How to Scale a DTC Apparel Brand Fast and Profitably
In this episode of The Free to Grow CFO Podcast, Jon Blair sits down with Peter Rizzo, co-founder of NicoBlu, to unpack what it really takes to build and scale a profitable fashion brand in today’s eCommerce landscape. From launching during COVID to navigating the brutal realities of apparel inventory planning, Peter shares the behind-the-scenes operational challenges most founders never talk about.
The conversation dives deep into the fashion business model — why acquiring customers is only half the battle, how repeat purchases drive profitability, and why inventory planning in apparel is one of the hardest games in eCommerce. Jon and Peter also explore the financial side of scaling a digital brand: cash flow management, balancing inventory risk, planning around seasonality, and the importance of having real financial visibility as complexity increases. They discuss how financial modeling, accrual accounting, and long-term planning became critical as NicoBlu scaled — especially in a business where trends, demand, and supply chain dynamics change constantly.
If you’re an eCommerce founder, operator, or apparel brand owner trying to scale profitably while managing inventory, cash flow, and growth marketing, this episode is packed with practical insights from operators who’ve lived it.
Key Takeaways
Strong brand identity and scroll-stopping creative are essential for acquiring new customers in a crowded digital marketplace.
In apparel eCommerce, profitability is driven less by the first purchase and more by repeat customers continually buying new products.
Financial forecasting isn’t a one-time exercise for eCommerce brands — it’s an ongoing operational discipline that evolves as demand, marketing, and supply chain conditions change.
Episode Links
Jon Blair - https://www.linkedin.com/in/jonathon-albert-blair/
Peter Rizzo- https://www.linkedin.com/in/petermrizzo/
Free to Grow CFO - https://freetogrowcfo.com/
Transcript
~~~~~~~~ intro is 41 sec
00:41 Introduction to Nicoblu and Peter Rizzo
03:09 Identifying Market Gaps in Fashion
05:57 Challenges of Growing a Fashion Brand
08:10 Inventory Management and Supply Chain Insights
11:06 Marketing Strategies for Apparel Brands
13:32 The Importance of Financial Planning
16:04 Navigating Cash Flow and Inventory Challenges
18:52 The Role of a CFO in Fashion Startups
21:20 Final Thoughts
Jon Blair (00:41)
Alright, today I'm joined by one of our beloved Peter Rizzo. He's the co-founder of a brand called NicoBlu Peter, welcome to the show,
Peter (00:51)
Thanks, Jon Thanks for having me. I'm excited. It's always great to catch up with you, and I'm looking forward to it.
Jon Blair (00:56)
So I wanna just dive right in here. Before we dive into a little bit about the brand story, can you tell everyone a little bit about who you are and kind of your background before starting or being a part of getting started with NicoBlu
Peter (01:09)
Yeah, sure. I'm a fashion through and through my whole career. Actually, I came from fashion businesses, small and big. So I was kind of born and raised under it from my my dad. And ⁓ and then I got into it never envisioned starting my own business, actually.
I worked in corporate for a long time in fashion, probably 20 we started NicoBlu and a little thing called COVID, through a wrench and everything. And my business partner and I, Katherine, put our heads together in the middle of COVID and we saw this big shift happening when all of sudden the stores were couldn't go to the department stores, but they still wanted to shop. And we started NicoBlu in 2020.
Jon Blair (01:34)
Yeah.
It's crazy how many brands that I talk to that started in and around COVID, I'll call it, right? And like the ones that, there were a lot of brands that got started that didn't really have legs to them. And as soon as the kind of like the kind of crazy stuff that was happening with e-commerce died out after COVID, a lot of those brands went away. But then there's a number of brands who like they had some strong fundamentals, something about what they were doing.
and they still exist to this day. I'm curious, like, going back to the beginning, what was, like, what is NicoBlu ? What problem are you solving or what customer base are you serving? And when was it that you saw, hey, we actually have something here?
Peter (02:31)
Yeah, know, it's interesting, funny you say that because there really has been a shift I mean, the fashion industry is always shifting. It's one of those businesses that's constantly morphing. But it really started shifting a lot in the last 20 years, you know, and people started really shopping online.
so what was happening is that there was this slow movement away from physical stores and physical retail happening all through the 2010s and 2015. And a lot of these big companies were making these big pushes to expand their ecomm businesses during that time period. COVID was just the final push that kind of pushed it over the ledge. And we kind of fell into a demand.
which we really didn't know was there. And what happened was, my business partner, Katherine, she had all these great ideas to design product that she was inspired for, and she couldn't find in the stores things that she was really interested in. she put them together and we started selling them. We started seeing this demand online from customers like her.
And then, know, all these customers, her age, you know, an older customer, primarily a woman that's, you know, 40 to 50 and up, who's kind of been like abandoned by department stores. Department stores started going younger. And so what happened all these customers, it's a demographic that's growing, you know, it's one of the fastest growing demographics in the U.S. It's that customer, 40 to 50, older, with a lot of disposable now the department store
Jon Blair (03:38)
for
Peter (03:54)
stopped serving her. And so we kind of fell into this demand gap. You know, we launched by ⁓ digital advertising on Facebook and Instagram, and that's where all these women were. And so we kind of fell into this demand gap and we realized how big the opportunity was when COVID, you know, when the stores started opening back up and our demand kept increasing, we kind of realized like, hey, we kind of found something here.
Jon Blair (03:58)
Mmm.
That's interesting. I find a lot actually that really great businesses in general, but definitely brands as well, get started by one of the founders, one or more of the founders like really understanding this gap in the marketplace. And so they're, they're, they really understand the problem that they are solving, the gap that they are filling. And there's also like a personal passion that gets tied to it, right?
that really drives things forward. And I've talked about before on other episodes of the show that like, the thing that I see time and time again, factor that I see withstand the test of time in the numerous brands that I've seen be successful in the e-comm world is that the founders have passion for what they're doing. And so like, they're just, they're gonna figure it out. And that takes...
that takes form in many different ways depending on the product category and the problem that you're solving. But it's really interesting that it's a part of the NicoBlu story, because I see that time and time again as a key factor brands that, you know, withstand the test of time and really push through and succeed. I'm curious, like, as you guys started to scale, what did you find were the most challenging aspects of growing the business?
Peter (05:32)
Yeah, well, we, you know, we still, we still encounter them every day, you know, fashion is, complex, uh, as you know, so, you you need constant newness and constant fashion, right? So you have to constantly be creating new products. It's not like you just launch three products, five products and like market them hard. You know, you have to constantly bring newness to bring, you know, customers back. so.
That part of it, even for big companies too, is really complex in fashion. It's like you gotta do that part. then there's complexities of the SKU dimensions and the sizing and fashion. And then on top of it, fashion, so it's a high return rate. You got customers that are sending a lot of things back.
Jon Blair (05:59)
Mm-hmm.
for sure.
Peter (06:14)
One of the biggest complexities always from the beginning was the cash flow management, quickly got really complex.
because it was like, right, well, we got a lot of money going out to the door to the vendors. We need more inventory. We got the demand is there, but it's like, are we going to have this cash in three months? You know, we kind of had no idea. It was kind of a black box. So that was, was, and still really is for us. The most challenging part is the cash management.
It's also very seasonal too. As you get these really big peaks in the front half of the year and then slower demand in the second half of the year. So it's like you really have to manage cash. And as a small business, over the last five, six years, obviously managing cash has been really hard for businesses that are digital only.
Jon Blair (06:40)
Yeah.
So you touched on a couple of things. It's interesting because now that we've had the benefit of working with a number of different brands in fashion and apparel, there's, you know, we work with different subcategories, you know, like there's a Gothic apparel brand that we work with. You guys are in more, would you call yours, is it resort wear? Or like.
Peter (07:15)
Yeah, it's
just resort slash, let's say more occasion wear.
Jon Blair (07:18)
Okay, okay. But in your seasonality, you have a big pop probably spring and summer when it's nice outside.
Peter (07:25)
Exactly. Yeah. Wedding season, party season, you know, and all that. So everybody like right now, this is our peak time right now. Like everybody is shop. Everybody needs a dress. and so they, you know, the way they work is they buy, you know, they buy five dresses from NicoBlu and then probably buy three dresses from somebody else and they're going to pick one. Right. So, ⁓ you want to be the one that they keep.
Jon Blair (07:43)
for sure. I'm smiling because
my wife has been at was just recently shopping for a family wedding that she's going to. And it was just like a revolving door of like, you know, stuff that she's buying online, coming in, trying it and sending stuff back. And so but what's interesting. So you touched on a couple of things that I want to drill into further that I want to make sure that everyone hears when you're playing the apparel game. A big component that I keep seeing for the
The growth playbook that I see time and time again is like roughly, I'll call it break even-ish on new customers, right? So very small to maybe zero profit on acquiring a new customer, but what you mentioned is like selling new styles, Like new products, new SKUs into your existing customer base. So all your margin comes effectively from returning customers. But what's the, I don't wanna call it the trap.
Well, it's like the driver, the driver of growth, launching new product is also a trap if you don't balance it properly, right? Which is that like your balance sheet can get out of control, right? And then you layer on top of that, like you mentioned seasonality, where you have these peaks and valleys of inventory accumulation. And furthermore, you have seasonal obsolescence if busy season and you have an overstocked inventory position.
I want to talk about the inventory planning process for you guys. What are some of the things, I think if I remember correctly, part of your background prior to NicoBlu is kind of in like supply chain operations, things of that nature. What have you learned about some of the do's and don'ts when it comes to supply chain management inventory planning for a brand like yours?
Peter (09:24)
it's hard. I mean, it's much harder than I thought. mean, it's harder than I thought, you know. I did a decent amount of like supply chain planning in my past.
Jon Blair (09:27)
For sure, it is hard.
Peter (09:34)
not necessarily inventory planning, but supply chain planning. you know, one of my expertise is always working with vendors and mills and factories. So you kind of reserve raw materials that you can buy back into and shorten your lead times, right? That's one of the big things. It's obviously making sure you have the right things at the right time. So that's the tricky part.
Yeah, so it's like you have to kind of platform raw materials so that you can replenish fast because the demand for that dress is only four or five months, right? So you got to get it back at the right time that you need to. But at the same time, your demand changes too. Your best-selling dress from last year is not your best-selling dress from this year because you have to, you got to launch new products. So maybe one of your new products is like kind of cannibalizing or advertising.
Jon Blair (10:07)
for sure.
Peter (10:21)
So it's tricky from that perspective. yeah, inventory planning is really about, you have to kind of just identify what your core business is because it's so you're always expanding new products and getting rid of and killing those old styles. Right. But then you have to have some core styles that
not only great sellers, but also like very strong for the brand. You know, there's another thing that we always felt really strong about is like we need a really strong brand identity. It's a lot of fashion brands out there and there's a lot of them that you don't remember, right? So we try to keep the branding really strong and there's a lot of styles that, hey, maybe they're not the best sellers. Maybe they don't have the biggest margin, but we feel like they're really important to the brand identity. So we keep them in stock. So that's another layer of complexity.
Jon Blair (10:42)
for sure.
Peter (11:06)
Yeah, it's tricky.
Jon Blair (11:07)
I mean, I'm gonna be, I don't wanna sugar coat this. Inventory planning is freaking hard. And I would say, in my opinion, apparel and fashion may be one of the hardest sub-verticals to do inventory planning in. And I'm curious to see if you agree, but some of the factors beyond what you have already mentioned that I think drive that complexity, like first and foremost, if you screw up
Right? It impacts marketing in many ways. Second, the variations, right? So like different sizes. So just the sheer SKU count. If you split out different sizes into like their own SKU, it's a high SKU count business, which makes it more, even more complicated to manage. like you mentioned, like the seasonality and like having, you basically have this compressed timeline.
of like your opportunity to effectively like on that purchase and get it sold at the right time of the year. I'm curious like what have you learned about the connection between the inventory planning and marketing and how those two are connected and interplay with one another?
Peter (12:14)
Yeah, mean, our marketing is, you know, we try to really push.
high class, luxury looking imagery. The ones that kind of jump off the page. go online, when you go on Facebook and Instagram, you're getting slammed with images everywhere, right? So you want people that they're gonna remember that jump off the page to them, that they're gonna stop on and scroll. So when it comes from marketing perspective, push new imagery pretty the marketing.
Jon Blair (12:28)
Yeah.
Peter (12:43)
because the new images are the ones that people stop on because they've never seen it before. The older images, some of the core products, now you still market them, but...
you know, maybe they might do better on like a Google or a different channel like that. you know, we spend a lot of our time select key new products every season, you know, and putting a lot of the budget spend between the new products, the images that we think are the strongest that are going to sell because, you know, there's a lot of images will sell other products. And that's kind of the thing in fashion. It's like you get somebody's attention on one product. don't necessarily buy that product, but they kind of say, oh,
this brand like I never heard an NicoBlu this looks beautiful and then you stuck them into the website right so it's kind of putting a lot of your ad spend and marketing spend into those key products to bring people in
Jon Blair (13:23)
for sure.
Peter (13:32)
You know, and then we had to build this. We build a larger fashion collection out, you know, and then and then we get customers that are coming back for all different styles and dresses, you know, fashion is tough because it's not like you can't have one style that's great for everybody. You know, it's it's diverse. get different body types, different ages, different different occasions. Right. So but imagery will bring people in and then you kind of bring them into your universe of like core products and you can
Jon Blair (13:32)
Yeah.
Totally.
Peter (13:59)
offer them a variety of different options that I can keep coming back for.
Jon Blair (14:03)
one thing that I think is really smart about that is again, like reiterating for everyone, the apparel game is about acquiring new customers at a smaller profit, right? And making up most of your margin dollars on returning customer, know, repeat purchase, brand loyalty, right? So if you're pushing, I always tell brands that I'm talking with that are considering working with Free to Grow if they're playing the apparel game, I'm like, look, your ad spend,
The primary function of your ad spend is to acquire new customers. Now, there's certainly some halo effect and it might get some people to repeat purchase, but it in large part, it should be measured as a new customer acquisition driver. And so I think it's really smart that you guys are looking for those kind of like, you know, scroll stopping images that are paired up with your ad spend to bring someone brand new into your kind of marketing ecosystem. Cause that's the whole point of ad spend in the apparel game.
I was thinking of something as you were talking that I come across time and time again with apparel brands, which is like, this honestly, like in many ways can make or break the profitability of an apparel brand because so much of your profit is driven by repeat customers buying new products, right? So new product inventory planning. It's freaking hard, man. It's even harder than like reordering for existing products. How do you think about
placing calculating orders for a brand new product.
Peter (15:28)
Yeah, it's hard. mean, you start to see the trends after a few years. You you can kind of tell when a style is going to be a hit. There's certain colors that do better than others. There's certain styles that do better than others.
But yeah, mean, naturally, you kind of have to go lighter demand planning for new styles because you don't know if it's going to be a hit or not. And that's really the, you know, that's the hardest part about fashion, you know. So you have to kind of use your supply chain planning in those scenarios, right? Because you don't know if something's going to be a hit. So you want to kind of reserve materials in the background without buying a full product.
Jon Blair (15:53)
Totally.
Peter (16:04)
And a lot of times you can also do is, you know, let's say a product that you thought was gonna be a hit is not, but you've reserved some fabric for it or some other materials, you can repurpose that too for a different style. You know, so you can kind of reserve fabric and then buy into it. You're kind of platforming and you know, hedging, leveraging, if you wanna call it on the new styles.
And then you have your core base styles that people keep coming back for, returning customers and new customers. And those now after three, four years, you start really getting a better idea about demand and those are much, much easier to actually put data against.
Jon Blair (16:38)
want everyone again to what Peter just walked through. my opinion, that's kind of like a pro tip. It's like, hey, look, don't overorder on new products, but here's some things that we're doing to kind hedge our bets in case we oversell. That pre-ordering fabric and kind of having a contingency plan is really, important. We used to do that in bikes, at Guardian Bikes. We would buy a bunch of the
key components for bikes that had the long lead times, right? The longest lead time components we would stock at the factory and we would prepay for them. And the assembly lead time is actually quite short, right? So if we were ahead of our forecast, we could just put in a PO for additional assembly. But if not, we could hold those parts and use them as our like regular demand, you know, was ready to consume them. So I love that pro tip. That's something super actionable for anyone listening that's in the apparel business.
I'm curious, like, I remember vividly some of our initial conversations when you were thinking about working with Free to Grow CFO, but like, what were some of the triggers on your end? What were some of the things that were going on that caused you to think like, hey, it might be time to bring in some more resources on the finance side of the business?
Peter (17:53)
Yeah, you know, we were buying, just to finish your thought from before, it's like, your suppliers are so critical to your success, at any company, obviously, like, they're a critical piece, but even more so when you're a startup, you know. were really lucky, and from my experience, I had brought in lot of suppliers that I worked with in the past.
who we still work with today and they're fantastic. And so, you know, we were ordering these really small quantities in the initial launch of the business. I mean, first off, we were a bootstrap company. We're still a bootstrap company. So we launched in COVID, we had no idea what the demand was gonna be. So we're buying really, really small quantities and our suppliers were, you know, really flexible with us to give us the small quantities. So...
You know, we launched and you know, probably with like 10 blouses few other items and you know, they sold out in like a week and we were out of inventory and we were like, So, you know, we ordered more and then, you know, back then we had to wait. So we had to wait to get more inventory. So we were selling things on pre-order.
like, all right, order another 50 pieces. Let's see what happens across a size range of 12 or 14 sizes. And you put those on pre-order and then those are gone. So now you're selling pre-orders on top of pre-orders and pre-orders. So you got how many open POs do you have? How much cash is owed? In the beginning terms, we didn't really have any terms with our suppliers. We do now. So yeah, they started becoming a real big complexity of cash going out the door.
and cash coming in the door. And we recognize that really quickly. I don't come from finance background, but I have some basic finance knowledge. But I realize it pretty quickly. like, is, we're one
one Excel mistake away from like blowing up, you know, the bank account. So I realized pretty quickly, I'm like, I need help on this. This is not my expertise. So we were actually, I'll be honest, we were probably lucky to go as long as we went without help doing it. So we realized it was really about, you know, the open orders to the vendors, the amount of money owed and the cash flow coming in. And it was pretty pretty simple.
Jon Blair (19:37)
Totally.
for sure.
Yeah, if I remember correctly, way that like we came in and, and correct me if I'm wrong, I, we came in, we did some work on the books first, right? That was key because we needed to see the books on an accrual basis, not a cash basis. Cause that was the key to show those liabilities, both to the customers, the liability to the customers of unfulfilled orders, and then the subsequent liabilities to the suppliers. But then after that, it's, it's about the financial modeling, the projections. And really strategically, this was about
Peter (20:07)
Mm-hmm.
Jon Blair (20:23)
getting you guys to the point where you don't have to chase inventory anymore, right? Or at least not as much, where you could actually build up inventory and lean into the growth marketing, lean into the ad spend, because you know that the supply is there, right? obviously that's gonna change the cash flow a ton, that we're now talking about placing bigger orders and holding more on the balance sheet potentially. I remember at Guardian during the crazy parts of COVID, we were super flush with cash because we were on pre-order, but why?
because the business is being funded by our customers pre-payments, right? But as soon as you flip the equation and you're actually having to fund the inventory yourself and collect payments from customers after the fact, the cash conversion cycle of the business changes like drastically. besides the books visibility, what have been some of the key like blind spots that like...
Peter (20:55)
Exactly.
Jon Blair (21:14)
The fractional CFOs from our team have been able to help you personally with as you're navigating growing the business.
Peter (21:20)
Yeah, there's a couple things. mean, you mentioned one of them before. the ROAS, the new customer ROAS, which we were always calculating ROAS and looking at our ROAS in the past, but the new customer ROAS was something that was really eye-opening for us. And just looking at that number, how it changes month to month versus our profitability in the bottom line, that was huge.
And then once you guys got us comfortable with the cash flow assuring us that we have enough cash on hand to make these size orders and buy more inventory and things like it was about the planning, the financial planning that we couldn't do before because we were too caught up in like...
worrying about if we're going to have enough cash on hand to plan anything. guys helped enormously do that.
Jon Blair (22:02)
for sure.
Peter (22:05)
And especially looking out to the second half of the year when demand dips down, obviously, naturally, your returns and all that kind of stuff are going to catch up with the business. Your cash is going to get crunched. But you need a financial plan of balancing your ad spend as well in those different times a year. mean, for us, we're different than a lot of businesses. Our peak time is now. It's not Black Friday. So Black Friday and Q4 is our slower time of year. So we actually don't ramp our ads.
Jon Blair (22:27)
for sure.
Peter (22:34)
spend that much in Q4, right? Sometimes we'll even decrease it a little bit or hold it flat. But naturally demand changes. So it was a matter of planning, you know, planning inventory buys, planning discounts and sales, you know, something that we never really planned for before. But obviously you have to do you have to go on sale and Q4. So so yeah, it was those plans that we we couldn't get out of the woods on previously.
Jon Blair (22:57)
My final question to you is like, I hear a lot from brands like, let's get a CFO in here, let's do a financial model. Tell me what I need to know and then like go away. Like I'll take it from here. But I always tell them like, hey, that's actually a huge trap. And I'm not saying that to sell our services. I'm telling you because this actually, what we're installing is a discipline. That's almost like saying I'm gonna work out really hard, like for a week.
know, like, and I'm gonna get really, really sore, and then I'm just gonna stop, and I'm not gonna work out anymore, but I'm gonna keep growing my muscles, right? But it's like, no, it's about a discipline that gets installed in your business, and it becomes part of the way that you run your business. And in fact, it's a discipline that you even get better at over time. The more that you do it, you as founders start to understand your business even better and how it works financially.
What would you say to a founder who's like, hey, I just need you to do this one time and then go away and I've got it from here?
Peter (23:52)
Yeah, mean, it's not, it's not, nothing is static in this business, in this industry, right? That's number one. It's like, it's not just a formula. You just plug it in every month and go away. Right? mean, things are changing every day. mean, you know, demand changes for whatever factors. You throw tariff situations in there, right? You throw,
So all these little things are constant really. And our plan could change for the year a couple of different times, right? During the spring season. So it's super complex, especially digital. It's so different from, if you have stores, maybe you have a more static demand in stores that you can understand. You're like, okay, we've been running this store for like 50 years. But digital now, mean, so many things are changing.
Jon Blair (24:25)
Totally.
Peter (24:38)
You've got new algorithms, you've got new channels, you've got new brands coming in every day that are targeting you, that are trying to undercut you. You've got crazy things going on in the world, whatever's going on, flavor of the day or the month. So it's so complex to not be doing it. I honestly don't think we'd successful as we are today without having partners to help us do it.
Jon Blair (24:50)
for sure.
Man, it's, almost getting, like honestly, I kinda like got goosebumps for a second there, cause I was just thinking back to like when we first started working together. And our business was more in its infancy back then, and we've grown a lot with you guys, and it's just been really, really fun, I gotta say, to work with brands like you guys, see what you and Katherine like have in your head in terms of your vision, and wanting to take it to the next level, and seeing how we can just,
support you guys a bit in getting to where you want to go. And we the partnership and we're looking forward to helping you guys in 2026 and beyond. Before we close up here, where can people find more information about NicoBlu ?
Peter (25:43)
simple, wear for...
for women of all ages, obviously, but we do have our core customer. We're based in New Canaan. We have our design studio in New Canaan, Connecticut. Our warehouse is here in Stanford. fulfill and manage all the operations ourselves out of Stanford and New Canaan. reach out to me. I'm happy to help. Jon, really appreciate you guys' It's been you're right. Fashion, I always think about it. I think fashion.
Fashion is the most complex, the hardest game out there. I don't even know, you could say digitally, but I think in any business model, like for you, it might be anything. I mean, you the complexity of like, you you're selling.
Jon Blair (26:17)
It might be in any visit, yeah.
Peter (26:23)
Occasion wear dresses, need to be fitted. They need to be tailored. They need to fit perfectly. You throw the sku complexity in there. You throw the trends out there and all these different factors. The supply chain complexities, it's pretty tough, but ⁓ you guys have been awesome. Appreciate it.
Jon Blair (26:38)
Yeah, man, well, thank you again for coming on the show, Peter. It's been a blast chatting, look forward to doing it again soon.
Peter (26:44)
You too, man. Thanks, Jon.
