Lemonis my name is marcus lemonis, and i risk my own money to save struggling businesses. Were not gonna wake up every morning wondering if we have a job. Were gonna wake up every morning wondering how many jobs we have to do. Its not always pretty. Everythings gonna change everything. But i do it to save jobs, and i do it to make money. This. Lets go to work. Is the profit. Katelyn hi, ladies, welcome in. Lady customer return. Tasha yeah. Lemonis lady fuller got the idea for a barthemed jeans store while still in school and then made it a reality. Lady we are obviously a bar of jeans. You walk up and kind of order a jean like youd order a cocktail or coffee. Lemonis the concept was a hit, prompting her to open up 12 more stores in just a few short years. But the denim game is incredibly competitive, and ladys aggressive expansion plus her retail inexperience created some serious problems. Lady these are superdirty. Thats disgusting. How the. Did it get like this . Lemonis blue jeans are part of almost everybodys wardrobe. Man is this all girls . Lady no, we do have mens jeans. Lemonis and i believe in ladys concept a specialty boutique for blue jeans. With tweaks and some refinement, i believe we can raise the bar and turn this into a national brand. Im in San Francisco to visit the flagship store. Its on a great block with tons of cars and foot traffic, and im liking the Energy Around here. Hi, there. Lady hi, how are you . Im lady. Lemonis im marcus. How are you . Lady its nice to meet you. Lemonis how are you . Amy hi, im amy. Lemonis amy. How are you . Lady im so glad youre wearing jeans. Lemonis you didnt think i would come to a jean bar with jeans . Lady belly up. Lemonis so, whats belly up mean . Lady our slogan is, you belly up to the bar, and well cover your ass. When someone walks in, we always say, belly up to the bar, and well help you. So you basically tell the jean tenders, these lovely folks, how you like your jeans to fit. Amy so you tell me straight cut, bootcut, relaxed, darker or lighter, and then what size you think you are, and i can help guide you to, like, the bestfitting jean. Lady the basic premise of the store is that you cant, you know, touch the jeans without us. Lemonis do they actually say to the people, you cant touch the jeans without us . Lady yeah. Amy mmhmm. Lady they cant walk behind the bar. Lemonis okay. Amy hi, ladies. Welcome in. Lemonis have you guys shopped here before . Woman i pop in every once in a while. You know, i just live down the street. Lemonis have you done this whole, like, belly up to the bar concept . Woman no. Lemonis you can belly up to the bar, but you cant touch the jeans without us. Woman i actually like to be able to kind of touch it myself. Yeah. Amy [ laughs ] lemonis i agree. We dont want you touching the jeans. Well, then, i dont want to buy them. So, lets see how the process works. Lady okay, so, can you back up a little bit . Lemonis [ laughing ] sure. Lady can you turn around . I think youre probably, like, a size 36. This is a slim straight cut. Lemonis i mean, you typically have to be slim to wear slim. So im gonna give it a shot. Lady youre pretty slim. Lemonis i have a big ass. Lady you have an athletic ass. Lemonis well go with athletic. Lady [ laughs ] marcus, how you doing . Lemonis these feel so, the problem with these they feel big on me. Lady i like the leg shape on you. Lemonis no, i cant fit in 34s. Lady do we have the size 36 . Amy we dont have them anymore. Lemonis these have too much stretch in them. I feel like im in, like, grandma pants or something with leg stretch. Lady yoga pants. Lemonis same issue. So these actually got even wider. Lady yeah, those are actually way too wide. You got to take those off. [ laughs ] lemonis you want me to take them off right here . Just like lady well lemonis they didnt have my size in most instances, and they didnt have much inventory for me to choose from. I felt like i was being given the leftovers. Why is it called blujean bar as opposed to blue jean bar . Lady im from new orleans, and so i came up with this idea that it was gonna be, like, a blues bar, like a new orleans blues bar. Lemonis does it feel like a blues bar in here . Lady it does not feel like a blues bar. Lemonis and so whats the model that you use for pricing . Lady so, basically, we have about a 50 margin, which is a huge improvement for us, just by trying lemonis so youre proven, but youre not gonna get there. Lady no. Lemonis today, blues jean bar is operating at about a 50 margin. The retail minimum for a Clothing Store should be north of 60 . If they want to make more money, they need to compliment the jeans with more products that have higher margin. For example, if jeans had a 50 margin and a tshirt has a 70 margin and a sweater has a 68 margin, youll add those all together and come up with a blended average somewhere around 62 . Why is the inventory so anemic . Lady well, i think weve been cashpoor. I have been trying to pay old debt and buy new inventory. Lemonis at the same time. Lady at the same time. Amy our stacks used to be, you know every single one was to the top, and i had two back rooms full of these. Lemonis like, theres a whole shelf thats empty. Amy that used to be an entire wall full of denim. Lemonis so you used to have inventory just stacked. Amy yeah. Lemonis and what changed . Lady well, the business changed in the past couple of years, mainly cause i opened too many stores too fast. Lemonis how many did you open . Lady at the height of it, i believe we had 13 stores. Lemonis and how many stores left today . Lady we have three stores now. Lemonis what happened . Lady well, new orleans i dont think i understood the market. And i never could figure denver out. Lemonis but they wear jeans in denver, right . Lady they do wear jeans in denver. Lemonis so, denver. The next one . Lady boston. I did not understand the boston customer. The next one was san jose. Lemonis okay. Lady i never understood that market. We had mill valley, california. Lemonis [ laughing ] and why didnt it work . Please, dont say because you didnt know the market. Lady that is what happened there. Lemonis jeans isnt barbecue. Its not that complicated. Whether this is cleveland or the most fascinating city in america, its jeans. Really. So three stores left today. Lady yes San Francisco, chicago, then dallas. Lemonis what was the worst year . Lady i believe 2013. And we did like 8 million on the top line, but we had losses. Lemonis how much was that . Lady 396,000. Lemonis and that was with 13 stores . Lady that was with the whole engine running. Lemonis ah. In 2013, lady did 8 million in sales across 13 stores but lost close to 400,000. Thats because only three of the stores were actually making money. And the big problem was they werent making enough money to keep the other 10 open. And so the only solution was to keep those three and say goodbye to the rest. Lady every day, i sit there at the computer, and its, you know, how do i manage the lean amount of cash that i have . Because my numberone priority is to keep the lights on in three locations, pay old debt, keep everybody working. And that spins a tightrope ive been walking. And it kind of feels like breathing with a noose around your neck. Lemonis which is not very easy. Lady no. Lemonis and when you had 13 stores, where was the office for merchandising, inventory management, accounting, i. T. . Where was all that . Lady i live just right outside of aspen, colorado, and so its there. Lemonis why do you live there . Lady my husband got a job there. I have two kids now 3 and 5. Lemonis and is there a store there . Lady there is not a store there. Lemonis lady was literally like a horse out of the barn, Opening Stores all over the country with no research, and she doesnt even live where one of the stores exist so that she can see the product, talk to the consumers, listen to the customers, see whats selling and not selling. No wonder this place is in total chaos. When you source inventory, who buys all the inventory . Lady currently, i do. Lemonis and then, who does the merchandising . Lady the store managers. Amys been with us since 2010. Lemonis youre the manager here, amy . Amy yeah. Lady tashas been with me since 2007. Lemonis tasha, what do you do . Tasha im the director of sales. Lemonis who does the ordering . Lady i do. Lemonis so let me understand that tasha, what do you do again . Im sorry. Tasha i manage the managers within the stores. Lemonis three stores. All store managers, they report to you. Tasha mmhmm. Lemonis and you report to her. Tasha correct. Lemonis and so what are you working on . Lady so i work on the debtmanagement. Lemonis i subscribe to the theory of very flat management. In this case, there should be three store managers, and they should all report to the owner. But im not really sure why lady put this other layer in between her and the stores. Tashas not merchandising. Shes not buying. Shes not hiring the people in the stores. What is she actually doing . Is your name really lady . Lady so, yes, and actually my mother was named lady. So. You know, my mother passed away when i was 9. And she took her own life. She left me money, and i wanted to do something with her money that paid homage to her and i think, on some much deeper level, prove to myself that my life was gonna be different than hers. [ voice breaking ] and now im gonna cry, but, you know, im turning 40 next year, and she killed herself when she was 43. And i think i always felt like, um. That this business would be so successful by the time i reached her age. [ sniffles ] im not a quitter. [ chuckles ] and i cant let go of being able to. Figure it out, you know . Lemonis this is a very strong woman who took a lot of risk in opening up her own business. But its obvious to me that her mothers passing is affecting her ability to make decisions that arent overwhelmed with pressure. Im sorry to hear about your mother. Lady yeah, no, thank you. Im sorry to cry about it. Its just its personal. Lemonis no, i can relate. Listen, my mother died recently, and so i kind of get all that. And the fact that you feel the pressure to not fail it makes sense. Lady yeah. Lemonis i still dont have enough information. I really need to look at the financials. Hello. Lady hi. Lemonis how are you . Lady good. Good to see you. Lemonis there are a number of really big issues here. Theres anemic inventory. Theres layers of management. The margins are horrible. I mean, the list could go on and on. You couldnt have picked a better setting. Lady i know. [ chuckles ] i feel like hes about to give me a rose. [ both laugh ] lemonis right . It feels like that. Lady while were sitting in this romantic spot. [ both laugh ] youre blushing. See . Lemonis um. What i wanted to do is actually just go through the numbers with you. Lady okay. Lemonis you went from 13 stores to 3 . So lets look at the p l. 3,145,000 in sales. Business lost 10 grand. Lady yeah. Lemonis and thats because you lifted all the bad stores out. Theres three stores left. They generate over 3 million of business, which is a heck of a job. Lady right. Lemonis especially considering that the inventory is anemic. So, a negative balance in all the checking accounts . Lady yeah. Lemonis okay. So the total assets with inventory that you own 166,898. 1,603,000 of liabilities. Lady mmhmm. Which is made up of 865,000 in payables to vendors. Lady all payables to vendors. Lemonis 50,000 in credit cards. And 688,000 in line of credit. And that line of credit you said you personally signed for it . Lady yes, and i pledged my assets towards it. Lemonis and what are those assets again . Lady its portfolio old, like, bluechip stocks. Lemonis and thats what your mother left . That was your inheritance . Lady yes. Lemonis if everything goes bad. Lady [ voice breaking ] my creative spirit is invested in this business, and, for three years, ive been not being the best mom or the best wife because im consumed by fixing this problem. I would like to take this business to the next level. Its very hard to have a business where people feel it. Its the juju. And we have it. Lemonis that juju that you talk about thats actually you, to be honest with you. You basically started a business by rubbing two sticks together. Lady [ laughs ] lemonis right . Lady yes. Lemonis and so, i want to make an offer. Lady okay. Lemonis and so, my offers 800,000 for 50 of the business. That 800,000 will be used to clean up the situation with the vendors, pay down the bank significantly, and put money in the bank for working capital so that we can have inventory for everybody. Lady you know, im thinking that, to me, the equity piece is really important mainly just because i spent so much time, blood, sweat, and tears in this company. Lemonis okay. Lady i think my counter would be. But raise you to 1 million. Cate i assumed the storemanager role. Lemonis whens the last time you saw lady . Cate i havent seen lady in six years. Its versus the other guys. Eese cheering clearly, velveeta melts creamier its the ikea winter sale. Akatheupto50 off already lowpricessale. Akathelookwecantouchevery thingbeforewebuyitsale. Akathebtwicymi. Akatheifinevergetoutof hereitwasniceknowing allofyousale. Akatheallthesesavings canreducestress look it up its science. Fomoirlftwsale. What . Even though you keep your car clean, does it sometimes smell stuffy or stale . Try febreze car vent clips to eliminate those odors for up to 30 days. Stuffy, stale car odors occur because of everyday smells that are absorbed and released from soft surfaces. Then theyre circulated by the ac system. Febreze car vent clips eliminate the stale, stuffy smells in your car and leave behind a fresh scent for up to 30 days. Plus, they come in a range of scents including extra light. Try febreze car brand power, helping you buy better. Its the ikea winter sale. Akatheupto50 off already lowpricessale. Akathelookwecantouchevery thingbeforewebuyitsale. Akathebtwicymi. Akatheifinevergetoutof hereitwasniceknowing allofyousale. Akatheallthesesavings canreducestress look it up its science. Fomoirlftwsale. What . Bright yellow lays bagsnd and noses frostbitten snack table spread that is fit for a king these are a few of my favorite things warm ugly sweaters because your friend says so bags of tostitos with salsa and queso wild geese that fly with the moon on their wings these are a few of my favorite things lemonis and so my offer is 800,000 for 50 of the business. Lady i think my counter would be if you could take 40 of the company but raise you to 1 million to satisfy the vendor debt specifically. Lemonis the vendor debt could be worked out with a much lower amount. Lady it can be worked out. I hear you. Lemonis so your 865,000 could be for maybe 10 or 20 cents on the dollar. Well, thats 160,000. Lady yeah, so, i could come back down to 800,000, but i think i really need to do 60 40. Lemonis why is the 50 hanging you up so much . Or is it you still want to have more than me . From a creativity standpoint, you trump me by 100. From a control and process standpoint i feel like thats my strong suit. I bring value. You bring value. I want us to be the same or nothing. So, my offers 800,000 for 50 . Lady no 900,000, 50 50 . Lemonis whos determining what happens with the 900,000 . Lady you are. Lemonis ill put the extra 100,000 in because i know that i own 50 of it, and im controlling how the money gets spent. Lady im really happy to be your partner. Lemonis thank you. Lady and i feel like its right. Lemonis so we have a deal . Lady we have a deal. [ laughs ] lemonis congratulations. Lady congratulations to you both of us. Lemonis and dont forget im 100 in charge. Lady [ laughs ] i know you are. Im excited. Lemonis good morning. Lady and i had dinner last night, and we made a deal for me to invest 900,000 into the business. Amy [ chuckles ] nice. Lemonis and im 100 in charge. So the 900,000 that im putting into the business is gonna be used to solve three primary things bring inventory in, take care of the vendors that supply us, and were going to pretty significantly change the look of the store. And as we kind of remerchandise the store, were going to pick products that we think are easy boltons, easy upsells. We want to make sure that everybodys in the appropriate role. And i think, tasha, the question that i have if youre in dallas. Tasha correct. Lemonis . Why is there a store manager and you . Why all these layers . Tasha well, i think, one, i do some of the training. Its a whole mix of things that i do. Lemonis i want to really dig into that. Tasha yeah. Lemonis the problem with this business is that when this company shrunk from 13 stores to 3 stores, the Management Structure didnt shrink with it. So, theres lady, whos the owner. Theres tashas position, whos the director of sales, who oversees the managers. Then theres the managers who have assistant managers and floor managers and salespeople. We got to flatten that out. That is too many layers of management. What do you guys think the biggest challenge for lady is gonna be . Amy getting used to you. Tasha yeah. [ laughter ] lemonis i have a feeling you and i are gonna. [ laughter ] lady giddyup. Lemonis all right, lets go to work. I live in chicago, and so while i was home, i decided to visit the blues jean bar on halsted street unannounced. The employees think the cameras are there only for basic footage. They dont know im coming. And right away, i notice a dirty storefront and a dirty awning. It wasnt good. Hi, guys. Welcome. Let us know if you need help with denim. Man these in a. Katelyn 33. We do not. We only have a 34 and a 38. I know. Lemonis just like in San Francisco, they didnt have enough inventory. Customers are asking for things, and they dont even have their sizes. Katelyn unfortunately not right now. Our shorts are kind of limited. Lemonis i noticed this shoebar area, and it was just boxes piled up, merchandise all over the place. From a presentation standpoint, theyd get an f. What is your name . Cate im cate. Nice to meet you. Lemonis marcus. Cate marcus. Hello. Hello. Lemonis nice to meet you. Cate welcome to our store. Lemonis thank you. Did you know lady and i made a deal for 50 . Cate yeah. Lemonis how long have you been here . Cate six years. And i assumed the storemanager role four weeks ago. Lemonis and so who do you report to now . Cate i answer to tasha. Lemonis how often does she come . Cate i have not seen tasha for over four years. Lemonis and how about lady . Cate i havent seen lady in six years. I know she has been to the store in the last 12 months, but i have not seen her. Lemonis happened to be a day you were off. Cate yeah. Katelyn ive never met lady. And the roles of everyone is very confusing. Lemonis im definitely frustrated with the fact that tasha hasnt been in these stores managing these people. But if i was gonna hold one person accountable, it would be lady, the woman who owns this business. She should be setting the direction. Nice meeting you. Katelyn you, too. Lemonis it was really nice meeting you. Morning, guys. Cate hello. Lemonis how are you . After seeing what i saw in chicago, i called lady, and i told her that her and tasha need to come and bring amy cause what ive seen, i dont like. I want to know what the hells going on around here. I know you havent been here in a while. Lady i havent. Lemonis and why is that, by the way . Lady you know, i have be