Company: Hot Mama
Year Founded: 2004
Annual Revenue: $40 million
What It Does: Forty-one-store retail chain that caters to busy moms—and welcomes kids—at its fashionable boutiques for apparel and accessories.
After opening 12 Hot Mama stores across the country this spring and summer, Megan Tamte discovered something comforting: that the maternal instinct for retail is the same all over.
“It was fun to see that. You fear that the mom in Portland, Oregon, will be different than the mom in Boston,” says Tamte, who is Hot Mama’s founder and CEO. “But what we’re finding is that the mom is the same anywhere. She has the same needs wherever she is.”
Since she developed her first Hot Mama store in Edina in 2004, Tamte has built out a retail chain that stays true to her vision. Tamte’s idea was born after her first—and not especially successful—outing to go shopping with her infant daughter. She grew increasingly defeated as she tried to navigate the narrow department store aisles with her stroller, find clothes that fit her new post-pregnancy body, and get help from a saleswoman.
Tamte thought that there had to be a more mom-friendly and fashion-forward place for new parents like her to shop. When she couldn’t find it, she decided to create one herself. A former teacher and stay-at-home mom who had little retail experience, Tamte spent seven years fine-tuning her concept.
She created an on-trend boutique that caters to women 25 to 55, with a strong focus on helping them look and feel beautiful. Hot Mama is designed to be a place where women can feel embraced, empowered, and completely comfortable bringing their kids. The stores have wide aisles, as well as a central “living room” where little ones can nosh on the store’s animal crackers, stay busy with toys, or enjoy a movie under the watchful eye of a stylist while Mom tries on clothes.
And they aren’t just any clothes. Hot Mama prides itself on helping women look stylish, with premium jeans, high-end tops, and fun jewelry. The format continues to strike a chord with customers, who fueled same-store sales increases of 20 percent in 2011 and 2012.
That steady growth in revenue has powered Hot Mama’s expansion to 41 stores in 15 states. Profit from existing stores gets poured into building 33 percent more new boutiques each year. At that rate, Hot Mama looks like it will make good on its goal to hit 100 stores by 2016 and exceed $100 million in revenue. By 2020, Hot Mama aims to operate 500 stores with annual sales of $1 billion.
While the company continues to break ground on new locations, it also will keep adding shops in cities where it already has a presence. Its e-commerce site has been another strong growth engine—mostly generating sales from customers who live where Hot Mama has stores. In the past two years, online sales grew more than 100 percent, an increase Tamte attributes to hiring a full-time web designer.
The fact that Hot Mama is debt-free and funds its expansion with its own profits is “one of the beauties of the business,” says investor Ric Pedersen, who has served on the Hot Mama board for five years. Pedersen, an Illinois-based bond trader, was looking to diversify his interests when a friend introduced him to Megan’s husband, Mike Tamte, who serves as Hot Mama’s chairman and CFO. Pedersen was sold on the concept and the couple, noting that they are “all in” on the business, still working with passion and enthusiasm for Hot Mama nearly a decade later.
“The idea that you have kids and you have a stylist who personally gets to know you and help you—I think that’s the success. They’ve been true to that mission,” Pedersen says
Tamte’s calling remains front and center, one that buoys her amid all the hard work. “It’s very rewarding to know that we get to touch more lives of moms,” she says. “Hopefully, in some small way, we get to make their day better or make them feel beautiful and supported in their journey of motherhood. Opening up 12 stores this year is a lot of work, but it’s an act of love and service for moms.”