Mike if i was going to go out and pitch this right now, it would be a very detailed plan. It wouldnt be anything like this. Lemonis im marcus lemonis, and i risk my own money to help businesses. I love investing in american businesses. Woman people are here because i 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. Man yeah lemonis this is the profit. Hatbox is a local hat store in downtown austin and it specializes in any kind of hat. Literally any kind of hat that you can think of. Now, we know that the accessory business is a fast growing business but to have a whole business just on hats i was intrigued by it. Jaron hi. How are you . Lemonis hey, good. How are you . Jaron im jaron. Lemonis jaron . Jaron yes, sir. Lemonis nice to meet you. I love your hat. Jaron thank you. Lemonis this place is bigger than i thought it was going to be. Got to love hats if you work here right . Jaron yes, you do. Lemonis i felt like i was on main street in disney world and i walked into one of the, like, attractions, and i was greeted by a guy who looked like he was from the 1950s. Ill give them credit for one thing for sure. They live the lifestyle. How many different types of hats do you have here . Jaron im not sure. This morning actually, we got in a shipment of like 42 boxes of stuff. Lemonis how are you . Lauri im well thank you. Lemonis im marcus. Lauri good to see you. Lemonis nice to meet you. What is your name . Lauri im lauri turner. Lemonis lauri, nice to meet you. How many different hats are in here . Lauri all of them. Lemonis no, but how many different kinds. Lauri lots. Lemonis when did lots become a financial or a quantitative term . Lots of hats . Okay. I mean, is there 1,000, 2,000, 3,000, 4,000 . Nope, just lots. Lots, okay. Now, are these mens or ladies . Lauri both. Lemonis are most hats are unisex . Lauri all hats are unisex except for ladies hats. Its not your color either. Now, to me, thats not necessarily. Lemonis doesnt fit my fat head though. Lauri nope. You have a significant sized cranium. Lemonis i have a what . Lauri significant sized cranium. Lemonis you mean i have a big head . Lauri above average. Lemonis above average. Okay. The one thing that i was looking for in this process is the Product Knowledge that differentiated them from any other company that could sell hats. If youre going to have a business specifically about hats, your Product Knowledge and your ability to assess the customer, put the right thing on them, well, its paramount. And whats down here . Lauri these are flat caps. Lemonis ive seen sam jackson. Doesnt he wear his hat this way . Lauri yeah, thats this one. With a kangaroo. Lemonis he wears it backwards . Lauri mmhmm. Lemonis did i put this on right . Lauri yes. Ill show you what i think will look good. Lemonis okay. Do you like it . Lauri i do. Lemonis when people walk in, do you know exactly what kind of hat youre going to put on them when you see them . Lauri yes. So these are all handmade hats from milliners all over the world. This is Kate Middletons milliner from the u. K. I actually have to work with fish and game to bring in these feathers. Lemonis really . Lauri mmhmm. And this room is our White Glove Service so none of the oils transfer to the hats. Lemonis i did like the idea that she had this white glove room, and it was a place where you can go get these higherend hats that were one of a kind that may have some history or something technically cool about them, and that she understood the need to separate the average stuff from the great stuff. Much like you would put the finest jewelry in the safe and not in the case. So when you look at a hat like this lauri this is a stetson. Lemonis 228. Lauri not bad for a handmade hat. Lemonis what does Something Like this cost you . Lauri oh, about 90. Lemonis so whats your markup . Lauri i would say a good average, for handmade, 2. 75. Lemonis 2. 75 markup. So i want to explain what 2. 75 means. Essentially you take the cost of a product and you multiply it times 2. 75. In the retail business, theres usually a term of 2. 2 to 2. 7 that people will mark things up. Obviously the higher the markup, the higher the margin. But you have to really understand that as you mark those things up, people can shop them. In her particular business, what i liked about it, theres different sizes, different colors, different manufacturers, and the variability of all the different options gives this company the ability to maximize margin because its not easily shopped. Thats something that i really honed in on. How long has this store been here . Lauri in this location . Lemonis yeah. Lauri a year in september. Lemonis so you were somewhere else before . Lauri well, weve actually moved five times in the last two years. Lemonis uhhuh. So take me back. So one store now, but at the peak, how many stores did you have . Lauri three. Three. Lemonis and they were all in austin . Lauri mmhmm. Lemonis when did the first store open . Lauri 1999. Lemonis okay. How many times have you moved since 1999 . Lauri 16 plus five, i think. Lemonis youve moved 21 times . Lauri oh, yeah. Lemonis how do you establish a Customer Base and hold on to them if every time that customer comes back for a new hat youre gone . Today, theres email and Digital Marketing and theres ways to communicate with people that is far more robust, and so as you look at the fact that she existed since 1999, ton of credit. Been in the business for a long time, tons of experience. You look at the problem with the business. It looks wildly unstable. Lauri back here, this is inventory. This is the way back. This is backstock, and then this is our way, way back which is full of glass and fixtures. Lemonis what is all this stuff . Lauri the glass came from the domain store. Lemonis whats the domain . Lauri another closeddown store. I put like 250,000 into the domain store. The cash wrap, which was i think, like, 30 grand took four years to make that. Lemonis a cash wrap is essentially a piece of furniture that a customer would actually check out at. Probably should cost a couple grand. She spent 30,000. Where did you get all the money to do all this . You put 250,000 in one store. You got to sell a lot of damn hats. Lauri i put my house up. Lemonis she put a mortgage or a second lien on her house. Essentially a line of credit that allowed her to pull the equity out of her house and put it into the business. The challenge is if the business doesnt work, well, the house still has the loan. It does prove to me though that shes really committed to the business. Any time somebody puts their domicile, the place that they live in, at risk for their business. I dont know if there is anymore skin in the game than that. Lauri but what happened at the domain is hard to talk about. [ clears throat ] no a c in texas. Facing the full sun, 80 degrees inside with 80 humidity for five years. I couldnt even work there the last two years. Did i mention menopause and what thats like . Lemonis im not familiar with how that works. Lauri its horrible. Remember those old heaters when we were kids that were in the wall and theres a dial and you heat it . Lemonis sure. Lauri menopause is kind of like that, but somebody took the knob. Oh, its horrible. Lemonis okay. Lauri you cant put a women in menopause in humidity and expect her to sell hats. Lemonis in terms of having a filter, does she understand how that works . Can we go see the cash wrap that you paid 30 grand for . Lauri yes. Lemonis lets go see that. Lauri i have asymmetrical compound curves design. Lemonis okay. Lauri . Based on some of my measurements. Lemonis perfect. Lauri its sapele, african hardware. You can see where its splitting from the humidity up there, but since its been here its healing. This is components that are separate kind of like a puzzle. Lemonis so you spent. You spent 30,000 to build the checkout stand . Lauri well, you know why . I always wanted a nice cash wrap, so for the expansion i got what i wanted. And if i die, ill be buried in it or burned up in it is how i look at that. Lemonis what i was trying to figure out is how do i bottle up her knowledge and her quirkiness with some sort of normal commerce . I did start to think to myself, like, whats it going to be like to do business with somebody that spent 30 grand on a cash wrap and moved 21 times . Whats their decisionmaking process like . Lauri if i saw that hat walking by outside, id offer to fix it. I never approved it. At hatbox, we do things my way. Are ywho experiencented occasional bloating, gas,s or abdominal discomfort . Taking align every day can help. Align contains a quality probiotic developed by gastroenterologists. It adds more good bacteria to your gut, to naturally help soothe your occasional bloating, gas, and abdominal discomfort 24 7. Support your Digestive Health with align, the 1 doctor recommended probiotic. Try align today, the pros in Digestive Health. Also try align dualbiotic gummies to help support Digestive Health. Killer attitude. Good moves. Or hydration. Neutrogena® hydro boost. The number 1 hyaluronic acid moisturizer instantly delivers 2 times the hydration. And keeps hydrating all day long. Running dry of supple, bouncy skin . Never hydro boost. Pair with hydro boost wipes to cleanse and hydrate. Neutrogena® pair with hydro boost wipes to cleanse and hydrate. So for the expansion i got what i wanted. And if i die, ill be buried in it or burned up in it. Lemonis i still want to know where was she going to go . Into a drawer . Lauri most people that come in, 9 times out of 10, if theyre not an established customer, were going to hear this i cant wear hats. But when you work with a professionally trained, classically trained haberdasher. Lemonis i cant take myself seriously in this hat. You know i look like columbo there, right . Or dick tracy. Who trained all these folks . You did . Lauri of course. Lemonis and how long is the training . Lauri six weeks and youve got i dont mind turning you loose on. Lemonis meaning you cant hit the floor and sell until youve gone through some serious training . Lauri oh, no, no. Lemonis i like the fact that lauri takes her craft so seriously, and she understands the importance of bringing employees on board and making sure that they really understand how to build value in the hat. She values Product Knowledge and training. Lauri if you notice people Walking Around austin and their hat looks right its not a chain store hat, its classically fit. Lemonis no, im not a hat wearer, but i do like the business idea of hats and the fact that she had hatbox. Com really gave me this belief that this could be much larger than a single store location. How you doing . Im marcus. Silas good. Im silas. Wonderful to meet you. Lemonis silas, nice to meet you. I have to tell you something. Your suit is rocking. Silas thank you. Lemonis you tailored it yourself . Silas yeah. Lemonis and so do you normally dress like this, or is it part of the uniform, part of the feel of the store . Silas no, i normally dress like this. Lemonis you do . Silas yeah. Lemonis very cool. Silas like as far as hats go, inherited hats young from, like, my dad, grandpa, and greatgrandpa. Lemonis in order for people to get an experience, you really have to live the lifestyle. I like the fact that silas had a lineage to hats and there was some history for him, and he really believes in the lifestyle, believes in the hat itself, and that shows me that shes hiring good people and the people that work there are really committed to what theyre doing. Silas i think youre probably a 7 1 4, 7 3 8. Lemonis i dont know, man. Im going to let you tell me. Silas so this is 7 1 8. Lemonis no. Silas too small . Lemonis yep. Silas 7 3 8. Sitting but a little large. Lemonis okay. Silas so i think you would be like a 7 1 4 long oval. We are out of 7 1 4. Lemonis okay. Silas but i can size this to make it work perfectly fine. Lemonis so lets do that. Im excited. Silas cool. All right. Lemonis what does the steaming do . Silas this warms it up so that you can shape it better. Becomes more malleable. Lemonis so that it can adjust so it fits my head. Silas yeah, yeah. Lemonis in todays day and age, particularly with retail being as tough as it is, you have to be able to communicate to the masses some experience that differentiates you from everybody else. The fact that hes got this oldschool steamer and hes moving it around. Thats something that if i saw it on instagram, i may want to check the place out. Silas im going to open up the front pan a little bit just to kind of match your jaw line here. Lemonis my fat face. Yeah, i got it. So youre really looking at the person thats here. As youre doing that youre thinking, what am i going to adjust . What am i going to steam . How am i going to make it fit their face . Silas yeah. And a lot of it is personality. So, like, you kind of read people a little bit. Lemonis i mean, literally youre changing the entire shape of it. Silas yeah, yeah, yeah. Were going to work on the shape a little bit. Lemonis okay. Silas i put a little this is lemonis little dimple in it . Silas yeah, when theres two its called a snake bite. And so i put one in there. Its just asymmetrical. Its kind of a conversation starter but not too much in the front. And then i brought this. I put a mule kick in back just to lower the back of the crown a little bit. Lemonis the amount of Product Knowledge that he has is almost overwhelming for me. It really is a very specialized craft that makes it difficult for other people to compete with, which may make it a good investment. That fits way better. Silas right . You feel it taking up a little bit of space in the back . Lemonis yep. Totally different. Silas and give me a rocker. Lemonis it actually feels like its my hat now. Silas yeah. Ill do one more thing for you. Lemonis ill tell you something. I would pay a little extra to have something fitted because i would feel like it was customized for me. It has a perceived value. How much more would you pay for a particular product if you really believed that it was customized for you . 10 . 20 . And so that extra little time and labor that may cost a fraction would expand your margins dramatically. And so as you think about your own experience in your own business, anything you can do to raise the perceived value, whether its that experience, the packaging, the way you were greeted, the Product Knowledge, all it does is expand the margins on what could be perceived as a commoditized product. How do you compete with that . Like, if you opened up a hat store down the street, you better get these folks to help you. Im definitely a cowboy. Lauri heres the issue as i see it. Over the years, ive developed certain techniques such as the mule kick and the pontiac and things that i consider to be my signature shapes. What i saw in marcus hat that disturbed me was the dimple in the front. If i saw that hat walking by outside, id offer to fix it for someone. Ive never approved it, ive never seen it, and for it to go out and represent my signature line of hats, its emotional for me. At hatbox, we do things my way. Silas the dimple isnt one of our approved hat shapes . Lauri ive never seen it before. Silas ive seen it before. Lauri yeah . Silas yeah. To me it looks unique, but its work, its your work and your store, so ill just stick to your hat shapes. Lauri thank you. Lemonis sometimes an owner has to really walk the line between following the process that they train on and the Sales AssociateBuilding Rapport with the customer, but as a bystander, as a customer watching this, and as a potential investor watching this, red flag number one. Lauri i dont want to limit your freedom. Lemonis but i do. Lauri . But i do. Lemonis lets just be honest. You got a ton of freedom as long as you dont do it the way you want to do it. Lauri too far. Yeah. Lemonis im not agreeing with you, by the way. And look, im just a spectator. What i can tell you as the consumer going through that experience with him, i was a pleased customer with my experience. I thought, in my opinion, i thought he represented the brand well. I thought he represented the store well. I thought he represented you very well, and hes very professional, and he looks amazingly professional. And he was able to take a bad situation of no size for me, and he was able to make Chicken Salad out of chicken [bleep] by the way, silas, you can come work with me anywhere because if youre going to put that level of dedication and genuineness into the customer experience, i dont care what youre selling. Hes just trying to serve the customer and hes walking the line between taking care of lauris customers and generating revenue and being scolded by her. Why dont we do this . Can you and i, lauri, lets go take a walk outside. Lauri okay. Lemonis okay . Lauri okay. All right. I can use some fresh oxygen. Lemonis lauri, you got to chill out. Lauri i know. Lemonis whats your deal . Lauri oh, why am i this way . How far back do you want to go . Lemonis if youre looking to take your business to the next level, log on to theprofitcasting. Com. Lemonis what youre deal . vo and millions of americans are struggling to put food on the table. So wells fargo is helping our neighbors feed their loved ones. Using some of our locations as driveup food banks. And helping provide 50 million meals for americans in need. The unthinkable has happened. Now its time to rethink how to make a difference. Wells fargo. Start your day with secret. Secret stops sweat 3x more than ordinary antiperspirants. With secret, youre unstoppable. No sweat try it and love it or get your money back. When their growing family meant growing expenses, our agents helped make saving on insurance easy usaa. What youre made of, were made for. Usaa lauri oh, why am i this way . How far back do you want to go . I have constellation, or complex, ptsd. Lemonis posttraumatic stress disorder. Lauri exactly. My life has been multiple consistent complex episodes of intense violence and trauma. Lemonis what are the examples . I need to know that. Lauri when the door was on sixth, i was held up at gunpoint five or six times. Last time, after katrina, i had a knife at my throat for 45 minutes. So, things outside my ability to control the situation are internally disruptive for me. But i get revved up. So im a complex posttraumatic stress disorder survivor. Lemonis i have unbelievable sympathy for everything that youve gone through, however it doesnt give you permission to look at me it doesnt give you permission to rattle people because you were rattled. Lauri am i doing that . Lemonis you did it in there a little bit. Out of all the businesses ive ever been involved with, i had never experienced something this deep and th