Favorite Daughter co-founder Sara Foster reveals $150M in projected retail sales and profitable growth built on authenticity

trusted by millions to power generative media at scale. Our next guest is Sarah from Favorite Daughter. We might have to change hats. I have a favorite son hat here.

There she is.

Thank you for joining the stream.

Thank you for sending these beautiful hats. How are you doing?

Hi, guys. I got to I got to tell you, a lot of tech bros

Yes. text texting me up this morning being like, "This is so cool." I'm like, "That's crazy."

Well, our our wives our wives said the same thing. They're they they listen they listen to the podcast. They're fans. So, uh, everybody's excited. Yeah. We're super we're super excited to have you on.

I love it. Harley wrote me. He was like, you know, he's the he's the ecom king. So, when he asks, we show up. You know what I mean? We we show up.

Yes.

My co-founder is probably watching, by the way. My my other known is my my my little sister.

Little sister.

She's moving. So, she's not joining.

Moving on Black Friday.

Well, for the for the tech people that don't know, um can you introduce the brand? Can you introduce the uh I don't know yourself? How how do you actually think about yourself? Do you use the term slash?

I guess like we really give like a multi-hyphenate a run for its money. We were speaking at a Bloomberg conference the other day and they're like, "How what how do you actually describe yourself?" It's weird. You know, we talk about our business as an ecosystem. We have all these things that feed each other. The same girl or guy who's buying favorite daughter is listening to our podcast. She is probably following us on socials. She's listening to the pod. She, you know, Aaron created,

you know, a global phenomenon and nobody wants this on Netflix. So, we got that girl now. It's it all it all feeds each other the flywheel. And then and then from a product perspective specifically uh with with Favorite Daughter, how are you thinking about the shape of the business today? Where do you want to take it over the next few years? How how big are the ambitions?

I mean, look, we're growing fast. If you had have told me that that we'd be where we are right now, I mean, I said it at Bloomberg. I can say it now. We're going to do like 150 million in retail sales next year. We were profitable. We were

Whoa. Congratulations. [laughter]

I don't know. Is that tacky to give numbers? Whatever.

The people the people think we have a gong. [laughter]

Yeah.

The people want numbers.

We have the gong for numbers.

Yeah. Okay, that's cool. Um

Yeah. So So basically you're saying you made $150 million last year in your bank account. [laughter]

It's it's in my account right now as as we speak. No, I could have never, you know, I could have never imagined. Of course, I didn't even think that there was a customer for my sister and I. We were like, "We're not fashion girls. Who who want clothes from us?" I could have never fathommed that this is where we'd be sitting now. And it turns out the girl that's not the fashion girl, but that wants to feel chic and cool is our customer. She's us.

So, I think that's why you've seen probably a lot of, you know, influencer, celebrity brands, maybe not scaling as fast as we have, is because we are the girl. We're not wearing Dior out in the world, but then telling you to wear favorite daughter. We're wearing favorite daughter out the world.

Yeah. It's authentic.

Uh, talk talk about this year. We live in LA. Uh it's been, you know, it was obviously a super wild, stressful start to the year. You guys have had a store, right, in in the Palisades. Is that correct?

Uh and then moving in a few months later, you're dealing with uh tariffs. I mean, it's been uh really stressful year, but um how have you guys navigated

the tariff thing is the tariff thing is interesting. I mean, when it's it hit out of the blue, we were like, I'm sorry. and we kind of knew it was coming, but you don't really think it's gonna actually happen, you know. Um, and it really is us, the the the business paying these tariffs. So, we had to mitigate real fast. We're looking at, you know, India, we're looking at Turkey, we're looking to move from Mexico, but then it's it's it's changing in real time.

So, it's been a real challenge and I can't take credit for it. We have an unbelievable team.

Jennifer Stender Hawkins, who is like our president, she does everything. She's like, "The way that our team came together in that moment was was iconic." I mean, it was elite. It was elite the way that the team came together

and did what they did and and our profit, you know, our our EBA is looking a lot better today than it was about four months ago.

Um, what categories are you most excited about in the future? started out with an apparel focus, but I imagine you guys can in in the fullness of time do everything for for your customer or at least everything within reason.

Yeah. I mean, look, our our customer wants it all from us. She does. And we're learning that. You know, we didn't know everything's been sort of we didn't anticipate growing as fast as we did, and we didn't try to. We We started sort of testing like would she want to spend over $1,000 for Outwear? Would she? and we sort of dipped into it and and now we know she does. We just launched shoes.

Um a license with Callaris because our thing is like let's partner with the people who do it best. They do it best. Um accessories is huge for us. Obviously like logo it's a different girl. The girl buying the logo is not always buying the denim. And we always said the logo is going to pay for the women for the ready to wear.

Yeah. Yeah. Very cool. How are you thinking about uh AI uh specifically in in AI generated content? I feel like uh you're going to hear from uh fans directly if they are not cool with AI generated imagery and marketing materials. At the same time, sometimes people want to see how it looks on them and so they might want to see an AI image do something created equally. I feel like I feel like consumers are going to have a massive adversion to to AI generated ads specifically of clothing because if you buy something and then it fits terribly and you're like I've been like lied to but then at the same time AI tryon

has been pretty amazing.

I mean look the thing that we all talk about under the hood all of us is how to mitigate returns how to help returns that is that is something that we are talking about all day. So I will we will embrace the right AI in certain but like when it comes to ecom models. I don't know. I mean I think that's where it's going. Of course it is. We spend way too much money and too many days on ecom because we're perfectionists and we want it to look great.

But I'm not going to lie, it's expensive and it's timeconuming and if all of a sudden they're introducing ways to to change that. But I don't know what do you guys think the customer is going to we're we're nervous about it. I think that customers want will want to try on products and see how they look on themselves. I don't think customers are going to be thrilled to be like, "Oh, I'm looking I'm considering buying this item and it's completely Yeah. It's not it's not real."

Yeah. At at the same time, like the line of AI is getting very very blurry. There's a debate going on in the video game world right now because one of the biggest video game platforms, Steam, has a tag. Was this game made with AI? But the question is like what does that mean? If one of the software developers in the game used AI to write a little bit of code, that's very different than being like we went to the AI and said like make a video game or like the entire characters are AI generated. Like there's this huge continuum and I think there'll be something similar where it's like yeah if you're at a photo shoot and there's a light stand in the background and you want to remove it like you go into Photoshop today, you do contentaw aware fill in the future you do generative fill. you technically used AI. Does the consumer care about that? There's going to be this like back and forth around trust. And as long as you're not abusing the material or abusing the the the trust of the individual of the consumer, I think you'll be okay. But you have to be more open about it. And I think that's probably where you have an advantage because you have such a direct line with the consumer that you can wrestle with these publicly essentially and then set a very clear boundary as opposed to like some of the faceless corporations that will uh you know have to issue like PR releases when they make mistakes.

I know. Listen, it's so tempting, right? Because at the end of the day, your customers trust in you, your customers loyalty to you, it's all you have. So, we've we've before AI, we were like, should we start doing headless models, you know, because it speeds up that a lot of brands do it. Moda does it and they do beautiful um you know, everything they do. I'm like, I want it. I want it. So, we've wrestled with all the ways to of course

spend a little bit less, but at the it's tough. I mean, product obviously number one. At the end of the day, none of this matters if the product is not good. Yeah.

So, that is like first and foremost that is our focus. How can we do better? How can we source better fabrics? How can we do better quality? How can we do better fit? But when it comes, you know, to your question about the AI, it's like our customer doesn't always even want to see the clothes on me.

Yeah.

You know, we And that's the thing, like

of course, when I post something or when I push something, it sells, but it sells just as well on girls that work in our office who are different shapes, different sizes, different ages. And that's what we've really leaned into in the video. I mean, video is crushing for us.

Interesting. It is

like video on on the on the page. You're saying like on

video on the page and and in paid.

Yeah. Sure.

Yeah. All of it. I mean video is video is

crushing. Is that the marketing strategy that you think worked best for you in 2025 or is there another sort of growth initiative that as you look back on the year you're really really happy with how it panned out? Yeah, I mean I think it's a it's a combination of so many things, but I do think that we hit this sort of this wide openen white space for the working woman, you know, like the biggest compliment, the most that the people that come up to me the most are are career women. They're women who go, "Oh my gosh, my whole law firm, all we wear is Favorite Daughter." because we're offering you chic, elevated, tailored suiting, good quality, but that's not, you know, $1,500.

You don't have to spend $1,500 on a blazer to look great, to show up to work feeling like you look fashionable, like you belong, like you feel good. You don't have to spend that.

Yeah.

Yep.

Uh, how do how do you think about working with influencers? I feel like you're probably extra sensitive to this given that you guys are creators and personalities yourself and you're probably like, you know, that like you guys represent the brand. So, if you're working with another creator, they're representing the brand. And I feel like in apparel, it can be way more sensitive than a supplement brand that just says like, "Hey, if you like share our values at all, like we'll we'll work with you."

Yeah. I mean, you know, we've we've really leaned into ShopMai, which is a fantastic company, which I actually looked at as an investment, which I big mistake on my part. Um, from October,

I I uh I was talking with my wife and she was telling me about ShopMai and I was like I I I haven't I was like, I haven't heard of it. And we we've interviewed a thousand companies this year and and I looked it up and I was like, oh, this is interesting. And then the next week they announced like a I think a billion dollar round. Uh, so it wasn't wasn't on my radar, but uh uh they're ripping.

It's genius and it's like it's made the whole process so much more seamless to be honest with you. And it gives you know moms at home an opportunity to move product to make a little cash to build some sort of a audience. I mean, the celebrities with millions and millions and millions of fans have or followers have not sold as much for us as like a Dallas mom

who has like the micro influencer.

Yeah.

Interesting.

Very cool. Uh, how much are you like how much time are you spending on the investing side? And you guys have a fund that you run. What what's kind of the focus of the fund and and what kind of companies are you really looking to meet?

Yeah, I mean we're a consumer focused fund. and it's me, my sister Aaron, and Phil Schwarz is our partner. It's it's kind of a different kind of model. Um, he Well, I could go into the weeds, but we probably don't have time. Um, we're looking at companies that we are the customer for. That's it. It's very simple. That's the thesis. It's not only female founders or only, you know, female. It's that's not what it is. It's are we the customer? Can is our audience going to resonate with this product? And it's that simple. Yeah, taste

smart makes sense.

Uh, very cool. Well, thank you so much for joining on on such a busy day. Uh, really really fun to have you on. We'll have to have Aaron on uh sometime soon. And uh congrats to the whole team on on all the progress. It's incredibly impressive.

We'll talk to you soon.

And congrats to you guys. Congrats. Everybody loves your show.

We're having a lot of fun. Cheers. Bye

bye. [applause]

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