Turning Excess Into Opportunity - Katie Feodoroff (KRF Merchant Service, Ex-Hilco Global, TJX)

Shivang (00:07)

Hello everyone and welcome to this episode of the ReCommerce show. Today's guest knows the off-price and liquidation world inside out, not from the sidelines, but from the front lines. Katie Feodoroff is the president of KRF Merchant Services and one of the most trusted voices in inventory strategy, liquidation and off-price retail. Her career spans more than 25 years, starting at TJX companies, where she rose from an analyst role to a senior buyer role, overseeing over a billion dollars in category sales.

across TJ Maxx and Marshalls. She personally managed $250 million in annual sales and a weekly open to buy budget ranging from $5 million to $12 million. That earned her a reputation for sharp trend forecasting and disciplined profit first decisions. But Katie didn't stop there. She went on to advise brands directly through KRF Consulting, led large scale inventory exits at senior VP at Hilco Global, and now runs her own firm.

Again, helping brands navigate everything from access challenges to strategic resale. Katie is a sharp thinker, a hands-on operator, and one of the rare leaders who can blend traditional merchant instincts with modern resale fluency. Katie, welcome to the ReCommerce show. We are thrilled to have you here.

Katie Feodoroff (01:22)

Thank you. Thanks for that great introduction.

Shivang (01:25)

Thank you. Yeah, so before we dive in, is there a motto or a code that you live by?

Katie Feodoroff (01:33)

Okay, so I'd say if I had a motto as far as my career is concerned, it's just always work with integrity. At the end of the day, what I've taken with me through my decades of experience is my reputation. And that's because I've always worked with integrity. I'd say if there's just a mantra I live by, it's trust the universe. Very simple.

Shivang (01:58)

That's really nice. Yeah, I think I resonate with that because if we kind of put our faith into something other than ourselves, things mostly work out.

Katie Feodoroff (02:10)

Yeah? Yes. Go with the flow.

Shivang (02:13)

Yes, yes, that's really nice. That's really nice. Awesome. So before we get deep into the podcast, we'd love to hear a little bit about yourself from yourself itself. what do you do today? What kind of problems do you solve for the brands and so on?

Katie Feodoroff (02:29)

Sure, so you know I've worked on all sides of off-price retail as a buyer, as a seller.

you know, anything that really involves the merchant mindset. Most recently at Hilco Global, I ran the wholesale division there and got more involved in full brand and store liquidations. So I've seen a lot and I want to take all those different experiences and offer my merchant services, which also has to do with like the rebrand of KRF merchant services

because if someone's looking for inventory and needs help in procurement, I can do that. If someone finds themselves in a position where they need to get rid of excess inventory, I can handle that as well. you know, there's, could also just offer advisor, an advisor role or a consulting role to help through projects, busy seasons, difficult situations. It's just me.

I'm very nimble, which is kind of nice. I can decide what I want to take on and what I don't. I love a good challenge. And it's been really fun working with a number of different brands in all different categories.

Shivang (03:42)

That's really nice. Yeah, mean, while we were researching you, we were quite excited and impressed by you've worked on from a buyer side, you've worked from a liquidator side, you've worked from a brand side. So you've been on different sides of the table when it comes to this particular space. Can you take us back a little bit with respect to when you started your journey in retail? Like, why did you decide to TJX and like what?

What were the early years in your career?

Katie Feodoroff (04:15)

So I've.

I had always been a big fan of their stores. I was an avid TJ Maxx and Marshall shopper. So I actually majored in finance in college and started my career in mergers and acquisitions at PwC. And it came to a point where I had to get my CPA to advance to the next level. And I had no interest in that. I had no interest in accounting. And it really forced me to look at what do I really want to do? And this was, I was still very young. I was only in my 20s here.

Because I was in mergers and acquisitions, I saw a number, I saw the ins and outs of a number of different companies in different sectors. And I was drawn to retail. So I really spent some time researching different jobs and roles within retail. And that's when I landed upon buyer. said, I want to do this. I want to be a buyer for TJ Maxx Marshalls. And I set out to figure it out.

And I really started over. started entry level buyer training program. I was only three years out of college, so it wasn't a step back. But I also was very motivated to cruise through the ranks there so I could get to where I wanted as a buyer.

Shivang (05:29)

Yeah, definitely. mean, looking at your career, you started as an analyst and then you moved on to a senior buyer role pretty fairly quickly. So I'm guessing you a lot of late nights, a lot of hard work went into kind of, a huge learning curve as well, I'm guessing during those first days. I mean, I can relate that to my early years as a professional where you're out of college, all you have is theoretical understanding. And sometimes it's not even in the field.

Katie Feodoroff (05:52)

Yeah.

Shivang (05:55)

the one that you're now working in, right? like during the, do.

Katie Feodoroff (05:58)

Yeah, I was obsessed. I was obsessed

with learning from everyone there, with shopping the store, shopping the competition, learning the market. I would do anything to work late, help anyone with any project, because at that point in my life, and I didn't have kids yet, it was my baby. It's all I wanted to do.

Shivang (06:13)

Mm-hmm.

Mm-hmm.

No, that's, I think people who are earlier in their career, I think that's a great advice for them that you need to throw in yourself into that problem space to increase, to be five years ahead of the competition, like the critical competition with respect to if you put in your entire time into a problem, a space, you would grow faster than the others. I mean,

All that while that was happening, you were also fairly quickly moving from, I'm guessing as an analyst role, you were doing a lot of data analysis, but then you were a senior buyer where you were looking at billion dollar categories and a lot was on your shoulders with respect to making the right decisions, making sure it's profitable for TJX and at the same time relationships are maintained and whatnot. how, like what were your, like you must have.

You must have had a lot of experience during the time. can you like dive in into that where what was that journey from an analyst to a senior buyer where over a period of three, 45, seven, eight years, you were now responsible for a $250 million annual budget in a $12 million weekly buy-in, is, which I think is really a lot.

Katie Feodoroff (07:31)

Yeah, so ⁓ yeah, as an analyst, it's a lot of ⁓ just truly understanding the plans and retail math and how it all works, where you want to ship what. ⁓

You can collaborate a lot with the buyers during that time and I did. you know, what's nice about TJX and this really sets them apart is it is all about the team. The bonuses there are based on total company. It's not, you know, if your particular area does well or your buys do well, you are motivated to help everyone else learn from everyone else. If you're buying

dresses and dresses are down trending but shoes are having their moment and they need open to buy they might take that from you and give it to the the shoe department and that's okay like you can't be only focused on your area the entire company is based on what's gonna lift the total ⁓ top line

And ⁓ in doing that, also are forced to learn from or have the opportunity to learn from so many different people. And you kind of

take from everyone what works for you and create your own toolbox. Because the first time you're in the market, you have that checkbook. The buyers at TJX are very autonomous. There's not this huge process. If you make a bad buy, it's your mistake. It's not like, well, had to go through all these levels of approval so someone's going to catch it. So it can be scary, but the

There's just a merchant gut instinct that luckily I have. And you can't be scared. You can't second guess. You have to take risks or you're never going to learn what that next hot item is. But how do you take a calculated risk? How do you test it in certain stores before you go big?

Shivang (09:38)

Mm-hmm.

Katie Feodoroff (09:42)

So it's an absolutely incredible company to start your career at and to learn all these different tricks of the trades. They also move around buyers quite a bit. So that's another way you can learn all different categories and work with some of the best merchants in the business.

Shivang (10:02)

Yeah, I mean, that sounds like a very supportive environment where, you know, you're like, you're collectively trying to grow the top line versus you're on your own, your decisions are your own. At the same time, there's an autonomy where you don't have to go through the red tape of take someone's approval. And by the time that trend has gone, that deal has gone or that particular piece of inventory is no more in the market.

Katie Feodoroff (10:24)

Yeah.

Shivang (10:28)

Were you also doing some sort of trend analysis while you were making these decisions with respect to, you mentioned that you were testing things, which is a great way to scale a category, but were you also doing trend analysis with respect to this is what's selling in the market, this is what our consumers want and whatnot?

Katie Feodoroff (10:36)

Mm-hmm.

yeah, so kind of

like the cadence of the week on Monday, you come in, you get your selling reports, what's working, what isn't what, you know, what category, what price point what color at the time I was buying junior sportswear. So pretty quickly at the beginning of the week, it's easy to say, do I want to buy this week? What is working? And that's how nimble

Shivang (11:01)

Mm-hmm.

Katie Feodoroff (11:12)

off-pricers can be because it's weekly buys. And that's why it's always important to have immediate liquidity to chase what's working that week. And it's also as important to look at what's not selling. Was it a price point issue? Was it a quality issue? Another way besides just analyzing our reports, of course we use trend services and understand, next season, the season after, what are they showing?

Also, I would learn so much from my vendors. My vendors were sitting down with every buyer in the market. okay, what's the Nordstrom buyer asking for? And just trying to keep my finger on the pulse of what's next.

Shivang (11:42)

Mm-hmm.

Katie Feodoroff (11:56)

So I'd always structure appointments really in like three parts. So number one, review current selling, review on order, where are we at? Is there anything we need to go back, review, try and get out of, try and get more of?

Number two, what are your immediate close-ups? Like what's a crazy deal? Did you just have a cancellation? Like make sure I jump on that opportunity. And then number three, what are you working on for your next delivery? What is everyone else asking for? What are you excited about? When you were just traveling Europe, what were they showing? you know, understanding what's coming next around the corner. So it's always, you know, you need to have your eye on what's happening now and what's going to be happening and make sure

your plans reflect that and your future buys reflect that.

Shivang (12:45)

Yeah, that makes a lot of sense. I think it's a complete strategy where you're looking at the trends, you're looking at what's coming, and then you're looking at, you're scaling it through testing. So I think I have to summarize that. That's the way to summarize it where it's a very consuming job, as I can kind of imagine what you are doing where there's no particular, there's no structure to it. At the same time, you're looking at it from multiple angles and trying to still make the best decisions.

where actual money is at stake. you know, like, sounds super exciting and intimidating at the same time. Awesome. Yeah, let's make a segue. from going from, you know, your time at TJX, you then entered the entrepreneurship world with your own consulting firm. Like what, what, what was that driver to go independent and, you know, go into that route of entrepreneurship?

Katie Feodoroff (13:19)

Not for everyone.

Yeah,

that's a good question because I would have absolutely never left TJX. At the time I started in their Boston office, I ended up moving to their California buying office. And throughout this time, I got married, I had my first daughter, I was living very far away out in California. And we just as a family decided we wanted to move home to Chicago, be around family. At this time, my youngest was like two and a half. So,

That's when we left to Chicago. there really wasn't, unless I was like in stores, which wasn't where I wanted to go with my career, my journey with TJX was somewhat over. But that's when actually my manager at the time was moving from junior sportswear to missy sportswear.

And she said, you need to help us. You need to create a Missy line for some of these junior resources. So we had these great resources that knew how to work with us. They were trend right. And at the time, the Missy department and the Missy market was just much more moderate, slower, not as fashionable. So our junior business, we were able to capture a lot of what we call that crossover customer.

that

on trend, but she is a Missy customer. She's that age, but she still wants to look cool and contemporary.

So that was really the catalyst and it was at the recommendation of TJX. Like maybe you can start Missy Lines for some of these folks to help us out. So that is where it started. So I moved home to Chicago after about a two month getting settled. I started working with about two resources on the West coast, two on the East coast where I was helping them create a Missy Line.

Shivang (15:11)

Mm-hmm.

Katie Feodoroff (15:27)

using what they knew from their junior trends. And that was really what took off then with KRF Consulting, because then it grew from there to not only TJX, but working with other off-price. But I really always kept it what I call a top tier. So I worked with Ross Burlington and TJ's Missy division for a number of different vendors, helping them capture on trend

products.

Shivang (15:57)

Got it, got it. So like for my education and I think the audience's education like Missy Line essentially is like, know, like when you're growing old, like what exactly does Missy Line mean?

Katie Feodoroff (16:08)

Yeah,

anyone, so Junior would be in theory like a teenager, maybe you grew out of it when you're 23 and Missy is like ladies sportswear. Sorry, yeah, so we call it Missy, but it's ladies sportswear. But at the time there was like, what do you wear in your later 20s, 30s, early 40s when actually you still are going out and you wanna look cool, but you're not gonna fit into this like bubblegum Junior.

Shivang (16:19)

Car and car.

Katie Feodoroff (16:32)

you know, short shorts or what have you. So being able to like evolve that trend right fashion into ladies sportswear. And this was a long time ago, so it's come a long way and there's, know, ladies sportswear has a number of different tiers now within it, but at the time it didn't. So that was really the springboard for what I started doing.

Shivang (16:36)

Mm-hmm.

Mm-hmm.

Got it, that makes sense. So it seems there was a trend that was emerging and then your timing worked out and you capitalized on it and kind of set out to kind of help these, were you working with other than TJX as well? You mentioned Ross and Marshalls, were you working outside?

Katie Feodoroff (17:10)

Yeah, so it started

just working with TJX stores and by TJX, you you have TK Maxx in Europe, have Winners in Canada, you have their e-commerce division. So that alone is really a full-time job. But then yes, you know, once TJ's is doing it,

Well, this will work for Ross too. Well, this will probably work for Burlington. So yeah, I grew from there. And that was really, I focused on those, for those like 10 years of my career, I was creating off-price lines for those three major off-pricers.

Shivang (17:45)

got it makes sense. And during this time, mean, your career moved from being on TJX on the off price retailer side to the brand side, right? So did your perspective change? Or did you were able to connect the dots where because it's essentially moving the other side of the table, right? So it must have been a different experience in that like what were your like, what was the perspective change there?

Katie Feodoroff (18:02)

Yeah. Yes.

I mean, it's the ultimate

like grass is always greener on the other side. But wow, is it eye opening to switch sides? You know, they both have their challenges. I think it's kind of nice as a buyer, like you're the decision maker, whereas a seller, you're you know, you're at the end of the day, you're not signing the PO, you're trying to get the buyer to buy into what you're selling. So you give up some of that control. But I

Shivang (18:10)

I'm

Katie Feodoroff (18:32)

I still identify as a buyer. So I always say that's been my success in every role. Like the secret to my success in every role that I've taken on is that I still think like a buyer, what do they want to see? What's going to make their life easier? How are they going to want to dissect this spreadsheet and look at, you know, total units, total units per store, average ticket, and manipulate that for them and make it easy. I'll even put buys together. Some of like,

I really like this. I'm way too busy. I'm never going to get to it. Like, okay, tell me how many stores you have. Like I'll create this buy for you and I'll create this assortment for you. And really looking at it as a buyer, not a seller. Like the last thing I'm always very honest in that sense too. Like, I'll be the first to say, look, this isn't the best seller, but we have too much of it. I really need a little help here. I'll give you a price. It needs to disappear, but maybe you can like fold this into this overall buy.

so we can help each other out, ⁓ but just always being very transparent.

Shivang (19:35)

Makes sense.

actually, you know, that's something that resonates with me as well. When you do your own thing, when you run your own company, you get to set your own ethos and you get to, you know, like be honest and more transparent versus when you're working for a large company, you have to, you know, go by the rules or like be more in line with how the business operates, right? So, ⁓ transparency is a big thing, I think, in this industry because, you know,

Katie Feodoroff (19:55)

Yeah.

Shivang (20:02)

It's a relationship based industry. If you help someone, would kind of value that and would want to reciprocate. You were like, were you like during that time?

question came to my mind was that as you know, brands, lot of brands that I am seeing, some of them want to work with off-price retailers, some of them don't want to, some of them have restrictions when it comes to their existing, you know, retailer relationships that if they're selling in Saks or, you know, Nordstrom, they might have some constraints with respect to which off-price retailer, if any off-price retailer they can work with, like, you, were you,

tackling those issues as well where brands had excess, they knew Off-Price is the right channel for them, but they were hesitating given the retail relationships they had.

Katie Feodoroff (20:45)

Yes, always. mean, that's, you know, going to always exist.

It's an interesting position because there are some companies that are begging and and they'll do anything to work with you and they see the value and then there's other That are very concerned about brand protection and nope. I'm not returning your call You know closing the door so it can be very humbling You know you you're it's kind of nice your head can't get too big so you have the people chasing you but you also have the people closing the door in your face, so You know it takes time

Everyone at some point is going to find themselves in a position where they have excess and they need to move it. It happens to everyone. whether it's a cancellation, a trend that doesn't go right, a quality issue. So it is always important to have that one person, whether it's me at KRF Merchant Services or someone else that you know you can call to get you out of this situation. It's going to happen at some point. So, you know, be careful who you keep saying no to because eventually you're going to

need them. Does that answer?

Shivang (21:53)

Yeah, yeah, yeah, that does.

It's, mean, yeah, I mean, I think some never want to get into dealing with their excess through a more, you know, like organized way, but some definitely see value in it. And saying no is never the right strategy because you never know when you exactly would need it and when you'll have a cash crunch and at that point of time, you would need.

Katie Feodoroff (22:09)

Yeah. Yeah. And it can get

tricky. Like you asked about kind of like with, different off prices, you know, someone might say, if I see your product at TJX, these orders are canceled. So you do have to, you know,

make sure it's the way if you're on the brand side, make sure it's the right move for your brand. Is this going to hurt your business somewhere else? So that's why like at KRF Merchant Services. Further on in my career, I've really learned all the different levels of off price. Like we've been talking what I call top tier right now, which is your Burlington Ross TJs Nordstrom Rack.

Shivang (22:31)

Mm-hmm.

Katie Feodoroff (22:51)

That is the the icing. mean, there are so many different tiers, local off-pricers, exporters. So if your brand that you're like, cannot have my goods show up at an off-price store in the United States. Okay, well, let's work on an export strategy. I work with these people and they will export it and it will be sold in South America. So always understanding, you know, you can work within geographic restrictions, chain

restrictions, some say, okay, this just can't be sold at Walmart or, know, like something because they have a full line business there. So we're setting the guardrails and working within that to make sure it doesn't hurt the brand.

Shivang (23:36)

that resonates with us as well. Like we have brands that want to, that are more comfortable creating a market internationally, maybe in New Zealand, maybe in Africa, maybe in South America, just because they don't want to touch their primary market. And, know, like they are quite conscious of what their retail relationships are. Yeah. Super insightful. think we've covered a bunch so far from, from there, you, you know, you, then you made, made a switch again into the corporate world.

as a senior VP at Hilco Global. What was that shift like? Working at TJX, running your own company for a decade and then moving back to a corporate environment. What was that flip like?

Katie Feodoroff (24:17)

Yeah.

That was a huge change. happened. was the very beginning of COVID. I was not looking, but I was living in Chicago. I was traveling to New York about once or twice a month to meet with my buyers. So now New York is shut down. Some of my buyers are furloughed. Things are not happening. So it was really, my gosh, what am I going to do now?

Shivang (24:23)

Mm-hmm.

Katie Feodoroff (24:40)

And, you know, at this point, my kids are home. They're doing homeschool. So I was just like, OK, I'll ride out this wave. Hilco, actually, I didn't even know they existed. They're right here in Chicago. They had reached out to me at this point. Their business was off the charts because they run these major liquidation events and store closing events. And it's the beginning of COVID and all these stores are closing. So they are closing.

Shivang (25:06)

Mm-hmm.

Katie Feodoroff (25:10)

and Lord and Taylor and then Century 21 and Steinmark and all these stores that didn't make it.

My role there was really twofold. One, it's okay in these major store closing events, we would buy inventory in the off-price market to ship into these sales to maximize the overall sales for that event. And then number two is just moving excess inventory. There may be a portion of the inventory you're not going to sell through stores, you have to liquidate that or just moving

other excess inventory. So it was a big shift in one sense, but in the other, it's actually the two things I had done. Like I've been in sales and I've been in buying. So it kind of was like the perfect role for me. And, you know, then it was a wild five years, for long I was there.

working on all those different liquidation events that happened in the last five years. was an incredible learning experience.

Shivang (26:20)

That's super insightful. were looking at large scale liquidation, Like where multinational companies are either going out of business or are trying to improve their profitability, especially around COVID where physical shopping was almost dead. most, I was at Amazon during that time, we saw like

extreme growth during that time where I think the business was four times within like two years time frame itself. But on the other hand, physical retail was struggling with, you know, like no traffic ⁓ at all. So like during that time, now that you were looking at large scale liquidation, were you, did your mindset change because then you're kind of also on a time crunch, right? Like I need to.

Katie Feodoroff (26:45)

huh.

Yeah.

Shivang (27:05)

in three months, I need to get rid of $40 million worth of inventory. That's an extreme scale is what I would say within the liquidation industry where when you're looking at this kind of events.

Katie Feodoroff (27:16)

That's a huge shift, the timeline and the amount of people involved. there, you know, it's not just the buyer and the seller. It's, there's creditors, bankers, finance professionals, real estate professionals, intellectual property professionals, all.

need receivables all needing to get their part of this liquidation resolved within the timeline. So there may be you know, full brand liquidation and they need to be out that warehouse needs to be emptied and cleaned by this date by the end of this month. Well, the fixture and furniture folks need to get in to get all the racking and the machinery out well, the inventory has to go before

So, so many people rely on these very strict deadlines.

And yeah, I was working on a big project. was $68 million at cost that had to be moved in like, it was, it was less than six weeks. It was about five weeks. Now you're also balancing that with needing to maximize the recovery because that's what the bankers over here care about. So you're starting with your major off prices where you'll get more before you kind of like go down the pecking order.

So to really go at it at with a tiered structure and okay, we've exhausted this now we're gonna move here now we're gonna move here but having a very solid strategy and and timeline with how you're gonna do that, but it's like a constant sprint. So it is very intense because you might be in the middle of that deal and another huge liquidation

Well, now you need part of your team over here. So how are going to manage that? And then right when that ends, maybe you have a week to catch your breath and another one starts. And you have no control over that timing. There's court dates. There's different rulings. no, you thought this was going to start, but the can just got kicked on the road a little.

So you can prepare, but then suddenly you wake up to a headline, you're like, oh my gosh, this company filed, here we go. So it's a lot. But again, it's a super dynamic environment. It's fulfilling, it's exciting. You learn a lot, but it's exhausting.

Shivang (29:40)

Yeah, mean, we, my company, Commerce Central got involved in a similar deal when a, where a multi, you know, like a big retailer went out of business. And yeah, I I resonate with what you're saying. It's a lot, and there's a lot of, there's a lot of work. It's not as simple as here's my excess inventory, who's going to take it. You have to kind of make sure, because you're dealing with large amount of inventory, you need to find the right kind of buyers as well who can take that much inventory.

because if a large business is going, like filing chapter 11 or is liquidating, they won't go for the smaller deals. They want the bigger players as well so that they can get rid of it within a certain amount of time. And the pool of people that you can sell to becomes very small in those instances. And I mean, did you also, like during that time,

Katie Feodoroff (30:07)

Yeah.

Mm-hmm.

Shivang (30:34)

Like this is one experience that I have when you're liquidating larger amount of inventory, your margins suffer. Like you're literally looking more to save your operation costs and you're going to make five cents on a dollar or something like that. Did you also feel where these lot where people are liquidating larger the amount of inventory you have lower your margins would be, does that resonate with you?

Katie Feodoroff (30:56)

Yeah, so I always kind of say there's three levers that kind of give and take recovery. So how much you're going to get speed and brand protection. So if you're on a tight timeline and you need to move it fast, yes, recovery is going to suffer. If you are concerned about brand protection and you're insisting these goods leave the country, recovery is going to suffer. And potentially speed. If recovery is your highest concern,

Shivang (31:03)

Mm-hmm.

Katie Feodoroff (31:24)

and

you want to get the most for it, okay, it's going to take longer. We're going to be very patient. We're going to like divvy it out here and there and maximize the recovery. So absolutely, in these large liquidations where you're focused on cost savings to, know, because you're eliminating the head count and you're getting out of leases and like solid reasons why these goods have to go, of course, recovery is going to take a hit.

Shivang (31:53)

Yeah, makes sense. during that time when businesses are going out, their primary met- like out of these three things, I'm getting plan protection would be the least and you know, like,

Katie Feodoroff (32:04)

Yeah, at this point, yeah, so for a big liquidation brand protection, they don't care because it's over. Typically, sometimes there's, you're working with the intellectual property team who might be selling the brand. So that makes it really interesting where, okay, then sell it. And this has happened where.

Shivang (32:11)

Yeah.

Hmm hmm hmm hmm.

I see.

Katie Feodoroff (32:25)

We work closely together, and you're selling the brand to some that ends up buying most of the inventory as well. So they can control that because they're moving forward with the brand.

Shivang (32:36)

makes sense. it's like someone else has bought the brand and they want to protect the brand in order to take it.

Katie Feodoroff (32:41)

Now they don't

want, they care. Someone else suddenly cares about what happens with this excess. I'm like, okay, you can either buy it. That's the only way to control what happens is if you buy it. So they did.

Shivang (32:47)

That makes sense.

That makes sense.

Yeah, I agreed. Margins, speed, and brand protection, those are the three levers that even exist today, which people, and they are all trade-offs. If you want one of them, then the other would suffer. If you want the other one, then the other one might suffer. And every brand has a different priority based on where they are, what they are doing with their brand, and what not.

Katie Feodoroff (33:09)

Yeah.

Yeah.

Shivang (33:18)

Awesome. Let's make a segue into, you know, like now that you've, you know, like again, went again into the entrepreneurship world with the KRF merchant services, like what inspired this, you know, like jumping back into entrepreneurship? I find it inspiring, like personally, like you, like your journey of how, you know, exciting it is to kind of jump back. Like what inspired the relaunch though?

Katie Feodoroff (33:37)

Yeah.

So we kind of already touched on how intense and exhausting that true liquidation environment is. So that was really the biggest piece. After five years, I'm a mother of three. I felt that I was giving 90 % of my energy to that. And I was needed elsewhere. The major catalyst at the time, not to be a downer, but my mom received a really bad cancer diagnosis. And it just kind of stopped everything. I took a leave.

Shivang (33:50)

Mm-hmm.

Katie Feodoroff (34:11)

her end of life and after that I couldn't just dive back into that world I had been living in. and Hilco was awesome and understanding and willing to you know do whatever it took but I just was ready for a change. I needed to make you know a change where I could control what deals I took on, who I worked with, what I worked on.

⁓ the time I spent working on it. and I abs I miss everyone I worked with. miss having, experts to rely on having, you know, my financial analysts to crunch the numbers and my director of operations to help with that aspect. Like now it's only me, but I'm also a lot more nimble and have to choose what I'm going to work on. And you know, I, I choose wisely and I'm saying no.

lot because it needs to, you know, there needs to be like enough meat on the bone that it makes sense. And it's something that here's the strategy I think we should do to move this. Do you buy into it? If not, okay, good luck. If so, awesome, let's go. So it's been, it's been great. It's been the past year and I love working for myself again.

Shivang (35:30)

Yeah, I mean, that sounds really exciting. like, like from your first in the entrepreneurship has like, what has changed like from what you were doing with KRF consulting and what you're doing with KRF merchant services.

Katie Feodoroff (35:42)

Yeah.

So, KRF Consulting is really focused on merchandising full lines of apparel. Like I was very focused on creating apparel and selling it to off-pricers. So, KRF Merchant Services now, I'm working with all different categories of product and I'm truly focused on either procuring or selling excess inventory.

So I'm not building product anymore. I'm helping either companies that are looking for specific goods that I think I can find for them, or companies get out of excess inventory that is no longer productive. I'm also very interested in resale and secondhand and pre-loved and how that fits into this.

of over the last few months been my deep dive all the new fashion tech that is absolutely propelling that industry forward. So

You kind of have, you know, I went from off price to liquidation and now I'm learning a lot more about resale. I started actually a social media handle called Recovering Fashionista where I vowed to buy nothing newly manufactured for a year and exploring the different resale outlets as part, as you know, another space of re-commerce.

Shivang (37:05)

That's super exciting. We'll put that in the comments to kind of people to follow and kind of see for themselves and learn in that space. So the brands that you're working with today, out of the three levers that we discussed, which one do you think they value the most? Are they looking for brand protection more? they looking for which of those levers matter the most in today?

Katie Feodoroff (37:11)

Awesome.

Yeah, so I'd say

of what I've been working on, it's been recovery. You know, they want the most for it. ⁓

Shivang (37:27)

Mm-hmm.

Got it.

Katie Feodoroff (37:34)

Yeah, you know, with everything going on with tariffs, and this, the changing environment over the last few months, it changes daily. ⁓ The value of goods, if you have inventory suddenly, is that 30 % more valuable, because that's what you're saving by not bringing it in. So the pendulum has been like swinging kind of wildly. And, you know, just staying focused on are you trying to solve a problem?

Shivang (37:43)

Mm-hmm.

Katie Feodoroff (38:00)

Are you trying to create space? That's not changing. Let's move this inventory for you If it's not a problem and you think you can wait and get more for it you do what's right for your business

Shivang (38:10)

Makes sense. I've seen tariffs has been definitely been an impact to the business. What I saw when the tariff situation came in was brands were more hesitating to get rid of their excess inventory because they were not sure of, know, maybe we should keep it. Maybe we'll be able to sell it as regular inventory. you, did you, what are you seeing with respect to tariffs right now where this industry is going?

Katie Feodoroff (38:35)

Yeah, I saw

that. Now I feel like a lot has been bought up, especially in certain categories, like the buyers also shifted like, Whoa, let's focus on trying to buy up what's here now.

So you kind had that happening with brands at the same time saying, ooh, I don't know, maybe we shouldn't sell this. But I do think a lot of inventory that was sitting was purchased by retailers. And now we'll have to kind of see how this plays out over the next few months as on order. think there's going to be big gaps in on order coming through. And the pendulum is going to shift back the other way to, my gosh,

Shivang (39:01)

Mm-hmm.

Katie Feodoroff (39:14)

we need goods, there's nothing left. So it'll be a ripple effect for the next nine months, at least.

Shivang (39:18)

Mm-hmm.

Yeah,

yeah, definitely. I mean, there would be lot of uncertainty for sure. Like with the tariffs first increasing, then decreasing, there's going to be a lot of bullwhip as well where people will then feel the FOMO of that. Hey, let's just get as much inventory as we can into our US warehouses or wherever the local country is. And then if something changes, there would be a lot more surplus. So like,

I'm not hoping for other people to have a lot of surplus inventory, but my hypothesis is that in the next six months, the amount of surplus industry inventory will be much higher than usually.

Katie Feodoroff (39:57)

Yeah, we'll see. Because then it also looks like what's happening with the consumer, right? With the consumer's uncertainty. Are they going to pump the brakes on spend? So far, business has been good. So you're getting kind of like a lack of confidence and uncertainty. But at least in the off-price space, sales are healthy. Slow.

Shivang (39:59)

Yeah

Yes.

Yeah.

Yeah, I was looking at TJXs. I think they're doing better than Target right now. I guess that's the evidence that consumers are becoming a bit more price sensitive and they're looking for better deals in general.

Katie Feodoroff (40:32)

Yeah,

the off price is a little protected like that where they can thrive when the economy is great, but they're protected as sometimes they can gain a customer kind of, you know, stepping down and being, you know, more conscious of how much they spend and wanting to save money. So maybe not shopping the department store, but shopping the off price stores.

Shivang (40:36)

Yeah.

Yeah. And then the trend that you were pointing to, which is the secondhand resale, think that's booming as well, a lot more customers are comfortable now to buy, like, return product, secondhand products, thrift product. those industries, think, going, those industries are like, I feel like that's the next generation of...

Katie Feodoroff (41:15)

It's so exciting. think,

you know, the younger generations have already adopted it and they're all over, you know, Depop and Poshmark and thrifting and Goodwill hauls and all that. think, you know, kind of like my generation's a little not as into it.

Shivang (41:29)

Mm-hmm.

Katie Feodoroff (41:35)

I never was a thrifter and now it's all I'm doing is buying in some way pre-loved clothes, whether it's a neighborhood consignment sale, Poshmark, an upscale consignment store. And then there's just so much technology that makes it easy. So not just like the Poshmark and the ThredUp, but...

There's like, Benny's an app that you can, it's sort of like, if you're looking to buy something, it's an extension where it says, actually, here's where it's available in the secondhand market and what you can buy it at. It's crazy that you can just, it's that easy to say, okay, nevermind, I'm not gonna buy it here, newly manufactured, when I could buy it in the secondhand market for a third of the price. ⁓

Shivang (42:21)

Yeah, definitely.

And especially when you're buying fashion where, you your use is going to be probably like,

20 times it kind of makes more sense to buy pre-loved versus new

Katie Feodoroff (42:32)

Yeah. Yeah.

And if focus on buying fashion that's going to stand the test of time, then you could resell. So if you know going into it, OK, I can buy this and I'm going to be able to recover half my cost and sell it when I'm done with it in a year, it changes the whole mindset around the purchases that you make and make shopping just more intentional, which I think is just a step in the right direction with just all the overconsumption.

Shivang (43:01)

Yeah,

definitely. So I think we've gone through your entire career, kind of brought out a lot of insights. you know, like few, think few, you know, let's touch a little bit just upon the entire overall, you know, industry brands and all the people in the ecosystem. So the question that comes to mind is, you know, like what's, you know, what kind of mistakes do brand make when they, when it comes to liquidating their inventory, you know, like you've, you've seen a lot.

Katie Feodoroff (43:27)

Yeah.

Shivang (43:28)

in your career and you continue to see like what mistake, what is one mistake that you see brands commit a lot often.

Katie Feodoroff (43:35)

Yeah. I mean, the number one is that it's not fine wine. It's not going to get better with time. Move on, solve this problem instead of touching it, paying to store it, moving it, reworking it, having your sales team get their eye off the ball. And instead of driving profitable sales, dealing with this problem. Like if you know you have an inventory problem, stop paying storage on it. Hire someone like me to sell it. So your existing team can focus on, you know, actually

Shivang (43:40)

Mm-hmm.

Katie Feodoroff (44:05)

driving profits versus this loss that you're going to take over here, resolve it so then you can move on and truly focus on the main engine of your business. Often when I'm dealing with a CFO or the finance team, it gets really difficult because they're looking at, but it costs this much to make. It's like, you have to get over that. I understand.

Now you're in the off-price market. Now what's the value? What's the demand? Who can take this? Who can solve this problem? Not what you paid for it.

Shivang (44:38)

Yeah, I mean, I would agree with that. think brands wait a lot longer than they should just because they're waiting for a miracle that something's going to happen and this product's going to either become more valuable than it is. But at the same time, they don't weigh in the storage costs, the operational headache, the cash tied up to that inventory, which then can be utilized towards selling to other places. The other thing that I see is a lot of brands don't

Katie Feodoroff (44:57)

Yeah.

Shivang (45:04)

still don't look at a re-commerce or resale liquidation, I think, as part of a general channel, just like there's a direct to consumer channel, just like there's a wholesale channel. There's a re-commerce channel that every brand needs to consider where I'm, this is just part of my life cycle. If I'm gonna buy products, if I'm gonna do some forecasting in order to see how much product do I need, there's always gonna be excess. So might as well plan for it better so that I can,

Katie Feodoroff (45:16)

Mm-hmm. Yeah.

Shivang (45:31)

you know, recover more value before it's, before it's, you know, the before all the value is gone out of that product. So you, you, kind of, if you integrate it at and consider it as a channel, then it kind of becomes better. So that's one mistake I see a lot of brands doing where it's always an afterthought. Now it has happened. What should we do? And then it kind of becomes like a fire sale, three months, two months kind of project needs to go as soon as possible.

Katie Feodoroff (45:45)

Yeah.

Yeah.

Yeah, absolutely. I absolutely agree with that. It could become a profit center, know, closeouts can be profitable. If, you know, done at the right time to the right customer, and then you're gaining a new customer you didn't have before, what else can we feed them and create for that, that new customer you have so it can maybe it even starts off as a loss, but it can become profitable.

Shivang (46:04)

Yes.

Yeah, definitely. I mean, I yeah, 100 % like it's a profit center where it's just your rec. It's just part of your entire, you know, buying inventory and selling inventory. It's just that the tail end of it is always going to be less profitable, but at the same time, it needs to keep moving so that things that are more profitable are always in stock. Awesome.

Katie Feodoroff (46:34)

Mm-hmm.

Yeah.

Shivang (46:49)

The next section that I have is, we have touched it already on the future of Re-commerce and off-price in general. And I we have already talked, spoken about what excites. I think we shared that thought where this resale secondhand pre-loved is emerging. But what else do you see as an accelerating trend which is going to dominate the Re-commerce resale liquidation industry in the next five years?

Katie Feodoroff (46:56)

and

Yeah.

So I would say, just not to overuse the buzzword with tech and AI, but it is changing the environment, the ecosystem of off price. I think so much used to be who you know and needing to get into places and nurturing those relationships to truly undercut or.

find all the diamonds in the rough, so to speak.

There's so many platforms now that just list the excess inventory, auction off excess inventory, even LinkedIn, someone posting, I have this available. The accessibility because of technology is so vast and now international buyers easily have access to brands they didn't have before, live streamers, whatnot sellers. It's just completely changing who.

has access to brands excess inventory. So that's been exciting to watch and even just how people shop with TikTok shop. So technology is changing kind of, as with every industry, all aspects of how it functions.

Shivang (48:24)

Yeah,

yeah, I mean, we are part of that new kind of, you know, like, like, I don't want to call us a generation, but like we are we are part of that we are trying to bring artificial intelligence as much as we can to this resale liquidation, you know, Re- commerce world with better routing of where the product needs to go. I think that's one thing that we see a lot where

Katie Feodoroff (48:28)

Yeah.

and

Shivang (48:46)

Everything is not just one broker, one relationship channel. You need to segment it into multiple ways where something might be a better fit for a direct to consumer channel. Something might be a better fit for a B2B channel. Something even might be better financially for you in a charity channel. So using artificial intelligence to route where exactly is the better way. I think that's more of a backend, but I think what's happening in the front end as well as exciting as you were pointing to, right? Like these live shopping channels.

Katie Feodoroff (48:56)

Go.

Yeah.

Shivang (49:14)

plus there's there's Shein now. There's a lot of marketplaces in general that exist now where someone can exhaust their excess inventory, which didn't exist, I think a few years ago where the only way to get rid of those inventories was if you have a broker or if you have a distributor who would buy all of it from you in one go, but they won't give you the kind of recoveries you can get if you kind of

Katie Feodoroff (49:35)

Yeah, exactly.

Shivang (49:41)

divide it among different channels and try to get rid of it. It definitely needs more strategy, but at the same time, your recovery is better, your brand is more protected because then you're not risking it by providing all of your inventory to one distributor to take care of.

Katie Feodoroff (49:44)

Yeah.

Mm-hmm. Yeah, agreed.

Shivang (49:59)

And yeah, definitely. And one other thing that I want to point out is this, you know, like this advent of private marketplaces that we are also taking part in where, you know, there are marketplaces, there's auctions happening online, but brands sufficiently, you know, many brands don't want that to happen publicly. So there's also a need for...

Trust on both sides where the brand can feel comfortable that I want to sell my excess inventory, but I'm not selling it publicly. And it's not coming up with someone's looking up my name online. then they see that, Hey, there's an auction going there. Right. So there needs to be more marketplaces, but they need to be like in my opinion, they need to be more private where only parties, which both are comfortable with.

Katie Feodoroff (50:42)

vetted buyers.

Yeah, well, everyone's not seeing it. And you can control which buyers see which deals and such. Yes.

Shivang (50:51)

Yeah,

that needs to happen on both end. Yeah, I completely agree with you where you're not just matching. You're not just showing everything to everyone. If that's not a fit for your business, you don't need to look at it and vice versa. So yeah, I think this industry is becoming more and more important part of retail. innovation has reached point where people are using AI to do better demand planning forecasting.

Katie Feodoroff (51:05)

Yeah.

Shivang (51:16)

this tail end I think still in the next five years would be super crucial.

Katie Feodoroff (51:21)

Mm-hmm.

Shivang (51:22)

Awesome. I want to touch on, like, like you've been an executive, you've been a senior buyer, you've been in high pressure environments, taking big decisions. Like, what would you kind of tell to a retailer or a brand right now who are in a situation where they're sitting on, you know, like 40 % of their inventory is excess, and they are like, just debating what should I do with it? So what would be your advice to them or, you know, just

how to deal with it.

Katie Feodoroff (51:54)

So, ⁓ kind of like I touched on before, solve the problem now, don't keep pushing it, but always...

In sales or buying, I always say good, better, best strategy. So okay, here's what you have. How are we gonna segment this for you? Whether it's, okay, let's peel this off, and you will use strategy A for that here. This bottom part, we're gonna do strategy B and segment it so you're not just looking at one giant problem.

Shivang (52:07)

Mm-hmm.

Katie Feodoroff (52:27)

but extracting value from each part of it. looking through whether it's, there's companies now, there's someone I work with, they're called Style Democracy, and they have incredible events, and these sample sale events, where it's like in a convention center, it's one weekend, there's lines out the door, and then the inventory's gone. ⁓

Shivang (52:32)

Yeah.

Mm-hmm.

Katie Feodoroff (52:55)

So there's just so many different avenues. There's live stream selling. Okay, let's live stream from the warehouse and do pallet pulls. And you could actually, even though you're selling by ones, move a lot of inventory. So there's all these new channels on top of your typical, okay, we're going to sell this in bulk to this reseller or in bulk to this off-pricer. So, you know, really dissecting the opportunity and handling it now.

Shivang (53:21)

Mm-hmm.

Katie Feodoroff (53:23)

not pushing it off to later.

Shivang (53:25)

Yeah, yeah, I completely agree with it. Approaching it strategically and making a plan around it and then going after about it versus waiting for too long and then be in a crunch situation where when time is less, obviously the decisions become a little blurred. Awesome, yeah, this has been a pleasure. We are moving to the last part of our conversation. These are just rapid fire, one-liner kind of fun questions. ⁓

Katie Feodoroff (53:50)

Okay.

Shivang (53:51)

Let

me know whenever you're ready. Are you ready? Awesome. So best deal you ever pulled off.

Katie Feodoroff (53:54)

Yeah!

Best deal I ever worked on was selling or liquidating the Rebecca Taylor brand.

Shivang (54:06)

Got it, got it. Nice, If you could shadow one executive for a day or a buyer that you've, you know, like you've admired online or in general, who would you want to shadow for a day?

Katie Feodoroff (54:07)

Yeah.

Hmm.

I

would shadow Ben Cammarata, who is the founder of TJX stores, like the founding father of Off Price, to go back in time and really like creating this industry. That's who I'd show.

Shivang (54:31)

Mm-hmm. Makes sense. Yeah. I'd have

to look him up, probably find some books on him and read about him. One SKU that still haunts you.

Katie Feodoroff (54:39)

my gosh, these unfinished pillow covers. was liquidating an entire brand and they bring them in unfilled and then they blow fill them here and sew it. And they're beautiful, but they're unfinished. It was a nightmare.

Shivang (54:58)

Yeah, I mean that sounds like a lot of work.

Katie Feodoroff (55:01)

and there's only like three of these machines in the United States that can fill these pillows and like two weren't working and one was being sold. it literally like they couldn't be filled. That was fun.

Shivang (55:08)

Wow.

Sounds really stressful. Favorite podcast or book or show that you've been unplugging on recently?

Katie Feodoroff (55:17)

and

gosh, I love this that new Amy Poehler podcast, the hang time or hang out. It's fun. It's mindless. It's easy to listen to on a walk or when you want to think about something else. It's it's entertaining.

Shivang (55:40)

Nice. this is it on culture

or like like like fashion or like what what?

Katie Feodoroff (55:45)

She

just brings in like a different guest and they hang out. Yeah.

Shivang (55:48)

Got it, got it. No, that

sounds fun, like rendezvous conversation where you're just chatting about life. ⁓ If you weren't doing this, what would you want to, like what would you have been doing if not in retail and in this career?

Katie Feodoroff (55:54)

Yeah. Yeah.

If not in

retail, ⁓

So my silly answer would be I'd be a backup dancer for Beyonce or something. I love dancing. It brings me the most joy in life. I still dance two or three times a week. I feel like I missed my calling when I could have made that happen.

Shivang (56:23)

Yeah, that sounds exciting. think dancing is a great workout as well. So yeah, definitely. That's really interesting. Well, Katie, this has been really insightful and fun. And it's been a pleasure chatting with you. And really appreciate your time doing this. Thanks for the time.

Katie Feodoroff (56:28)

Yeah.

Yeah, I love

that you took interest in my background and invited me. I'm at a place where I'm just saying yes to every fun new opportunity like this. yeah, it's been fun talking about my favorite topic.

Shivang (56:53)

Yeah, likewise, it was really fun and insightful. Thank you. Thanks, everyone, for chiming in. Thank you.

Katie Feodoroff (56:57)

Great. Thank you.