Travis this is who we are lemonis if i cant help these guys return to their roots. So you did 1 million with the watches, and then youre like, thats too much. Brad if its not broke, dont fix it. Lemonis . This business will stop ticking for good. Travis walk away, then. 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. In 2010, lifelong friends trevor jones and Travis Lubinsky founded flex a watch company with a cause. Trevor we make watches that give back. Every purchase helps provide meals for children in need. Lemonis with their positive message, a reasonable price point, and bright, fun colors, the company stood out in a crowded field. Travis the watches are actually all gonna be interchangeable. Its also a great upsale opportunity. Lemonis and soon, sales were approaching the Million Dollar mark. Travis the components will be here in two weeks. Theres half a Million Dollars of these watches sitting around. Lemonis but when flex started introducing new styles, customers stopped buying. Travis what orders do you need to fill . Brad i mean, no ones committed yet. Travis this is ridiculous, bro. Lemonis now their revenue is in free fall, and their once healthy profits have turned into mounting losses. I have been looking for an accessories business to pair with my fashion brands, and flexs social mission just increases its appeal. If i can get these guys back on track, we should be making money and a difference in no time. Hi, guys. Brad hey, hows it going . Lemonis im marcus. Brad brad. Nice to meet you. Trevor trevor. Lemonis trevor, nice to meet you. Travis im travis. Lemonis how are you . What are you guys doing . Brad just going over inventory. Lemonis is this the whole office . Travis youre looking at it. And then the warehouse is downtown. Lemonis okay. Are those the watches . Travis yeah. So, we, basically, started with an interchangeable watch. So the face pops out of the band pull back, pop up. Lemonis its a cool watch. What does a watch like that sell for . Travis 35. Lemonis these are nice looking watches at a great price point. Travis we wanted to do an accessory that was bright, that could match with all all Different Things hats, shoes. Lemonis this is a comfortable watch. Travis its lightweight. Its durable. Initially we had 10 colors. Each color represented a different charity, that we partnered with to give back 10 . Lemonis thats pretty slick. Travis yeah, right . Trevor we wanted to do Something Different, and no one was doing charity in the the watch space. So, we started partnering with charities, and people loved it. Lemonis are these still made today . Travis no, thats the first generation, five years ago. Lemonis so thats first generation. What happened after that . Wheres generation two . Travis so, we made a sport version at 119. Lemonis i look for watches that arent expensive. I dont like expensive watches. Why did you change your model . Travis well, we wanted to fit in with retail stores, and they said, you need to be about 100. So, that watch for the retailer, buying it at 15 and selling it for 35, they just werent getting the right ticket per door. Trevor they told us to make a higher price point watch. It wasnt gonna make it into the case. Lemonis at 35 . Trevor no. Lemonis so, you changed your whole Business Model over retailers asking you for a higher price point. Travis yeah. Lemonis so, this is generation two. Is there a generation three . Travis you see right here . Were trying to profile it now. So thats gen three. Lemonis what does this retail for . Travis this, specifically, had to go backwards now, to go 65 to fit in between. Lemonis and so you just dropped the price, thinking you were finding a hole in the market. Travis yeah. Lemonis wheres the charity angle on this generation . Brad a lot of people dont realize we still do the Charity Aspect. Lemonis i think this is a total mess. It doesnt feel onpoint with the brand. If you guys have a mission, you should stick to your mission. This is what happens to a brand when they try to appeal to retailers. Their first generation watch had great colors, had great story, had a Charity Aspect, and then they, all of a sudden, changed directions. And then they wonder why it stopped working. Whos in charge of the three of you . Trevor travis and i own flex together. Travis and my brother came down and he was, like, the shipping manager. Lemonis oh, you guys are brothers . Brad yeah. Lemonis what do you do now for the company . Brad im the general manager. Travis we each own 41 . Lemonis okay. So 82 between the two of you. And then theres somebody else that owns 18 . Travis oh, we have an investor. Lemonis what are your guys individual roles . Trevor so, im the creative. Everything that you see flex, whether its a video. Lemonis so trevor has marketing. Travis yeah, and trevor sorry, just to jump in trevors visual. I source all the components. Kind of work with the factory to figure out what can i get the quickest at the most affordable price. Lemonis do you literally do it like that . Travis yeah, literally. Lemonis travis says he does everything fast and on the cheap. Yeah, thats obvious. It shows. How much revenue does the business do . Travis 500,000 after we launched. Lemonis thats strong. Travis yeah. 979,000 the next year. Lemonis getting stronger. Travis and then we changed the product. Our sales dropped to half a million. Lemonis because of generation two, sales went down. Travis yeah, they dropped 50 . Lemonis so, how much business did you do last year . Travis 300,000. Lemonis and what did you end up making . Travis we lost 70,000. Lemonis now, who funded the loss . Travis we all did. Just personal stuff. Lemonis so on your personal cards . Travis yeah. I mean, right now, its 70,000 were in debt. Lemonis im a big believer that numbers dont lie. The further they got away from their original story and the Charity Aspect and started making watches that werent fun look like a watch you could buy on a Street Corner the worse their numbers got. What gave you guys this idea to get in the watch business . Travis so, his mom ran a Breakfast Program in mexico. Lemonis okay, a food program. Trevor yes. We would go down there and volunteer, and so we wanted to make an impact with something that we really felt was cool and affordable. Lemonis is your mom still doing the Breakfast Program . Trevor um. She was until she she got Breast Cancer eight years ago. We lost her three years ago. Lemonis she passed away. Trevor yeah. Lemonis what was your moms name . Trevor karen. Lemonis is your moms name incorporated in stuff . Trevor no, weve actually talked about that, but were just not able to go there yet. Lemonis how do you keep her momentum alive . What do you guys do to do that . Trevor nothing. We started as a purpose brand, but i think wed be more of surfbeachy brand. It just didnt feel right pushing a story of this watch will provide meals for children in need. We wanted to make sure that people knew that it was still a cool watch and not just a donation piece. Lemonis the story that trevors telling me has confused the heck out of me because in one sentence hes telling me that it was about his mom and the charities, and the next minute, hes telling me about surfing brands and cool things. So, i wanted to get the actual story from him. I think the fact that you have that as your purpose is a very big deal. Youre driven to have this succeed because thats your connection to her. Trevor i dont think about that. I just i think ive pushed it out. Losing her is just i havent, like, dealt with it, you know . Im just bitter. But yeah, we keep moving, for sure, [ voice breaking ] cause she would love that. Lemonis i lost my mom, you know, not too long ago. Trevor i didnt know that. Lemonis yeah. You know, i appreciate your vulnerability. I mean, talking about your mom, i think thats always tough. But you gotta deal with it, you know that, right . Trevor i do. Lemonis and the way to do that is to have this business fulfill what she wanted you to do with it. Ii feel bad for him. Look, i get the fact that trevors struggling with this whole thing, because, in his mind, the Charity Aspect connected to the watches is a direct connection to his mom, and its tough for him. But its had a direct impact on business, and trevor needs to deal with this because it hasnt been good for him either. All right. Lets head to the warehouse. Trevor all righty. Travis hey, guys man hey lemonis how are you. Im marcus. Nice to meet you. So, how did you connect with them . Travis our office used to be two blocks away. Lemonis okay. Travis we came across this building, walked in, and said, hey, hows it going . Within five minutes, we were creating a new watch. Lemonis what i just heard seemed like speed dating for business. Im gonna meet you in five minutes, were gonna do a deal together. Maybe a little due diligence, maybe a little shopping, maybe a little research. Not for travis. As they developed new products, they would come sit down with you, show you a sketch. I would wanna see that whole process. Naim yeah, lets do a tour. So, this is a familyrun business. Weve been doing this for about 15 years. All of their product is just here. I ship it out for them. Lemonis who came up with the box design . Naim well, we actually were in a rush and we s lemonis it looks like that. This box takes the value way down. When this is at point of purchase, the packaging is gonna be more important to me than the watch itself because this is a commodity business. And so you have to find ways to differentiate yourself. This is one of them. Is there anything patented about the product . Travis no. Lemonis nothing proprietary. Anybody could knock it off. Travis and to get a design patent is like, takes years. So, ill show you the process of building a watch. We pick a shape. Step two is the band. What kind of band does it go with this casing . Colors wouldnt matter. Nothing would matter. Then well pick the movement. Lemonis this feels a little on the fly. I have a new job for travis. He should be the spokesperson for minute rice. You know why . It doesnt take a lot of thought or preparation. With him and the watches, he doesnt think about getting a patent, hes not worrying about the packaging, hes not putting any thought into the design. I mean, in the past, they had a brand, but now. Theres nothing here. I mean, honestly, if you had not told me the story about why you guys created it and how you got inspired, i would have been like, i dont need you guys. You have to bring that stuff to life. How do you take social media . What are you doing today that accomplishes that . Trevor were doing everything you could imagine with video and posting and stuff. Lemonis so, heres your Instagram Page for flex watches. So thats a picture of a surfer. I dont know the co why theres a connection. Trevor uh, were in l. A. Were in, like, the heart of l. A. , so it was kind of appropriate for the watch. Lemonis you are, people buy stuff all over the country. To me, the best branding is the authenticity branding. What is your real story . Why do you guys care about it so much . Why do you want other people to care about it . All the charities that youre involved with you should have things posting their events. Trevor theres an image that we try to uphold. Travis but theres no pulse. Theres no, like, real story. Youve held back, and i feel like its not only a part of our story but a part of your life. Like, youre allowed to talk about the fact that we did charity and your mom was involved and talk more about the Breakfast Program. Brad i feel like we did that a lot more when we first started, when it was all the charities. Lemonis when you did a Million Dollars a year. You have, really, two interesting dynamics happening right now. You have trevor who wants to get as far away from the original brand story as he can, and travis who wants to do things as fast as he can, and when you combine those two things together, you end up with a company that makes gold watches in [bleep] boxes. I feel like i have a decent idea of the process, or lack thereof. Id like to go somewhere else and sit down and look at the financials and start to dig in. Guys. Travis hey, marcus. Lemonis how are you . Travis how you doing . Trevor good to see you. Lemonis what i thought we could do is just really get a sense of what the revenues look like and whats happened each year. So, 2011 you did 500,000 worth of business. Gross profit of 129,000. 2012 979,000 of revenue, which is a good job, by the way. 2013 the sales go to 436,000. They drop in half. You lost 200,000. Travis that would be the year we started, basically, redoing the brand. 2014 311,000, lost 87,000. 2015 279,000, lost 34,000. On the balance sheet, the total liabilities are 71,987. Does that include the credit cards that you guys told me about . Trevor yeah. Lemonis and you didnt take any significant pay. Whats at stake for you guys in this business . Travis [ sighs ] the last 5, 6 years of my life and my future, so everything. Brad i moved home with my parents and my wife. Trevor the three of us have given blood, sweat, and tears into this business, and we all believe in it so much. Brad it broke my heart cause the whole Charity Aspect and giving back was what drove me to work so hard for the company. Lemonis and not take a pay. Brad yeah. Lemonis and move back with your wife to your parents house. Thats a big sacrifice. Brad trevor went through a hard time, obviously, after his mom passed. Trevor because of me, probably, we just havent talked about it and discussed it as much as we should, and i dont know how to tell that story. Its tough. Travis [ voice breaking ] i feel bad. I feel bad for my best friend. Thats it. I mean, no one deserves to, like, go through all that stuff. Just, it hurts, you know . Lemonis yeah, but youre emotional because you believe in what youre doing. Whats the business worth today, in your mind . Trevor we like to think that its close to about 2 million evaluation. Lemonis business that did 279,000 last year and lost 34,000. My offer, after considering paying off the liabilities, putting 100,000 of inventory, putting 100,000 of working capital in the bank so that rent and salaries and things can get paid and then dedicating 100,000 specifically towards Mass Marketing to the world, would total about 400,000. So my offer is 400,000 for 40 of the business. Travis a Million Dollar value. Lemonis thats what it is. Travis um, so, obviously, we have to discuss this. Where were at, we have to dilute each 20 . Travis should we include something about your mom and the meal program . Trevor this is not the imagery that fits our watches, the style. Travis im telling you the past and who we are. Trevor that doesnt have to be the brand why does the imagery have to be that . travis this is who we are save without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, you only have to pay for the data you need, starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. 5g is now included with all new data options. Switch and save hundreds. Xfinity mobile. Travis we have to dilute each 20 . So me and you are dropping to 21 right there, and im pretty confident the companys worth 2 million. Trevor well, as much as we want to believe that its so much more, the numbers dont tell that story. I mean, its not about that. We need marcus as a partner. Travis so, i think were gonna take your deal. Lemonis before i write this check, there is no question that im 100 in charge. We have a deal . Trevor well, we appreciate it, marcus. Thank you so much. Lemonis congratulations, guys. Get your ass to work. Whats happening, guys . Trevor hey, Marcus Lemonis one of the things that i thought we could talk about is what the plan and the process are gonna be. Were gonna rebuild a brand using social media, using packaging, using product development. My biggest concern is, i dont know what your story is today. We probably need to go back and make a brandnew generationone watch. And it needs to be Something Different and proprietary that nobody else can get to. Were no longer gonna downplay the fact that this company has a mission. In fact, were gonna amp it up. Were gonna get back to the 10 colors and the 10 charities, and then were gonna add some things that make it even more unique. All right. Lets go to work, guys. Trevor beautiful. Karlo hello, guys. Welcome to shiekh. Lemonis how are you . karlo how you doing . Lemonis im marcus. Karlo my name is karlo. Nice to meet you, marcus. Lemonis are you the manager here . Karlo yes, sir. Im the store manager. Lemonis one of the things that the guys need to think about as we relaunch the brand is how their products gonna sit inside of the retail space, how the customers are gonna react to it. How its gonna be merchandised, how the Sales Associates are gonna think about it. So im taking them to shiekh shoes a store that already carries their product. And i want to see what theyre doing now and what we need to do better. How has flex watches done with your store . Karlo they did very well. Good price point. We had the other, different design that wasnt these. It was a different rubberstyle watch. Lemonis generation one. And do you still carry those today . Karlo that style, no. Lemonis what happened to the old style . Travis theres a Corporate Office, and they requested that we had a more expensive price point cause it was not worth his time to sell the watch. Lemonis so, you did a Million Dollars worth of watches and then, all of a sudden, youre like, thats too much. Travis essentially. Lemonis brad, were you consulted in that process . Brad yeah, i was. It its not broke, dont fix it. Lemonis a store like shiekh has a very small staff two to three people and its not realistic that theyre gonna be able to spend a lot of time s