Lemonis my job is to help this owner appreciate his staff. This isnt gonna go anywhere good. Hayden its not. Lemonis . And rethink his process. If we dont fix this, this business is gonna go nowhere. Im Marcus Lemonis, and i risk my own money to help businesses. I love investing in american businesses. Woman these people are here because they care. Lemonis its not always easy, but i do it to create jobs and i do it to make money. Do we have a deal . Lets rock and roll. This is the profit. So, i received an application from a company in georgia that has a cooler business. Its called polar bear coolers. The overall cooler business has exploded, and particularly the highend cooler business cause people want to invest in something and hold it forever. And the softsided cooler business is a fastgrowing category. Now i love tailgating and i love the outdoors, and so it fits nicely into my portfolio. [ rock music plays ] hayden hello. Lemonis whats that music . Hayden you didnt know how you doing . Im marcus. You . hayden im hayden. Nice to meet you. Lemonis hayden, how are you . Geoff marcus, geoff gold. Lemonis nice to meet you. Brett im brett. Lemonis how are you . Lemonis whats. Brett thats strud upstairs, playing. Lemonis in the middle of the workday . Okay. All right, let me ill make my way up. Hayden first door on your right. Lemonis sounds like theres somebody playing as if theyre in their garage practicing for a gig tonight, while other people are trying to get their job done. Not exactly a great environment. [ music continues ] hi. How you doing . [ music stops ] how are you . Strud hey, Marcus Lemonis im marcus. Strud im so pleased to meet you. Lemonis what is your name . Strud strud. Lemonis okay. Stephanie stephanie. Lemonis stephanie, nice to meet you. Stephanie this is bobear. Lemonis bobear . Stephanie yes. Lemonis is this the business, or is this a music studio . Strud this is the music studio where we record some music for the business and social media. Lemonis are you the owner . Strud yes. Lemonis okay. And what is your role here . Stephanie i just own him. Lemonis are you his wife or just. Stephanie he calls me his lovelifepartner. Strud lovelifepartner. Stephanie so its a mouthful. Lemonis do you want to get married . Strud im allin. Lemonis oh. Maybe you should formalize that. So, whats the polar bear jingle . Is there a jingle . Strud no. Theres no particular jingle. Lemonis well, just play me something. [ rock music plays ] strud Marcus Lemonis, weve seen your show and it sure is fine lemonis okay. Strud why dont you come on down to georgia meet polar bear, well have a good time lemonis look, i love the fact that strud likes to have fun. If he was upstairs writing jingles or commercials or doing videos things that actually drove the business forward i wouldnt care. And im wondering if thats the reason that im actually here cause he cant focus. Strud were the pioneers of the soft performance cooler, okay . 20 years, ive been doing that. Right now we are super stressed. I mean, theres been a lot of hard times. Lemonis what are you stressed about . Strud last year was 2. 5 million, but within 2017, we were 3. 5 million. Lemonis whoa strud so weve gone down 1 million in two years, marcus. Thats the problem. Lemonis the fact that he lost over 30 in revenue from 17 to 18 is a really big deal. Where is the product . Why dont we go look at the product . Strud lets go do that. Lemonis so, is this the full assortment . Strud yeah. This is the h2o, the waterproof line. So, the difference in these two models, marcus, is this is closedcell foam, like the foam in your life vest. Its squishy. Its waterproof. Lemonis okay. Strud and this is opencell foam, like the foam in your couch. It sucks water up like a sponge. Lemonis in order for a company to be successful, it needs to be able to tell its story quickly and cleanly. Instead, hes starting to go into all these technical terms, like closedcell foam or opencell foam. All i essentially want to know is, how long do things stay cold, how much does it cost, and does it do what i need it to do . Strud okay. So, you have a rubber base bottom here. And then its piping all over. You have a daisy chain here. Yeah, this tarpaulin material is really nice. Lemonis iii dont know what any of that means, and i dont think the customer does, either. Ill be honest with you. The construction of it and the details the quality looks good. So, what size is this . Strud this is the 48pack. Lemonis cost and retail . Strud this one is around 75 to make. Lemonis and retail . Strud 220. Thats the biggest size we have. A 24pack right here. Lemonis okay. Strud 12pack here. 6pack right here. This is our least seller. Lemonis this looks like im going to lunch, like a little kid. So why do you still have this, then, if this is the least seller . Strud we sell enough of them. Lemonis how many . Strud 5,000 a year. Lemonis and how many of the other one . Strud roughly 35,000, 40,000. Lemonis okay. As i look at all the coolers, it was a bit overwhelming. And im wondering if the 80 20 rule doesnt apply here, which is that 80 of the revenue comes from 20 of the skus. Lets go to the warehouse. Wow. So, what are these . Strud 6packs. Lemonis how do you know . Strud because i can look at this and tell theres too many 6packs here. Lemonis when i walk around this warehouse, it looks. Chaotic, it looks disorganized. Theres no rhyme or reason to where things are. What is all this . Strud this is the return bin. Lemonis it doesnt look right. What i thought i would see, to be honest, is i thought it would see some sort of racking. Strud i mean, i can walk in here and get a visual of where everything is. Lemonis so how many 48 blacks are out here right now . Strud um. Well, lets go look at them. Lemonis no, no. You said you could do it from here. Strud well, i need to look at them. I need to look. Youll see where they are. Lemonis in order to improve the profitability of the business, understanding your inventory, managing it properly, knowing what you have at the right time at the right price is quintessential to maximizing your margin. Whats here . Geoff 7,000 coolers. Lemonis and how do you know if you have the right amount of a particular sku . Geoff cause i track the inventory, and then we do physical counts periodically. Lemonis and how much in total dollars is in inventory here . Geoff right now, i dont know off the top of my head. Its on my sheet. Lemonis what are the top skus you sell . Geoff the 12pack black. Lemonis how many do you have in stock right now . Strud honestly, i do not know how many black 12packs we have in stock right now. Lemonis how many do you have . Geoff zero. Lemonis you dont think thats a thing you should know . Geoff we dont have the funding to stock what we need at this moment. Strud whatd you do . You didnt piss him off, did you . Yeah, tell him about that. Why do we have so many 6packs . Geoff these will be gone in about a month. Strud thats too long. I agree with you. Lemonis well, dont agree with me, and dont pick on him. Heres the funding. Here you go. Heres some money. Essentially, theyve piled up a bunch of cash in their warehouse in different areas and dont know what they have. And anytime a company does this, it essentially puts themselves out of business, and they dont even realize it. This inventory thats sitting around needs to be, first, organized, and second, if theres too much of something, it needs to be liquidated. If theres too little of something, it needs to be ordered. You think your [bleep] looks together . Strud for my knowledge, i know whats here. Lemonis okay. So, i want to hear from your sister. Brett you were doing just fine, just fine. Everything was going great. You were making lots of money. But then somebody quit manning the store and quit coming up with fresh ideas. You didnt do any marketing. You didnt do any advertising. You didnt do any social media. The times changed, and polar bear didnt change with the times. Strud i honestly didnt know where else to go, so i diversified. I bought some land in buena vista, colorado, and we got a boxcar and we put it in the town. And we turned that into an airbnb rental. The only thing else you have to do is sell it. One, two, three done. I see that vision very well. So it should have already been bringing back money, but it cost too much. Lemonis how much money did you put in the land . Strud 220,000. Lemonis and how much did you pay for the boxcar . Strud 75 grand. Lemonis so now thats almost 300 grand . Strud yes. Lemonis unfortunately, strud thought it was a good idea to strip the company of all of its working capital and not be prepared for a downturn. I feel like i need to understand more about what really happened here not just with struds lack of focus, but whats the real story about how the people that work here that are part of this business really feel . So, how long have you worked there . Hayden itll be five years in september. Lemonis oh, wow. And whats your biggest criticism of how the companys run . Hayden theres zero process for strud, as far as this is how we do things. And me and strud recently had a blowup. It was kind of a long time coming. And multiple salary cuts. My salary was cut 55 overnight. Lemonis excuse me . Hayden yeah. In the past two years, too, ive been in a tailspin from this because, like, i bought a house. Lemonis howd you pay your mortgage . Hayden i had to file bankruptcy. It was a whole thing. Lemonis does he know that . Hayden yeah. House gone. I live in my dads basement right now. Lemonis i understand that businesses go through tough times and pay rates have to be adjusted, but its the way and the context that you communicate to that team member why its happening and how its gonna happen. I dont know how im gonna get strud to see that unless i just put it right in front of his face. Strud, on a scale of 1 to 10, how would you rate the way you treat people . Strud 7. Geoff in the beginnibeginning, it was much nicer. Things got a little more intense as we were growing. 2009, we had a meeting, and he proceeds to go on the board and drew a line, like, this is what everybody makes. This is how much geoff makes. This is how much, you know. Lemonis in front of everybody . Geoff in front of everybody. And that meeting is where you said, no. Im up here. Youre down here. Lemonis i cant think back to a time where this quickly, im hearing about how distraught people are. There is a definite problem between the owner of this business and everybody else that works here. Were you hurt by it . Geoff absolutely. And he cut my pay cause he thought i was making too much money. Lemonis how much did he cut your pay by . Geoff 10 grand. Lemonis and how many years did that last . Geoff well, we got to a different arrangement about six months later. But the damage was already done in my life, so. Strud hold on. How was damage done to your life . Geoff personal stuff. Strud okay. Personal stuff. Geoff when your house is worth nothing and your pay is cut by 10 grand, it changes your life. Lemonis i dont know how you actually fix this business without totally revamping the way strud thinks. And im not sure its possible. Coming up. From 16 to 17 to 18, its drop, drop, drop, drop. Strud okay, so lemonis why . Its really im telling you, this is gonna determine whether i move forward. If youre looking to take your business to the next level, log on to theprofitcasting. Com. Geoff when your house is worth nothing and i like to question your im yoevery move. N law. Like this left turn. Its the next one. You always drive this slow . How did you make someone i love . That must be why youre always so late. I do not speed. And thats saving me cash with drivewise. My son, he did say that you were the safe option. And thats the nicest thing you ever said to me. So get allstate. Stop bossing. Where good drivers save 40 for avoiding mayhem, like me. This is my sons favorite color, you should try it. [mayhem] you always drive like an old lady . [tina] youre an old lady. Finding the right words can be tough. N it comes to autism, finding understanding doesnt have to be. Together, we can create a kinder, more inclusive world for the millions of people on the autism spectrum. Go to autismspeaks. Org. I had so much doubt in me. A supervisor reached out on linkedin. We set up an interview and from there i was hired. Linkedin was the matchmaker. Theres room for more than just the business you came for. Whether thats keeping up with what you always do. Or training for something youve never done before. Thats room for possibility. want you to spend your stax refund with them. S at sprint, were doing things differently we say, keep your refund. You heard that right because now you can get the Samsung Galaxy s10 for zero dollars a month when you switch. For people with hearing loss, visit sprintrelay. Com. [ singing ] allil sweet oh for accenting the heck out of that wall, you deserve the [ singing ] sweet reward of a diet dr pepper. Hmm, that is sweet. [ singing ] so sweet oh, youre leaving already . [ singing ] oh yeah diet dr pepper. [ singing ] its the sweet one. So i started looking on linkedin. I found a role at this amazing school. I applied, and landed the job. I love sharing what young women are capable of. I applied, and landed the job. Which of your devices are protected by daily security updates . Daily security updates. Daily . I dont know. The only thing. Im struggling with this. Some providers you have to manually download updates to each device. Comcast business securityedge updates every 10 minutes to help keep your connected devices protected against new ransomware, malware and phishing threats. Every 10 minutes feels pretty good. Get secure, reliable internet and voice for an amazing price. Call today. Comcast business. Beyond fast. And your pay is cut by 10 grand, it changes your life. Strud i wish we had talked about it more. Lemonis when you own a business, you have to read peoples minds, and you have to think about their feelings more than your own. With geoff, i appreciated his level of humility and openness so early on after just meeting me. I feel like i know enough about their product and their process kind of their people. And i want to start to dig into the financials to really understand how the inner workings are made up. Lets go to last year. 2018, Company Generated 2. 6 million in revenue. The company lost 35,000. Strud well, hold on. Lost 35,000 . Lemonis did you know that . No, no, dont point at him. Geoff thats because of the train car stuff is in there. Owners discretionary spend. Lemonis i cant believe hes surprised that this move that he made to pull all the working capital out of the business really hurt the company. But with strud, i think its pretty consistent with his lack of focus and his lack of selfawareness. 2017, the company did 3. 2 million in revenue and made 16,000. Strud wait. We made only 16,000 . Geoff because of lots of owners discretionary spending. Lemonis 2016. 3. 5 million in revenue. Made 88 grand. So from 16 to 17 to 18, its drop, drop, drop, drop. Strud okay, so lemonis why . And you cant blame anybody. Strud okay. Um. Lemonis its really im telling you, this is gonna determine whether i move forward. If you answer wrong, im leaving. Strud its 100 bad decisions made on my part, marcus. Lemonis thats it. Thats the answer. The fact that strud was able to answer the question correctly showed me that he is aware of his own liability, which gives me a little bit of hope. When you took a disproportionate amount of money out of the business, you took the companys ability to make the rightsize buy at the right price, and so you actually crushed the margin because you made them order in smaller batches. You take the working capital out of a business and they cant buy the right inventory, invest in product innovation, invest in marketing, then theres a reason that the business is down. You took the blood out of the body. Can we look at the Balance Sheet real quick . Lets just look at the current one. 422,000 in assets. On the liability side, 124,000 in payables. So the business is relatively clean in terms of its Balance Sheet, right . Is that a fair statement . Strud mmhmm. Lemonis so, normally, when im doing a traditional equity investment, i would write a check. My worry is how he would actually manage the money. I almost need to keep him. On a tight leash. This business only needs, financially, the ability to ramp up its inventory as sales ramp up. Heres what im willing to do. I dont have an interest in owning the business. Its your thing. You founded it. Am willing to set up a line of credit for the business. If the goal is to get back to 3 million. Strud yes. Lemonis youll need a 540,000 line of credit. You earn into the line of credit as the sales grow. Im gonna provide them with a revolving line of credit that allows them to borrow money from the line, build inventory up, and as the inventory sells back down, take the profits from that and pay down the line. Over and over again, theyll continue to pull on the line and pay it back, pull on the line and pay it back. And retained earnings over time will replace the need for the revolver. Ill have the Interest Rate be 5 . Strud thats good. Lemonis but i want 25 equity for doing it. Strud so, i need a good plan for how its going to happen. Lemonis what the Company Really needs i think it needs an attention to inventory, a Clear Digital strategy directtoconsumer. I think it needs the people that are in the Business Today to see a financial path for them to make more money as the company grows. Strud yeah. Marcus, i am so appreciative that youve come here, and i would be honored to be a partner with you. Lemonis okay. Lets rock and roll. Hayden yeah strud all right, buddy. Lemonis polar bear had a giant drop in sales, and their business is largely directtoconsumer, which means its through the website. And the fact that strud hasnt addressed this before is not only concerning, but im not gonna wait any longer. Strud hey. Whats your name . Keran keran. Strud im strud. Lemonis and so i set up a meeting with a solid Marketing Company in atlanta because i want to get objective thirdparty feedback on what they think about the website. And im curious to see how strud reacts to it. Cargill so, as you can see, there is no way to purchase anything from this page. Youre telling them about this bulletproof liner, but youre not really telling them why they should buy this. Lemonis whats that angry dog doing . Strud hold on. Thats not an angry dog. Thats bretts dog. He said he cant bite through the liner. Cargill what is the benefit . Does it keep the drinks colder longer . What does it do . Strud it doesnt leak. Cargill okay. Strud it says leak proof. Lemonis where does it say that . Strud the stamp thats on there leak proof. Polar bear leak proof. Keran that stamp that says leak proof. Cargill [ laughing ] you cant read that strud i mean, if you read through it, itll tell you more. Cargill no one reads through here. Lemonis who put this website together . Hayden no one reads it. Keran youre doing the customer a disservice by not leading t