1227: Scaling an Apparel Brand: The CFO's Capital Allocation Challenge | with Neely Rosen, CFO, Greyson Clothiers

0:00Support for CFO Thought Leader comes from OneStream, Trusted Data, Faster Decisions, and Salesforce. Explore new research on the future of finance and AI at Salesforce.com slash CFO report.

0:17Neely Rosen: This is episode 1227.

0:26Neely Rosen: A lot of the way AI is changing how my staff is going to work is, can they ask good questions? Prompting has suddenly become a major skill. So it's not, show me the cash flow for 13 weeks and what my forecast looks like. It's, what's the insight? What's the cash flow telling me? Why does it matter? And the team that can help feed me those things in anticipation helps me be a better leader to the business because it's going to be about anticipating and driving change at an accelerated rate. And I think that's what AI is going to really drive for us. Hi, it's Jack. On today's show, we speak with Neely Rosen, CFO of Grayson Clothairs.

1:18There's an interesting dilemma facing CFOs at growing companies. You can see the opportunity ahead. You know where the business wants to go, but the investments required to get there often come long before the financial returns. New stores need leases. New products require development. and the people and systems needed to support growth can't always wait for revenue to catch up. So how does a CFO decide when to invest and when to hold back? Our guest today, Neely Rosen, is confronting that question at Grace and Clothers, and her perspective reminds us that the capital allocation isn't simply about numbers.

2:05It's about timing, judgment, and knowing the business. Our talk with CFO Nailey Rosen begins after this.

2:19AI is changing the finance function, but how much business value is it actually delivering? According to new research from Salesforce, 90 % of finance leaders using AI report a positive return on investment. And as AI agents enter the picture, finance leaders are seeing opportunities to improve productivity, reduce costs, and strengthen forecasting. But there's another side to the story. CFOs are also confronting growing revenue complexity with more subscription, consumption-based, and hybrid business models to manage. And that raises an important question. How can finance leaders gain the visibility they need to make better decisions while putting AI to work?

3:09Salesforce explores these challenges and the opportunities ahead in its latest CFO research. Discover what finance leaders are saying about AI, revenue complexity, and the evolving CFO role. Visit salesforce.com slash CFO report. That's salesforce.com slash CFO report.

3:36Hello, CFO Neely Rosen is with us. Neely's career has taken her from public accounting at Grant Thornton to brand finance and internal audit at Campbell Soup and later to Urban Outfitters, where she led a major financial system transformation. She went on to serve as CFO of the Greater Philadelphia YMCA before joining Grace and Clothiers, where clothing. We're catching up with Neely here at Sweet World to explore her career journey and discover how she's helping guide the growth of an evolving apparel business. Neely, welcome.

4:17Neely Rosen: Thank you, Jack. Really great to be with you today. I want to go back to what I just mentioned there. You moved from audit into brand finance at Campbell. And what first changed how you saw the business? Yeah, absolutely. So that was the probably most significant and early point in my career change. I was very fortunate. Campbell's Soup being as large as it is, and you mentioned that, they had a really great leadership development program, and they invested a lot in their employees, and they believed in a career lattice. And so they helped us navigate not just vertical opportunities, but out across or horizontal and diagonal as well.

5:01Neely Rosen: And so I was paired with some really great mentors, Bob Schiffner, the then CFO, Doug Conant, the then CEO, and Doreen Wright, then CIO. And Doreen, particularly as a female tech leader, was really inspirational in helping me understand what to learn in business to become more successful. And she was a tech leader. That's interesting. So earlier, you had much exposure to tech. only as an end user, really. I hadn't really thought about it as enablement or empowering a business or even like creating. I was really just the end user and it was the way I facilitated my job. I mentioned that because I think I mentioned this in the intro as well.

5:53You were challenged with a major transformation at Urban Outfitters, which was financial systems. Seems like a large technology component there as well. So you're getting this finance technology intersection to it right away.

6:12Neely Rosen: Yeah, I think I've been really fortunate in my career to have come into accounting and finance at a time of transformation in and of itself. In fact, I was just here at Sweet World and was part of the executive summit. We were having a little roundtable. My core business partner today is a CIO or the tech team. There's really no way that the financials today and everything that runs through them isn't understood at the CFO level with some integration to technology. And Doreen Wright was really pivotal in that learning for me. Campbell's was going through an SAP implementation. So while I was in brand finance, I had to really understand how reports were being built, what master data meant, how things were mapped and put together.

7:01Neely Rosen: Really, the process part of my life from audit became more real, not just auditing a process, but actually building a process. So tell us something about it. Was it team building? What did she get as a leader? Doreen, what was she about? Doreen encouraged me to go get my MBA, to stay very up to date on industry trends, not just focus on my sector, but look more broadly. It does sound pretty basic, right, at the end of the day. But yeah, a couple articles in the morning might prompt your thought or hear what's coming. And part of executive leadership is being that strategic visionary, the hope that you've created some bandwidth in your day so you can get ahead of the curve.

7:45Neely Rosen: And I think she did that really well. And so she inspired and nurtured that, similar with Bob and Doug. And they formed a lot of my early opinions of what type of executive leader I wanted to be. You moved from a major nonprofit to a growing apparel brand. What made that leap appealing to you? Yeah, so pretty unconventional career, right? Audit and then less accounting controller path, more into brand finance, project management. You mentioned Urban Outfitters. Dick Hain, the then CEO, took a chance on me to lead the Oracle EBS implementation and we formed a PMO. And I think he knew I was good at kind of herding cats.

8:34Neely Rosen: And I enjoyed it because I'm curious and I love learning. And so pulling people together to build something was really inspiring. And Urban is really entrepreneurial. How that led to the YMCA, a little bit, you know, a little bit different kind of path, but a chance to take a stab at the CFO role. one of the largest whys in the country. At the time, I was a young mom, two kids, felt giving back to community was really important, loved the athletic aspect of the YMCA and the idea of being part of my local community. And when they reached out with the opportunity, it was sort of too good to pass up.

9:17Neely Rosen: And leaving urban was hard, but going to the YMCA was really exciting and a chance to put business skills, regardless of industry, into practice. How has your approach to leading people changed since becoming a CFO? It's a really great question. Having seen a couple of different CFOs in different sized organizations, I really learned to look at the person. And I think leading with a very servant leadership style. That came through my time at the Y. I think leading with an idea of expertise and always looking for something better, but also knowing that every conversation you have can spark a new thought, can bring value, can encourage something different.

10:08Neely Rosen: And so I've always tried to lead with engaging people. I think we build kind of a prettier quilt when you put together everybody's differences. And so my journey through different industries, I think, has allowed me to value that natural path of conversation. For listeners new to Grayson, tell us about this business today and the opportunity you're pursuing. Grayson's so exciting. I mean, it is at the intersection of so many things I love, apparel, sports retail entrepreneurship and we talked about ourselves as a pack and my journey from the why community that unity of sports engagement is really important and at Grayson we deliver on that both in terms of our employees the way we interact with our pack members or our customers and how we're looking to build the company.

11:08Neely Rosen: Stores in local areas really are community first. We call them our dens. We want people to come in and be part of the business and engage with us. It's so exciting. Our founder, when I first met Charlie Schaefer, he had come from Ralph Lauren, and he had shared this vision of luxury and premium apparel. and he had talked about if Nike and Ralph Lauren had a baby, that was what he was creating. And we were really on the cutting edge of performance and lifestyle apparel. So you're not just dressed from the golf course. You really can dress across the golf course, at the office, travel apparel, the fabrics.

11:52Neely Rosen: It's been a really exciting journey. And now I get to build the infrastructure. Sure. As Grayson grows, where have you had to make the biggest investment decisions? Capital allocation is, I think, one of the hardest parts of CFO jobs in growing, scaling organizations. opening new stores. You know, often the investment precedes the return on your investment. The revenue sometimes takes a while to catch up on new store openings. Is that something you're involved with, like leasing or leases and all of that? Yeah, we work together cross-functionally. I'll review the legal documentation or the lease agreements.

12:40Neely Rosen: I'll work with our retail leadership or our head of sales. You know, I'm not selecting a site, but I do get to sometimes tour and see what foot traffic looks like. They are strategic conversations we have. Sometimes it's, you know, being at the forefront of something. So our CEO, very visionary, you know, really proud of our roots in Detroit. Some people may not have gambled on opening a store in Detroit. Our flagship on Woodward Avenue is, you know, one of our best-selling stores, and it tells a lot about our story. Help us understand Grayson's revenue model. Which matters most today, customer growth, sales channels, or product mix?

13:28Neely Rosen: It's a great question, and dare I sound somewhat, you know, non-answerish and that they all matter. But, you know, our business is wholesale first. That's our roots. It's very important to our business. We have an amazing sales team out in front of our pack, driving growth. We have an e-com business and direct-to-consumer business. It's really important. And we're constantly learning to be innovating our website, how we show up, how we target market, how we look for new customers, and then retail, which was sort of the later sales channel to develop, but one of the most exciting and, like I said, one of the best ways we can interact with our pack.

14:17In apparel, we know inventory decisions can shape financial results months later. what early signals matter most at Grayson?

14:29Neely Rosen: Yeah, as a CFO, right, inventory feels like cash on a hanger, right? And I think we look at pretty standard KPIs of, you know, term, you know, lead time, cash flow, days sales outstanding, days payable to your supply chain. It's the harmonization of all of that. Sometimes you could have days sales firing and your payables are delayed or you have slowing down payables because you're on wholesale terms. I think it's really working with the channels in the business and understanding their model and being able to understand the lever so that you have the ability to adjust one, adjust some, and educate your team about why they're all important and how their job affects the overall cash flow.

15:22Neely Rosen: of the organization. We were always trying to understand how finance and operations work together. We're wondering, can you walk us through maybe a recent decision where financial insight changed an operation, operating plan, an operational component? Yeah, I mean, I think probably the hottest topic, at least in apparel in the past 18, 24 months has been the changing supply chain and tariff impacts, you know, across the industry. And it helped build a really close bridge between the operators in my company, you know, my supply chain leader, my head of production, everything from vendor terms. Can we have conversations?

16:18Neely Rosen: Can we negotiate it? Can we find harmonization? Because they're impacted by the tariffs as well. To, you know, how do we want to look at shipping, air freight? how do we want to look at you know customs and and border and and free trade zones and shipping drop shipping and suddenly everything has a number in it right so so as CFO you often find out about these things but the closer you can get to partnering with the business to listening to having the conversation to asking curious questions I think that partnership between finance and planning and operations and merchandising and production becomes true cash value.

17:06Neely Rosen: It really does because you start to really understand the business and the leverage. And I talk a lot to my staff about making traction with your peers. And I think that's key to most businesses, the conversation throughout the day. Curious about your thoughts now. Looking back, you led a major ERP transformation at Urban, as you described for us. We're wondering how that experience has shaped your approach at Grayson. And it's interesting to be here, hearing about ERP, sort of an era coming to an end. I don't know if you look at it that way. No, that's an interesting way to say it. Technology moves fast.

17:52Neely Rosen: And, you know, being here at Sweet World, you know, Evan's keynote was very AI forward. Things are going to change at a pace that is going to be incredibly dynamic. and the ability to be agile is going to become so important. And I think what I love about my development path is I think sports have served me well. You have to learn to read the field. You have to anticipate the play. And I think that allows me to be open to what's coming and then try and adapt and coach my team through it, be a little bit of that, you know, visionary and drive some thoughtfulness as to how can we approach something.

18:44Neely Rosen: A lot of the way AI is changing how my staff is going to work is, can they ask good questions? Prompting has suddenly become a major skill. So it's not show me the cash flow for 13 weeks and what my forecast looks like. It's what's the insight? What's the cash flow telling me? Why does it matter? And the team that can help feed me those things in anticipation helps me be a better leader to the business because it's going to be about anticipating and driving change at an accelerated rate. And I think that's what AI is going to really drive for us. what's proving hardest as gracing grows and i can give you a list and you're going to say they're all hard but inventory visibility forecasting demand or keeping operations connected i think visibility is actually getting better um forecasting demand um we're all aiming for more and more accuracy and that's getting harder But with these MCPs and the ability to connect to multiple data sources, I think that's going to be a really interesting evolving space in terms of level of precision and accuracy.

20:03Neely Rosen: And I think that's where finance has value, right? In my life, being both the accountant and the financier, accounting is often looking back, sort of point in time. But the power of that financier who can really look ahead, that's going to be sort of exponentially valuable. And it's going to accelerate at a clip I'm not sure I even understand yet. But I think that's what's going to be challenging and interesting at the same time. But I think what you didn't ask in there that might be the hardest is, you know, people, people, process and technology and the harmonization of all three of those change management, governance, learning and development training.

20:48Neely Rosen: I think as CFO, I have to think about all of those things because I need my people to be so well-rounded because then their work product is better. How are you? You know, it's interesting. Looking the way you came up as sort of, and I would say you were probably a problem solver inside the ERP transformation, someone who could see the potential snags that could happen. And that skill might not be as valuable anymore only because AI is going to, we're led to believe, solve a lot of these issues. And as you said, your team, you're asking to come up with the right questions and the right prompts.

21:26Where are those skills developed? And it seems like you're pointing your team in that direction.

21:31Neely Rosen: That's a really great question. At companies like Oracle or in my past at like a Campbell's Soup that was really big, they have massive HR departments and even tech departments, and they're probably investing a lot in L &D software and things like that. At smaller entrepreneurial companies, Grayson's just over 230 people right now. some of it's going to depend on who you are and how you want to learn. And then some of it's going to depend on managers, directors, leaders who are able to say, man, I see something in this person. Like there's a spark. They're curious. We talk a lot about hustle in our culture, right?

22:15Neely Rosen: Someone who wants to learn is really high value. And we may not even be able to find all the paths today, but it's amazing what a library card and AI can do for you. And so, you know, how do we inspire that learning? And then how do we create like an ideatorium? How do we get the team together every six weeks? How do we allow people to come to the room willing to put the dart on the board, willing to throw the idea up, no bad questions? I think that's the accelerant that I'm looking to inspire in my team and working to create that as a culture. And we do that through things called task forces at Grayson.

22:54Neely Rosen: And we build little committees where people can start coming together and brainstorming and look to drive our strategy. If you were looking to add a senior hire to your team today versus five years ago, what's the difference? And again, we know that, but that person sitting across from me, what's exciting you about hiring them today? At the senior level, experience matters. Intuition, the ability to ask questions, the ability to engage across a business, not just within your own expert vertical, the ability to deal with problems. So, you know, in my career, did I ever know that I would be dealing with COVID and complete business shutdown when I was at the Y?

23:46Right.

23:46Neely Rosen: But there was a certain element of me and my leadership team, right, that came together. We were there for each other. High trust. Right. And you navigate crisis often for the first time with people, not because you've done it before. And so I think some of those skills that you cultivate in your career, that's what you're bringing as a senior leader. And that's what I look for. Well, thank you for those. Great insights for us. We are up to what we like to refer to as our finance strategic moment. And again, this might have happened any time during the course of your career. But we're just looking for one moment of insight that you'd care to share with us.

24:29Neely Rosen: Yeah, I think we had the very exciting opportunity at the end of 2024 to go through a capital raise. And I think that due diligence exercise taught a lot about the business, how we want to work and grow, where we're headed. And then, as I mentioned at the start, capital allocation, right? So how can I partner with the CEO to drive growth, drive return for our investors, deliver bottom line profit? And when is the right time for that profit to show up in the business? When are you scaling the infrastructure, stores before the revenue come? When are you building brand value? Maybe you're investing in products, fabrics, trademarks on collars.

25:17Neely Rosen: Or you're investing in people. But the return on those investments might be two years out, three years out. So I think for me, that's the most strategic problem and I'm still living it. Right. Every day as we evaluate the business, as we grow, as we break$100 million, you know, revenue points, as we build the infrastructure and change to systems, capital allocation is the most strategic financial problem. And how I navigate it with my peers becomes incredibly important.

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26:43The result? Faster decisions, less busy work, stronger governance, and more value from AI. Explore the Forward Finance Blueprint at onestream.com forwardfinance. And see how to turn AI ambition into real business value. Visit us at onestream.com forwardfinance. finance. That's onestream.com slash forward finance. We're going to ask you to look back again. You mentioned an MBA in passing. I thought it'd be interesting. Would you have taken it? Would you have gone back for an MBA sooner or later? You know, how did it work out for you? Did you go while you were working?

27:34Neely Rosen: I did a working. Yeah, I did Drexel University's College of Business. I did their executive MBA program. And it was while I was working. One of my mentors encouraged it. And I think it was the right time. I was still young enough. I was single at the time and not distracted. And I was putting my long work days in. But I was hungry and curious and could pull the late nights and do the studying and make the investment to get everything out of it. So I think my mentor prompted the right time and it worked out for me really well. I'm a perpetual student. I love learning. I'm ready to go for my doctorate at some point.

28:26Neely Rosen: I just completed a certificate course at MIT on, you know, executive playbooks for rolling out a Genic AI at an organization. I think, I think, so practical. You know, this was a short certificate course, but, you know, the value add is, is challenging your thinking, showing you something you don't know, maybe something I wouldn't have read on the weekend while I'm having my coffee, you know, and I think it's, it's really important to kind of always as an executive, spark that learning, find new sources, get curious. AI to me, like my audit had as a governance, like to tie it to golf. I was once taking a golf lesson.

29:09Neely Rosen: I'm new to golf, not a great golfer, but incredibly inspired to constantly learn. And, you know, when I was taking sort of those early lessons on just grip, how to hold the club, you know, one of my instructors said, it's like holding a baby bird. If you grip it too tight, you're going to crush the bird. And if you grip it too loose, the bird's going to fly away. And the reality for me as an executive leader is like, how do I inspire AI adoption with the right governance? And governance is that grip. How do I bring the right grip to the org so we're responsible, we're thoughtful, but at the same time, the team can swing for the green, right?

29:52Neely Rosen: They've got to go for it. We've got to learn. We've got to really, you know, try. And it's a new unchartered space. So, you know, I often take sort of sports and put that into my life. And that's why I was saying, like, Grayson just is, it's home. It's the perfect fit for me. Yeah. You know, it's, we always, at this point, we usually ask for the guests to reflect a little on the personal side for us. I'm wondering where this sports first came into your life. Was it part of your upbringing? I would make a wild guess. Spot on. So Only Girl and an under 10 boys soccer team was my first foray into sort of community sports.

30:33And it's stuck.

30:35Neely Rosen: I love, you know, I wish business could translate a little more to a very defined 45 minutes and a goal. Right. It doesn't it's not always that clear. But there's something very inspiring about setting a goal, working together to achieve it. And honestly, like sports just teaches you to deal with failure, teaches you to deal with change, change you can't always control, right? Getting up, doing your best the next day, working together as a group, having a common outline and a common path and a common target. And I think it just really served me well in business all the way through to the boardroom.

31:15We always like to ask for whether there's a book that's influenced your thinking or a resource that you can recommend that you have come to rely on. And if you'd rather, we'll even accept a book that you escape with and has nothing to do with anything.

31:35Neely Rosen: No, I tend not to be the reader of Escape. um i'd say there's two in the past five years that i feel like have had a pretty big impact and and they're really different um one is the energy bus um i think as i became more executive in my career um time is really precious as a working mom um as a leader caring about my team where does that return on energy go and how do i inspire people and the second is traction which is a an entrepreneurial operating system and I think for for me that that book is practical tips and things that you can actually like read go back to pick up apply and and that's what's been really important to me everything from meeting agendas to goal setting to thinking about your team like right person right seat do they get it Do they have it?

32:39Neely Rosen: Do they want it? Right. I think that book had a lot of really practical tips for me that just met me at the right time in my career. Great, great selections. We haven't had them before, so all the more valuable for us. Thank you. We are up to our final question, Neal. I can't believe we've arrived here, but let's look forward together. For the coming 12 months, what are your CFO priorities? Well, really excited to say Grayson's going to launch Footwear. And that'll be a new, really new intentional product category for we've done a lot of collaborations with some great companies in the past. But going out with our own brand of Footwear is really exciting.

33:19Neely Rosen: expanding retail and really now having come off of our NetSuite implementation is grounding ourselves in infrastructure taking what the team learned about people process and technology the SOPs and moving away from an infrastructure internal focused investment year to focus on the customer focus on our pack deliver revenue growth and bottom line profitability and I think if we as a leadership team can coach our staff through that, we win on all kinds of fronts. And that is really inspiring and exciting. Nealey Rosen, thank you for joining us on CFO Thought Leader. Thank you, Jack. This was really fun.

34:03Neely Rosen: Appreciate the time and the conversation.

34:18Hello, everyone. Jack here. Hope you've been enjoying our recent episodes of CFO Thought Leader. Please know that I don't take for granted this opportunity to serve you. Your time is valuable, and of course, so is the time of our CFO guests. I'll admit to you on certain weeks, I will pinch myself and say, hey, I get to do this for a living. I speak to all these impressive leaders. Undoubtedly, there are more aggressive interviewers out there, some who leave no stone unturned. But our swim lane is for finance leaders only. And those finance leaders have a unique style of leadership. one that is rooted in the burden of trust.

35:05In light of this, finance leaders must take great care not to forfeit this trust as they step into the role of being a more expressive leader. And that is what CFO Thought Leader is really about. That's why I try to remind myself, week in, week out, how fortunate I am. Still, I need your help. Tell us what we're doing right. Tell us what we're doing wrong. Email me your comments at jack at cfothoughtleader.com. And please visit cfothoughtleader.com. You'll find a listener survey right on the nav bar. As always, thank you for listening.