like why not just do it now? And so I took the leap and in October 2015 I opened cash Boutique. And it was a mix of home decor and apparel and I didn't know what I was doing. I had all this corporate experience. I had managed, you know, 500 million dollar open to buys. But when it came time to working with these boutique level brands, I was as clueless as anyone else. I think fashion Go wasn't really a big thing then and it wasn't until a few years into the, the boutique that I even learned about Fashion Go. I, I mean I went to StyleMax in Chicago and found a couple vendors and um, yeah, it was definitely an eye opening experience, but it was, it was fun to get started and yeah, like, I mean I was even doing, I was doing so much by hand to save pennies. It was just, it's wild to see like where you started to where you come and it's, it's a fun journey.

Jump in on just like this open to buy management, right? Because when you come from, you at least started knowing what that was and knowing you had to have inventory management. But then to translate that into this world like that, that is an undertaking. But there's a lot of retailers who I feel like get started, boutique owners that get started that don't even know what an open to buy is. So two things. Back this up for somebody who has no idea what open to buy means. Tell us about that and then I would love to hear you talk about how do you translate that knowledge of that massive of an open to buy into your store? Where did you start to break it down and build it out for your brand?

Yeah, I think open to buy is a really scary term. And when I first started at corporate, like, I was like, I'm going to be out of here before I have to open. Manage to buy. Manage or open to buys. I don't want to do that. But then as you start to learn the terms that you need, like it's not that scary. And I think we all have it within us. We just have to have the confidence as business owners to know that we can do it. And it comes down to just a few really simple retail math components that you're already looking at. You know, you're doing sales forecasting and it can be as high level as quarterly or monthly, all the way down to daily. But your sales and then your projected receipts and what you can truly afford and what you need from an inventory perspective to be able to do the sales that you want to do, to pay yourself, to pay your rent, to pay your utilities, all of those things, things that come with owning a business. And then you know, you can get into average inventory and turn those are a little bit more like advanced open to buy concepts, but important for the health of your business. When you have a healthy turn, you're not sitting on inventory that's four years old, you're moving through it and you're getting your markdowns at the accurate times so that you can make your money work for you because your inventory is your money. And so you don't want to just sit on a lot of T shirts when you could be investing that money into your business, into a new store, into, you know, a rental property for your family. So I think it's as we're all so smart as business owners, like you wouldn't be here if you didn't have a high level of intelligence. I think so. I know it's within everybody that they can do it and I really love to champion that for people.

I totally agree with that. And I see so many people just saying I'm intimidated by those numbers. Like it is impactful. It's you know, the right and left side of our brain. Right there's retail art which I think so many people get in this business because they love. But it's really the retail science that you're so great at. But that's really what makes successful businesses is being able to understand those numbers. So talk me through your week. When you sit down, what reports are most important for you to run? And especially again thinking of those who are just started or just starting with an open to buy and they're analyzing turn and some of these things. What is like your must do when it comes to your date with your numbers each week?

Yeah, so every day I look at the sales report. So we have three storefronts and an online. So every day is an important day. I know some retail, some retailers that are like online only, they do big launches once a week and so you can kind of scale it to what you need. But every day I look at my sales and I do a daily sales report by store. And so I look at how are sales doing each day but also each week because each day could really, I mean if it's a snowstorm, right, your sales are going to be affected. But how it rolls to your week and your month is really important. So every day I look at our sales and then every week I pull a bestseller report. So I'll look at how my total week sales ended up and then I look at bestseller. So that's total company. And then each store and we look at what stores sold the most of certain styles. And if I have a style that does really well at one store or a brand, we'll move inventory between the stores to sell out quickly and that's a way to increase your turn number. So if Liverpool is doing really well in one location and it's slow in another, I'll start sending more inventory to that location that's performing each month I look at a subclass and a vendor report to see if my sales and my inventory are in line. And for example, like sweaters, usually one of our biggest categories of business, it can go up to 28% of our business in, in some months can just be in the category of sweaters. So I have to make sure that my inventory penetration is in line with that. And penetration is just a Fancy word for like percent to total. So if 20% of your sales are in and sweaters, then 20% of your inventory and your receipts should be in sweaters. So those are kind of the big ones that I look at each week and each month.

How about talking through aging reports? Because I think that's one that's often underutilized. Okay, how did I sell through again? What was. What was turn and sell through. But when is it time to take my markdowns? Most importantly, how do I get cash out of my inventory quickly? What's your process with your aging each week?

So I. When it comes to aging, I really like to walk by floor because I can pull a report that shows me, you know, dated inventory numbers or if I'm getting low in something. But because I'm a Midwestern boutique and our customer is so seasonal, I can just get such a gut instinct when I walk the floor. You know, I still have some Barbie pink blazers on my floor right now, and I know I either need to mark them down or I need to carry them over to next spring because my Midwest girls, they're over Barbie pink and they want their rust and olive and mustard. So for me, I think. And that's where the art comes in, too. It's like, what's your gut instinct when it comes to your customers and what are they responding to? It's a balance between the numbers and then the trends and ultimately, like, what your customer is telling you.

So good. So true. There's so much in that mix of both. You have to have both and surround yourself. If you feel like you don't have both, at least the ability to surround yourself with people you. Right, yeah. If anything Amy just said is overwhelming to anyone who's listening. Like, there's people who can help you with that. There's people who can do some of this for you, but you at least have to have your toe in the water enough to not be completely overwhelmed by it.

Yes. And I'd say play around with those reports and save them, because what is so top of mind right now when you're selling a million of that flannel or, gosh, this T shirt is so good, I can't keep it in stock. It's so far away a year from now. And you're not going to remember if you sold four packs or six packs or what the markup was on that item. And some point of sale systems don't save that information. Like, after three months, it's gone. So if you have a exported file and it's saved into your computer, you can always go back and have. It's, it's like a reassurance to say, like, yeah, I, I can sell six packs of this item and that's how you scale. But it's by looking at those numbers and not just making emotional buys.

It's.

It's a balance between the two.

Yeah, for sure. Talk to me about what you just mentioned. Because you started with one store, you grew to three stores. And this topic of scale is always a hot topic for everybody. And, and those who want to scale with cash and reinvestment and those who want to scale with taking out a loan or, you know, some sort of external cash. What do you think the best route and what's, what's the path you took just to scale from one store to three stores? How did you get numbers to analyze when it was time to grow?

I think for me, like, the true factor of like, whether or not we should scale was my gut. And to say, like, is this a whole body? Yes. Like, does this next move fuel me to make this business still, like, really exciting? I am a growth oriented person and so if I'm just staying in my safe little bubble, like I get so bored, I'll add projects and projects and projects and I drive my team crazy. But when it came to the stores, it was like, okay, we have this figured out. Were doing really well with the second store. The opportunity just fell into my lap. I had no plans of opening a second location. I was happy with the first one, but the opportunity was just too good to pass up. I we're in a really small town originally, and the second location was in a bigger city about 30 minutes away. Attached it was a new building and it was going to be attached to a hair salon that does very, very well. So it was a consistent stream of customers. So it felt like the right move from that perspective. Like the right location, I think is so important for that location. I did have to take out a loan. I used a small loan and then a line of credit. And the first few years of business, I used a line of credit with my bank. So that way I didn't have to pay interest on a big chunk of money that I didn't need. And that was really just to fuel my inventory amount because inventory changes throughout the year. I don't need as much inventory in January and February as I do in August, September, October, November. So I could take out $5,000 instead of $20,000 and I only pay interest on the 5,000. So a line of credit was really a great tool for me in the beginning to keep my interest payments and my interest expense low. The second location, I had to do a full build out, so it was a big investment for me. But I looked at it as something that I would be in for the next five to 10 years. So it felt worth it to me. And then I always made sure I paid as much off as I could on that loan. With our second location, it started out really, really well. We were rocking and rolling and then covet hit and I was like, what the hell did I do? I think a lot of people have had that story with COVID But blessing, you know, long run, it was such a blessing that I have that location because it turned around and Iowa was really favorable for businesses during COVID That's where our second location is. So it's a little funny. My first location's in Illinois. I'm very close to the Iowa border. So the second location is in Iowa. And then for the third location, you know, I was very fortunate with that space. It was completely built out. It was a former Lululemon. And so they had the dressing rooms done, they had the back stock room done. They had fixtures there for me to use. So it was a lower cost of entry. And it felt like the right place to be for my brand because we are next to some major retailers. I mean, I've always loved Anthropologie. Like, it's been my favorite store since I was 16 years old. And now I have a store next to Anthropologie and that just feels so cool to me. It's like a personal little heart win.

I love that. And I can see similarities. I can see the hints of anthropology in your brand too, which is so cool. How did you. I feel like there's a common stumbling block when you go from one sort of two and from two to three, and that's scaling your time. Like, you almost feel like you're split in three different directions. And sometimes that can be really hard to focus. You're torn. Right? How did you set yourself up for success? Three different locations. Like, was it SOPs? Was it how you managed your time? Was it having really good managers in place? Or how did you do it in a way that allows you to keep your sanity amongst all three locations? Yeah.

I have an amazing team, like the best team. And I have since the beginning, I have structured it like a corporation. And so everything I am not the bottleneck of my business, I have delegated. And it's always changing the task that I'm delegating. But I have really great strengths and like finances and buying and high level like strategic marketing things. I hate posting on Instagram, I hate entering inventory. I do not want to do anything with hr and so I've delegated key tasks just overall for like the total business. But then when it comes to each storefront, I have amazing managers. I used to go like when I just had the two locations, it was really easy for me to go over to the second location once a week, twice a week. I don't need to do that. My manager there has everything running so beautifully that when I go I'm in the way and she has a great relationship and that staff has a great relationship with that customer. So the customer knows me from like our social media and just as a key part of the brand. But they know that they can, they know love and trust Caitlin and the team there. And then at our third location we have another great set like a manager, assistant manager and team. It took us a little while to get there. It didn't all just happen overnight, but as time has progressed we've been able to build those. So I make it a point to go at least once a month to each location and we have someone on my team that goes once a week to give them inventory so and check on things, make sure they need supplies, that type of thing. But it's a lot of it's weekly touch bases. It's you know, constant messages through Slack email updates with like, hey guys, this is how we're rolling on sales. We want to focus on this this week or this is the marketing efforts that we're doing. It's, it's a ton of communication. But if I tried to do it all on my own, I would burnout. This would be a terrible career. I would not want to be here. My customers would not want to come in the door. And I think that's, you know, a common mistake is that we think we have to do everything. But you're a much better leader when you're happy so that means delegating.

That does. And I love that you mentioned just the over communication of Slack every other channel and I'm sure just ongoing training that you have with your team and that your managers have with their team and so on so that you can not be the bottleneck. I don't think I've heard a boutique owner tell me that they're not the bottleneck of their business for a long time. So that's like a feather in your cap that I'M really loving right now.

Happy birthday to I am not gonna sing the rest of that to you guys, but I am gonna celebrate because it is our very first birthday@hubventory.com our very own wholesale marketplace built by our industry for our industry@hubventory.com you guys, as we celebrate, I just want to say thank you. Thank you for your input and your feedback and for encouraging us to build the very first grassroots online wholesale marketplace that I know you guys are loving. A few highlights I cannot wait for you to check out that are new on Hubvent right now, including our Shopify sync for retailers. So if you buy a product on Hubventory, it can automatically create a draft product for you in Shopify at your desired markup with a product description and with vendor photos saving you tons of hours every single week. Plus, if you're a member of the boutique Hub and shopping on Hubventory, we have our very own insider program just for you for free. You can save 5, 10% or 4 free shipping on hundreds of brands on the platform right now. You don't have to be a member of the Hub to shop on Hubentory, but you can save when you are a member of the Hub. You guys, during our first anniversary specials, make sure you check out all of those special discounts offered by brands and the creative inventory planning boards we have just for you. It's everything from game day planning to holiday planning to all the way fast forward to Valentine's Day plan planning. We try to make it so easy for you to use our inventory planning boards on Hubventory to plan out your next collections and your next launches and then easily purchase those products at a time that works for you. You guys, this platform was a major labor of love with tons of input along the way. So thanks for making this very first year in business so special. It's time to go stock your store right now. Check out hubventory.com built just for you.

How do you so let me take this a step further. I know you have the training and you talked a little bit about it. How about the accountability piece of it? How are your team, no matter what level of position they're in, how are they like also held accountable to their position or given opportunities to grow with their position along the way? How do you measure their success?

So for all of my managers, we have yearly reviews and you know, performance metrics that they need to meet and they're eligible for pay increases, bonuses, that type of thing with my part time staff, I mean it's if they show interest that they want to make this something bigger. The joy of being a small business is you can get creative with positions and say, like, okay, well, we don't have an opening right now, but in three months, like, maybe we could make one or we could move around some responsibilities because this person's really overwhelmed with their task list. And so we've been very agile to make it work with, like, the right people because, you know, it's. It's hard to find really great people sometimes. And so when you have that great girl that, like, loves your brand, everybody gets along with, she really loves the store, like, you hang on to her and you make a position work for her. But, yeah, I think it's just like, it's always changing and you always have to reevaluate. Um, one of my employees that's been here, the one of, I guess she's been here four or five years, we've changed her job like three times. And it's like, okay, well, this is what we thought you were going to do. Turns out I want to do those tasks. I don't want to hand over all the buying and the marketing. Like, I like those tasks. So we're going to give you HR and operations and all these things. And she's like, that's great, because I actually really love hr. This is perfect.

Right?

Yeah. So, I mean, it's just being agile and, you know, our systems are always changing too. Our technology is always changing. And so, you know, you never know when it's going to make more work or opportunities.

So it's like the saying, just making sure you have the right people on the bus. You can arrange this anytime. Right people, right seats. But it's like a puzzle piece, right? Just getting those people there and then being able to move them around, I think is a huge opportunity. You mentioned something a minute ago that I think is really important, especially where our industry is right now. You and I were talking about this before we started the podcast. Like, we need to breathe the collective together because we're going through some stuff and you said something I thought was really profound, and it was that happy people sell more.

Right?

Happy people sell more, whether it's your team and them being happy in their positions. But I think it's also boutique owners, and I think because of COVID because of, like the spike that a lot of people also had post Covid and now this reckoning of where in the world are we going? There's a lot of unhappy people and burnt out people. Talk to me about Just even your own journey and the times that you've battled, battled with burnout and how you've been able to bring yourself back to a place where you are really happy in this role and you're excited to come to work every day. What's that look like for you?

Yeah, I mean, I say all of this speaking through experience because I was there, like at the end of last year, I was burnt out. I was really unhappy. I was frustrated just by the smallest things. And I kept saying to my close friends, like, this isn't how it's supposed to be. Something has to change, something has to give. Like, this isn't how it's supposed to be. I have all of the things that I wanted. Like, I have the family, I have the house, I have my business. Why am I so tired and frustrated and all of these things? And I was just. I realized, like, I was working myself into the ground. When I opened the third store, I felt like I needed to do it very frugally, but also myself, like it was a badge of honor if I did everything myself. And I'm talking about, like, building fixtures. I. My mom helped me a couple days and she looked at me like I was nuts because it's 3:30 in the afternoon, I haven't eaten anything. And I have a saw and I'm tight like a saw. And I'm sawing holes in my counter and I'm tiling my counter because I thought, well, I saw this on Pinterest. I know I can save $2,000 if I do it myself. So I'm going to do it because I know I can't. And it's just like, okay, yes, you can, right? Yes, you can, but at what cost? And is it your sanity? Because you have people at home that need you to be your best self and that they need you to be happy and your team needs you to be happy because they might be going through some things. So, I mean, as working moms, but especially working moms that own small businesses, we have the weight of the world on our shoulders. And it's hard. It is really, really, really hard. So I guess if there's anyone out here listening to that and you're like, that's me. I feel that you're not alone and you're not a bad person because you feel overwhelmed and maybe a little bitchy, like, hey, been there, it's okay. But I think what I found that really worked for me was taking a break. And pretty much for like the month of January, I kind of shut down and worked from home a lot. And, I mean, part of it was because I got sick. I got sick so much in Q4 last year because I was working myself into the ground. My body was like, you can't keep doing this. And so I slowed down. It took about a month of, like, time for myself that I really just chilled, and I watched a lot of Netflix, and I needed that, like, mental shutdown. I had the team going. Like, they were going. Business was not. We weren't doing our best numbers ever, by any means, but I felt like it was worth the sacrifice. I went to a retreat in Arizona. That was the, like, total shift that I needed from an energy perspective. And I came back with such a renewed sense of gratitude for the life I have, for the business that I've created, for the people around me, for the customers that I have. And I just realized, like, if I want to have positivity coming at me, I need to be a positive person. Like, energy is magnetic, and I have to put out into the world what I want personally. And so. So that was in March. And, you know, you come back and you're on this, like, big high from a retreat. And for me, it's been really important that I've maintained that. And of course, there's ups and downs and there's emotions and there's a bad week here and there. But I have, like, really changed my workload and my structure so that I have quiet time at home. I have days that I work from home that I can, you know, have just peace and quiet, that my kids aren't, like, yelling in my ear while I'm trying to, like, respond to an Instagram comment. So that's been really helpful. I think, from a leadership perspective, I've really set the tone with my team that, like, hey, guys, we are. This is a positive place. This is what I set out from. From the beginning. I wanted it to be a positive, happy place. And so that's what we have to put out there. And. And we've been able to, like, support each other in that. If somebody's stressed, we pick it up as a team. But it's meditation. It's not drinking alcohol anymore. It is, like, a multitude of things that I have just found works really well for me. And I think my husband's a lot happier this year, too. But, yeah, I can say I'm definitely the happiest I've ever been in my business. And it's. It's, like, been a big shift for me.

I love that. I love it. Because it just, it translates into everything that you do. If someone's listening today and they're like, you're like you're hitting me in the feels right now. What's the biggest piece of advice you could give to a boutique owner who's smack dab in the middle of burnout today? What's the first action they take?

I'd say slow down. Slow down and take a break. And just know that, like, you are the guide that you need for your business. There is not a YouTube video or a online course that's going to give you the answer that you're looking for. It's within you, but you have to slow down enough to be able to hear it and to hear your intuition. Because when you're running a million miles an hour, there is absolutely no way you're gonna get to that voice. And you've got to slow down to do that. And it might not happen in a day. I'll say it's not going to happen in a day. It might take a week or two weeks, but you have to make shifts and you are your boss. That is the beautiful thing about owning a business. It's like, you're the boss. And yeah, it's okay if your sales suffer a little bit. Like, figure out what you have to do bare minimum to get through to pay your bills. Right? We don't want to just go haywire here and have a bunch of debt and not be able to pay your bills. But, like, if your sales are down a little bit, it's okay. Like, you are. Your success is not defined by your sales as a percentage to last year. And this business is cyclical. Like, there are highs and there are lows. And really it's the va, it's the like median line that you want to make sure that you're getting back towards. So if 2021 was like a gangbusters year for you, look at it as a blessing that you had that business and you were able to scale in a way that. But just know that that's not like, the norm. And I think that we forget that sometime we think our best year ever is the norm and it's not. And I think that's the, like, perspective corporate retail has allowed me to have is that, you know, trends come and go business, you know, peaks, peaks and valleys, and it's okay. It doesn't define your worth and your, like, validity as a business owner.

Well said. Every enneagram freak out there really needed to hear that message. You are not defined by your sales Numbers, year over year. So good. Amy, this is all. I feel like time has already flown by. Like, I feel like we just started talking to each other five minutes ago. This is so helpful. I want to just end with this question, because you and I both know life is about far more than just this business that we've created. And what you're doing in your storefronts is amazing, but you've got such a big purpose, and you're a wife and a mom. When you see yourself 30 years down the road, when you're on that front porch with your family and your grandkids and you're looking back and reflecting on this journey that you've been on, and your grandkids are asking you all these questions about it. What's the thing that you really want them to remember the most about you and your journey and how you lived?

Oh, gosh. I mean, if I'm surrounded by family when I am, you know, 30 years from now, I. I feel like that's the most important thing. It's why I started this business, to be close to family. And, you know, that's first and foremost, like, my biggest why. But I want to be a leader in my community. I want to inspire other women that they are worthy and enough to go after their dreams and. And they're capable of doing it. And, you know, female entrepreneurs are going to be the people that change the world, and we just have to believe in ourselves enough to do it. So, yeah, I hope to inspire other women out there to, you know, be the best versions of themselves and reach out, like, if you're nervous about something, if you're just unsure, reach out to the other female business owner in town and ask for her to be your mentor or, you know, run something by them. Create those relationships. And that's what I love about the Boutique Hub are all the relationships that are out there that I've been able to create, and it's just. It's really, really special. And we're so lucky to have this community. So thank you.

Oh, thank you. We're so lucky to have you in this community, and this year has been awesome. Just getting to know you behind the scenes, too, as a part of our mastermind group. So, Amy, thanks so much for being here today. I wish you all the success in the world, and I can't wait to wait to see where you go next.

Oh, thanks, Ashley.

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