New Yorker's clothing store brought in $120,000/year before it had to close during Covid: Here's how she bounced back

"Even if I'm just scraping by, it would still be worth it, in that New York is on its way back."

Kate Goldwater and her family.
Courtesy Kate Goldwater

Kate Goldwater had always wanted to go into fashion. But after attending New York University in the early 2000s, "I felt kind of cheated by New York," she says. "I [was] so excited to be in the best city in the world for shopping, but I couldn't really afford anything."  

Those high prices, alongside the fashion industry's poor environmental record, convinced her to open her own East Village clothing store, AuH20 (named for the symbols for gold and water on the periodic table). When the store first opened in 2006, it sold sustainable clothes sewn from recycled materials. Later, it became a secondhand and vintage store, with items affordably priced from $5-$30. By 2019, Goldwater was bringing in more than $120,000 annually in credit card sales alone.  

Like many other small businesses, AuH20 was forced to close during the pandemic, and Goldwater had to figure out a way to move the store online. Thanks to her digital pivot, she was able to bring in more than $40,000 in credit card sales during 2020. That helped AuH20 survive, and the physical storefront ultimately reopened last month.

Returning to the store for the first time, "all I could think was: This was mine," she says. "I want this to be mine again."

Here's how Goldwater kept her store going during the pandemic, and how she was able to reopen.

Instagram was 'a way to be open'

Kate Goldwater at AuH20's original location.
Courtesy Kate Goldwater

Before the pandemic, Goldwater had been selling clothes on AuH20's Instagram account. "I had an employee that was doing our Instagram store, and then when the world shut down in March, she kept that up," she says. To cut costs, Goldwater eventually took over Instagram duties herself, focusing most of her sales efforts on the social media account.

In addition to items from her store, Goldwater also began selling other people's secondhand clothing on consignment. "People would send me [photos of their] items that I would post," she says. If an item sold, the two would split the profit 50/50.

Goldwater tried other online platforms, opening Etsy and Depop stores as well. Though she made sales on all three, Instagram was most successful. "Instagram [sales] can be so instant," she says. "People are already on Instagram scrolling and thrifting." Concentrating her efforts on the app also boosted her bottom line: While Etsy and Depop take a cut of her sales, Instagram doesn't.

Selling 'mask outfits'

Despite expanding her online activities, Goldwater was still making fewer sales than she used to, especially at her traditional low prices. In an effort to make more per sale, she took up sewing again. When she found maxi dresses to resell, she'd sometimes cut them shorter, making matching masks from the extra fabric. The resulting "mask outfits" would sell for $30-$40 each.

Alongside Instagram sales and consignment, the "mask outfits" helped AuH20 make about $40,000 worth of credit card sales in 2020.

Hosting a pop-up shop

At the onset of the pandemic, Goldwater wasn't planning to give up her brick-and-mortar store. She closed it during the spring lockdown, then reopened over the summer, only to discover it was "hard to make money at the storefront itself" with fewer city-dwellers venturing out to shop. In October 2020, she closed the physical store altogether, deciding to focus on online sales. She, her husband, and their two daughters moved from New Jersey to Virginia, where she weighed buying a camper to do pop-up shops throughout the country.

Then in April, with more people getting vaccinated, Goldwater had an idea: hosting a pop-up shop in her old space, where she had built up a strong local community of customers. She reached out to her former landlord to see if she could host an event on a Friday and Saturday in May.

The space hadn't yet been leased to a new tenant, and the former landlord agreed. By the end of the weekend, she'd brought in a few thousand dollars worth of sales — enough to justify reopening the storefront.

Inside AuH20.
Courtesy Kate Goldwater

"The amount of foot traffic that we had, the amount of regulars that came in, the amount of employees that stopped in and said, 'We've been scheming how we can get you to come back,'" she says. "We just decided that we were going to reopen."

As Goldwater figures out how to manage her business from afar, AuH20 will only be open Fridays, Saturdays, and Sundays. Eventually, she'd like to be open full time again.

"Even if I'm just scraping by, it would still be worth it, in that New York is on its way back. Even if it does take a long time to get [back] up to more than $160,000 in sales, that's OK."

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