Kate Maloney

CEO Costume Craze

by Brad Plothow

Kate Maloney remembers when her company consisted of eight people operating out of her home. The living room became office space. Room was cleared wherever possible to make way for regular shipments of costumes — boxes and boxes of costumes.

That was in the early 2000s, when Maloney was still a teenager and Costume Craze was a startup with annual revenues of $17,000. After a few years, revenues jumped to roughly $700,000, and Maloney moved all those boxes into more than 20,000 square feet of warehouse space in Lindon. This year, Costume Craze found a new home in a nearly 60,000-square-foot warehouse in Pleasant Grove.

Today, the 26-year-old Maloney is chief executive for a company with a unique business cycle. Costume Craze’s peak season is August through October, when the 35-employee company balloons to 250 permanent and temporary workers to fill orders for Halloween. The seasonal spike provides most of the company’s annual revenue — “The rest of the year, we’re kind of skating by,” Maloney says — but the model has worked.

“We know that Halloween will come every year,” Maloney says.

It helps that Costume Craze has a broad consumer base. Maloney estimates that less than 5 percent of her company’s orders come from Utah. Costume Craze has no retail location — all orders are taken at CostumeCraze.com and shipped from the Utah County warehouse.

Serendipity spawned that model. Kate’s brother, Matt Maloney, started the company by selling monk robes to showcase a homespun software initiative. Kate had recently graduated from BYU with a degree in business administration and was working as an office manager at a doctor’s office when she decided to purchase a stake in the business for $2,500. With Kate on board, the company expanded the product line to include a broad swath of costumes.

Over the next few years, she had the unique opportunity to apply what she learned in college and fill in the holes that they don’t teach in class. What paperwork do you need to hire employees? How do you do payroll and benefits? Where do you send sales tax on orders?

Call it an organic MBA.

Business acumen:

1. Customer service: Don’t skimp on quality control.
2. Empowerment: Give employees specific responsibilities and make them accountable.
3. Retention: Maloney keeps employees happy and productive through 100-percent insurance benefits for employees and family, as well as company activities and scheduling leniency.