Megan Tamte birthed the Hot Mama concept in 2004. Husband Michael joined the team in 2005. Together they are parenting a retail juggernaut.
Megan Tamte went from post-partum retail frustration to 30 stores in 11 states in less than a decade—one hot mom at a time.
June 1, 2012
It took one eye-opening and miserable shopping trip right after the birth of her first baby for Megan Tamte to create her blueprint for a new kind of store. With her 3-week-old daughter in tow, Tamte took her maiden voyage as a new mom out into the world. All she wanted was a few new pieces of clothing to dress her post-pregnancy body and start feeling good about her looks again.
But things didn’t go so well. Tamte struggled to push the stroller through the narrow aisles of the department store. There was too much merchandise to sift through; the baby got fussy and Tamte had to find the bathroom to feed her. She knew she had only a limited window before she needed to take her daughter home. Tamte grabbed a few items and headed to the dressing room, only to find that nothing much fit her transformed body. The pretty young saleswoman tried to help by bringing larger sizes and different shirts, but nothing worked.
“I had the idea that there needed to be a store that catered to the young mom with little kids. There really wasn’t a place to shop that understood my needs and could help me with a sense of style within the great big job of motherhood,” says Tamte. “I thought of the term ‘hot mama’ and believed in the deeper level of the idea—that a hot mama loves being a mom fiercely, but she takes time for herself and doesn’t forget who she is in the midst of motherhood.”
A Store Is Born
It took several years for Tamte to fully gestate the idea and give it life. But since she and her husband, Michael, birthed the first Hot Mama store in 2004, they have raised a flourishing bundle of joy. The company is about to open its 30th store this month, and has outlets in 11 states that brought in $22 million in revenue in 2011. Now Hot Mama is on a two-part mission: to grow to 100 stores by 2016 and generate $100 million in revenues.
Hot Mama consistently has focused on serving busy women with a curated palette of fashion-forward clothing. Their stores target women ages 25-55, arming them with high-touch stylists who help find apparel to suit the shopper’s body type and fashion sensibilities. The stores offer a casual-chic wardrobe suitable for work events or the playground.
“What we realized is that moms are usually in a hurry—they’re busy taking care of their kids. And moms, too, sometimes forget about themselves and forget to think about fashion and trends,” says Megan Tamte, who holds the title of CEO. “Our job is to help women look and feel hot.”
The Tamtes always intended to grow Hot Mama into a national chain. Ever since it opened its 10th store in 2007, Hot Mama has fueled each new store with profits from existing ones. The company is on track to hit $33 million for the 2012 fiscal year ending October 31, says Michael Tamte, chairman and CFO.
Hot Mama has averaged a companywide 60 percent increase in revenue year over year.) The one exception was 2009, at the height of the recession; that year, revenue grew in single digits.) At its current rate, Hot Mama should easily accomplish its goal, he says.
A Mom Is a Mom Is a Mom
One key to Hot Mama’s success is the universality of its concept, which has translated well from Minnesota to the 10 other states where it operates. It’s an indication to Megan Tamte that she struck a chord.
“What we find is that the lifestyle of a mom is the same wherever we go, whether it’s Chicago or Minnesota or Portland, Oregon,” she notes. “We fundamentally found that a lot of moms need help and want to shop, but they want to shop at a place where they can shop quickly and dare to try a trend.”
That focus on a specialized segment is one reason Hot Mama thrives despite a still-depressed women’s retail segment. Since the recession, moms have spent their shopping money on their kids and partners, though that is slowly changing, says Marshal Cohen, chief retail analyst at the NPD Group, a consumer market research firm.
Hot Mama is benefitting from a trend toward specialization. “The consumer has gotten to the point where they recognize ‘I need a store that caters to my specific needs and desires,’” says Cohen. “Hot Mama is saying, ‘Here is a niche market that needs attention and needs some coaxing to spend, and here’s the environment to do it. You are allowed to be hot and be a mom and still care about how you look.’”
That was entirely the point when Tamte created the Hot Mama business model. A teacher, she grew up in Chicago’s North Shore suburbs with an eye toward fashion, and became convinced there were plenty of other women who shared her post-baby shopping blues.
Michael Tamte, an accountant, challenged his wife to create a business plan. With his background, he fleshed out the financial picture for the Hot Mama concept. When the Tamtes moved from California back to Michael’s home state of Minnesota, they decided it was time to give it a go. And then, kismet: a retail space opened up at 50th and France, their ideal location. (Hot Mama favors first-ring suburbs and areas with plenty of young families.)
After raising a quarter-million dollars from family and friends, as well as taking out an SBA loan, the Tamtes opened the first Hot Mama in November 2004. They stocked it with premium denim and fashionable tops, and hoped for the best. Thanks to word-of-mouth and a great location, the store hit its sales numbers that first month. (They were admittedly conservative, says Michael Tamte, but still.) Hot Mama continued to make its projections for the first six months. Tamte quit his job as an accountant and joined the company full time.
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