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tv   The Profit  CNBC  July 4, 2017 8:00am-9:01am EDT

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"... mary ellen: that's pretty. i like that. lemonis: ...a family has sunk their life savings into their swimwear company... i leave here inspired by your story. ...only to find themselves out to sea. i mean, you guys are, essentially, out of business right now. that's a lot of pressure on you. there's no clear leader... charlie: i've kind of run the show. -mary lou: no. -mary ellen: [ scoffs ] lemonis: ...no design process in place... charlie: i just don't have the time. chuck: no, you did. you did. you absolutely did. lemonis: ...and now, there's no money left either. mary ellen: they have put their finances into running this company. i don't want to see you guys lose everything. mary lou: i don't want you to worry about me. lemonis: if i can't help them swim with style, it won't be long before they go under. -mary lou: i'm afraid. -lemonis: listen, listen. listen, come on. -mary lou: i'm afraid. lemonis: my name is marcus lemonis,
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and i risk my own money to save struggling businesses. we're not gonna wake up every morning wondering if we have a job. we're gonna wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's gonna change. everything. but i do it to save jobs, and i do it to make money. this... let's go to work. ...is "the profit." ♪ chuck: let's take a look at this because this fits well. mary ellen: yeah, this looks great. lemonis: swim by chuck handy is a family-run swimwear company focusing on plus sizes. -mary ellen: how does that look? -chuck: yeah, i like it. lemonis: chuck founded the company in 2010 when his wife, mary lou, complained that plus-size swimwear was hard to find. chuck: i love the cut. it's very slenderizing. lemonis: chuck was one of the leading salespeople in the swimsuit industry for decades. but when he started this company, he appointed himself a designer. with his son and daughter at his side, swim got instant traction by focusing on plus sizes.
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-mary ellen: how do you feel? -charlie: i feel good. mary ellen: yeah? lemonis: but success was short-lived. chuck's colorful suits weren't connecting with consumers... mary ellen: our traditional customer is a lot more conservative. this is just so left-field. lemonis: ...leaving the business with even fewer dollars for inventory. charlie: i'm gonna have to tell her that we're gonna be able to do business. so what the freak am i going to do? lemonis: today, with debt piling high and their life savings on the line, this family business is in danger of evaporating. -mary lou: that's piss. -chuck: bull[bleep] lemonis: the u.s. swimwear industry generates more than $5 billion. and with their focus on plus sizes, i see a giant opportunity, so i'm headed to their office in miami to learn more. chuck: how do we have a print like this, and someone is sending us this? mary ellen: i think you're barking up the wrong tree, trying to buy us out. -young male: okay. you say, "tomato." i say, "to-mah-to." lemonis: what's happening? i'm marcus. -mary ellen: hi, i'm mary ellen. -lemonis: mary ellen. -mary ellen: nice to meet you. -mary lou: mary lou.
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-lemonis: mary lou. chuck: call me chuck. lemonis: chuck, nice to meet you. -chuck: pleasure to meet you. -charlie: charlie. lemonis: okay, so you guys are brother and sister. -mary ellen: yes. -lemonis: is this your dad? -charlie: correct. -chuck: c.e.o., designer. charlie: when i go home, at the dinner table, he's my old man. he's my dad. i love him to death. in business, it's chuck because i'm going to get a little emotional. lemonis: and who's in charge? charlie: i kind of run the show. mary ellen: i mean, the loudest person usually does. lemonis: the loudest person. charlie: i think everyone can agree. -mary lou: no. -mary ellen: [ scoffs ] charlie: everyone comes to me. i'm the one person that you all communicate to. lemonis: and whose name's on the door? -chuck: oh, my name. -lemonis: okay. just wanted to clarify that. it doesn't say, "swim by charlie handy." chuck: no. lemonis: do you have a business card? charlie: yes. lemonis: vice president, that's you. and then... mary ellen: fit, tech production, and sometimes sales at the trade shows. -lemonis: how about yourself? -mary lou: i'm a teacher. -lemonis: okay. -mary lou: full-time teacher. lemonis: this is a side job. mary lou: this is nights. lemonis: and so how did you get into the swim business? -chuck: great question. -mary lou: chuck got a job with another company to do their sale. they wanted to expand to their swimwear. he was there 20 years. he made a lot of money doing really well in sales, so he came up with a concept
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that's a swimwear with a matching cover-up. and they didn't want that, so he's always had this dream to have his own company with his children working with him. i'm overweight, and i always used to lament, "there's not fashion suits for larger women." chuck recognized that, so he said, "let's focus on this because our idea, everything has a matching cover-up." chuck: i've always been designing for her. lemonis: very cool. so is this everything? charlie: this is it! pretty much, this is the office. lemonis: and what happens in here? who works here? mary ellen: i live in new jersey. my dad, my mom live in new jersey. -lemonis: we're in miami. -mary lou: we're from miami. chuck and i met in high school. we're high school sweethearts. lemonis: okay. mary lou: chuck, in 1976, went to new york because his family had a swimwear business, and then, i moved to new york. and we always thought we would come back here. lemonis: and why haven't you? mary lou: because i have the job. i have the income. i have the health insurance. lemonis: so why doesn't the business move to new jersey if you guys can't move? mary ellen: my brother was here. he went to college here. he stayed here. it just was convenient at the time. mary lou: and we just kept it here. -chuck: yes. -lemonis: okay. any time you split the operations in different cities, you're potentially gonna have
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a high level of inefficiency. also, typically, the fashion world is either east coast, based in new york, or west coast, based in los angeles. and so one of those two choices isn't miami. can i see the product? is there a warehouse or something? mary ellen: yes, yes, yes, yes, yes. this is the warehouse. charlie: this is where we bring all the merchandise in from china. lemonis: and then, in new jersey, are there offices? -mary lou: in our home. lemonis: so this is the only office. mary lou: correct. one of the things we set up here is a trade show booth. charlie: you see this trade-show booth? this guy does it. i do it with one-day laborer. i bought it all at ikea. -i picked it out myself. -lemonis: okay. one of the ways that you can differentiate yourself from your competitors is by having a trade-show booth that really elevates the brand. it creates an environment for the buyers to visualize it in their store. but when i see lawn furniture and lattices and poor lighting, well, it's no wonder why they've struggled. lemonis: do you guys have anybody that could try this stuff on? i'd like to see how it fits. charlie: we're gonna show you this one sample. lemonis: how are you, ma'am?
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chuck: the nice thing about this suit is that it's more towards at-leisure wear. lemonis: how comfortable is it? be honest. woman: oh, i like it. it's very sporty. lemonis: there's two things that i wanted to think about when i looked at the swimsuits -- what the fit and the shape and the material was gonna be like... mary lou: we're very proud of our fit. -lemonis: is it comfortable? -model: yes, very. lemonis: ...and then what the prints and the colors would look like. do you like this suit? model: i like that its high-waisted. lemonis: the prints, in my opinion, they were hideous. the color palettes seem somewhat outdated, and when you look at current designs, it looks like these prints are from 10 years ago. honestly, the beautiful model saved the bathing suit. which one of you determines the print? -mary ellen: dad. -lemonis: and which one determines the color palette? -mary ellen: dad. lemonis: and what do you use to determine your color palette? chuck: i do a lot of shopping. we shop neiman marcus. we shop bloomingdale's. we shop nordstrom's. lemonis: but you're a season late because those trends are now. chuck gets inspiration by visiting a retail store. well, what's on the shelf now is from a year ago.
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colors change, styles change. who's going to want to buy last year's print? nobody. this is a traditional swimsuit. all right? what does this cost to make? chuck: now, that's cost us 9 landed. lemonis: 9 landed -- wholesaling for? mary ellen: $23.50. lemonis: what does something like this sell for retail? -chuck: $109? lemonis: 109? are you selling for too little? mary lou: he sells it too cheap. he gives them a deal. lemonis: if a retailer sells a bathing suit like this one for $100, they would expect to buy it wholesale for around $50. instead, chuck is trying to create this fire-sale atmosphere, luring them to the product by selling it for $23.50, essentially walking away from an additional $26.50 of gross profit on every single unit he sells. while i'm in favor of the retailer making more money, i'm also in favor of the company that i'm considering investing in being profitable as well. so where is the rest of the inventory? charlie: right over through here.
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lemonis: but it's in this warehouse. charlie: yes, everything is kept here. lemonis: so that, on the wall, is the entire company inventory? -charlie: mm-hmm. lemonis: so how much should be in here? mary lou: oh, a lot more. lemonis: how much should be in your inventory? chuck: normally, 25,000 pieces. -lemonis: 25,000 minimum. -chuck: normally, yeah. lemonis: and how many pieces are in here? charlie: 800 pieces. lemonis: and you can't afford the inventory to make it work. -charlie: correct. lemonis: if you want to clearly see the consequences of poor margins, just look around this room. this company has virtually no inventory. this scares me. why are you here, ultimately? mary ellen: i'm here to help my dad, and i want to be cutting-edge in design. lemonis: what's your professional background prior to here? mary ellen: i was a tech associate, technical designer for dressbarn. -lemonis: you were designing. -mary ellen: yep. and i went to school to be a designer, and that's kind of where my heart is. it was sad -- it was sad to leave that because i really did want to try and -- -lemonis: why did you leave? mary ellen: i wanted it for him. i'm the one that's in new jersey. i see my parents struggle. financially, my parents have no money left to put into the company. it's really hard. -lemonis: it is hard. mary ellen: you can ask any of my family members. my dad always picks up the tab.
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he's the most generous person you'll ever meet. like, i don't want that stress on them anymore, you know? it's hard on me because i just... i want it to work so bad. lemonis: yeah. mary ellen brings a high level of process and understanding of what it takes to be in the fashion world. chuck doesn't have a process. his idea is that he's gonna go to a department store and copy ideas that are hanging on the rack and then go try to peddle them to the same buyers that bought the product six months ago? wrong process. your brother seems like he's got some energy. mary ellen: [ laughs ] that's a way to put it. lemonis: how do you guys communicate? mary ellen: not as effectively as i'd like. he doesn't understand how much work goes into what we did. i mean, he's in miami, in south beach. -i don't know. -lemonis: maybe going back home would be, not only good for business, but it would be good for him, potentially. i want to sit down and go over the financials. okay? mary ellen: yep. lemonis: so let's look over 2015 first. lemonis: 2015, you made $759,000 in sales,
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$253,000 of gross profit, which is 33%, which is terrible. the total expenses are $289,000, which leaves net income of negative $36,000. 2016, you made $777,000 and lost $40,000. i mean, you guys are essentially out of business right now. chuck: it's immeasurably hard, and it isn't that it's hard on me. i know it's hard on her. mary lou: no, it's not. chuck: and that's what hurts me the most is that i know i'm letting her down. -mary lou: no, it's not. -chuck: it is, and that's what hurts me the most. mary lou: it's very hard for a man not to be the main provider. you know, he does everything for us, and i'm just very upset about that. if he didn't work, then it'd be one thing, but he works 24/7. lemonis: i just need to dig into the numbers. i'm going to take the numbers with me. mary ellen: of course. lemonis: it clearly is a family effort. i leave here inspired by your story. chuck: thank you. -mary lou: thank you so much. -lemonis: nice meeting you.
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very nice meeting you. thank you. ♪ the financial health of the company is definitely a red flag, but i love the space that they've identified in the void in the market, and you can't buy or teach passion. what i have to determine is what do i think the business is really worth and what do i want to get for it because the risk here is high. but if it works, the payoff is huge. i was originally attracted to this business because i saw a company that is family-owned that decided to enter the plus-size market. but the business doesn't have any working capital to speak of. it's done 3/4 of a million dollars two years in a row, and it's lost about $40,000 each year. there's no inventory. there's no real design process. what is here other than a fantastic idea with a proof of concept?
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mary lou: [ sighs ] this has been his dream. it is very hard. chuck: it's not easy for me taking you down. believe me. mary lou: you're not taking me down. i took myself down. -chuck: no. mary lou: i made choices. i made decisions. mary ellen: they have put their finances into running this company, and i'm not gonna stop until something finally breaks. you can't just put everything and then have nothing to show for it at the end. i don't want to see you guys lose everything. mary lou: i don't want you to worry about me. mary ellen: it just can't all be for nothing. chuck: it's a struggle just to survive to pay bills. lemonis: that's a lot of pressure on you. chuck: oh, it's insurmountable. lemonis: it's not insurmountable. it's overwhelming. i do think the business needs structure. who is the boss of the business today? chuck: well, that's -- it's really me. lemonis: you are? charlie: i think so. mary lou: [ laughs ] mary ellen: i respectfully disagree. charlie: i have to... i bear the brunt of a lot. mary ellen: i respectfully disagree. charlie: you -- mary ellen: no. sorry. charlie: okay. you can respectfully disagree. mary ellen: the boss is the person whose name is on the door. -charlie: that, luckily, it's my name, as well. lemonis: coming up...
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what do you think's gonna go wrong? mary lou: i don't want them to screw up so much. and i'm afraid. i'm afraid. -lemonis: listen, listen. listen. -mary lou: and i'm afraid. they don't understand. i'm afraid. -charlie: okay. -mary ellen: all right. dearthere's no other way to say this. it's over. i've found a permanent escape from monotony. together, we are perfectly balanced. our senses awake. our hearts racing as one.
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charlie: you can respectfully disagree. mary ellen: the boss is the person whose name is on the door. charlie: that, luckily, is my name as well. mary lou: [ laughs ] -chuck: i disagree. -lemonis: who's the boss? -chuck: me. -lemonis: okay.
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i want to, kind of, get to the point, okay? the business doesn't exist today other than a fantastic idea with a proof of concept. i'm intrigued by serving a market that i think is under-served. i want to do business with you guys. -mary lou: you do? -chuck: i'm listening. lemonis: my offer is $650,000 for 55% of the business. and, to be crystal clear, i'll be the boss... -charlie: i'm okay with that. lemonis:...not you... charlie: that's fine. lemonis: ...'cause i have no problem firing your ass. charlie: that's fine. go for it. i would love it all day. -lemonis: and i may even give your sister permission to fire your ass. charlie: hustle me as hard as you can with this. lemonis: so i see the $650,000 making the company debt-free and making sure the company has access to capital to buy inventory. and we want to make sure we have a good amount of money for product development 'cause this business cannot solely be in the women's bathing suit business.
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i think the company also needs to have an office -- not in miami, not in your home -- with a showroom of some kind, and you can show people things. mary lou: like you always did, honey. lemonis: you can have designers. mary lou: you're right on target. lemonis: so... we have a deal? -chuck: we have a deal. -mary lou: i do the hug. -lemonis: okay. -mary lou: mama hug. -lemonis: okay. mary lou: thank you. -lemonis: we have a deal? -charlie: we have a deal. -mary ellen: absolutely. -lemonis: thank you. chuck: thank you. we won't let you down. chuck, this is great. lemonis: i'll see you guys in a little bit. mary lou: okay, thank you. ♪ ♪ -lemonis: hi, guys. -mary ellen: how are you? -lemonis: how are you? -mary ellen: good. lemonis: fashion happens both on the east coast and the west coast, so i wanted the family to come out to my l.a. showroom where some of my fashion brands are. it's clear to me that there's a real flaw
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in chuck's design process. his idea of roaming the aisles of a department store isn't exactly research and development. so the first step in getting this done is to have a focus group. ♪ -charlie: hey, guys. -stephanie: hello. lemonis: so this is really all about doing research. i brought in the president of my entire fashion group. her name is stephanie menkin. we're gonna get some feedback from all of our participants. what i want to hear from these ladies is what they think of the colors and the fabrics and the sizes and the patterns. and then, i want to take that information and actually put it into action. all right, we're going to bring the model. if the model can come in, that would be great. ♪ chuck: so this is a suit i designed. it has adjustable straps. it's a scoop front. it has a matching cover-up that we ship with it. lemonis: what do we think of the print? woman #2: for me, i would totally love that pattern with a full black suit... woman #2: ...or that suit with a full black exterior. lemonis: do you like the fact that it's sold as a set, or would you prefer it individual?
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woman #2: i don't dig buying anything as a set, personally. i don't know. i like the option of being able to mix and match. woman #2: i think you have an opportunity to make more money by offering mix and match. chuck: see, i would tend to disagree with you. many major labels that are currently being sold right now on one website, we're just killing them all because of the set. lemonis: let's bring in the next model, please. ♪ woman #2: i have to say one thing about the matching prints. they don't really match perfectly. it's a little off. woman #3: the color blocking, just a little hint of the blue right in, you know, that area. [ laughter ] stephanie: yes. lemonis: so that, to me, is a design issue. let's bring in the last model. ♪ how are you? -woman #4: good. how are you? lemonis: how does the bathing suit feel? woman #$: it actually feels really good, and it has full coverage in the back, which i do appreciate. lemonis: is there anything you don't like about it? woman #4: the biggest thing would be maybe, like, the pattern because it's just a little much.
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lemonis: who doesn't like the print? woman #1: i think, right now, that the patterns are speaking to an older crowd. -woman #5: i agree. maybe not a grandmother, but in someone in that age range, i agree, might like that. -woman #1: i agree. woman #5: they like the brighter patterns. but someone younger... lemonis: on a scale of 1 to 10, how do you feel about the prints? woman #6: i'm at a 3. woman #1: 5. 5. woman #5: i'm agreeing 5. lemonis: 5? woman #7: 4 or 5 for me. woman #2: 2. stephanie: i'm with you. 2. woman #8: you said, "swim by chuck," right? -lemonis: chuck handy. -woman #8: so if i hear swim by a guy's name, i might start thinking, "why is he creating swimsuits?" mary lou: what about michael kors? woman #8: but michael kors is a purse versus a swimsuit. it just -- do you get what i'm -- do you see where i'm going towards? stephanie: you buy spanx 'cause it's made by a woman for a woman, right, because she understands. -woman #1: exactly. lemonis: look, the focus group didn't hate everything they saw. what they do like is the fit of the suit, the fabric, and the coverage it gives. but they thought the designs fell flat,
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and they didn't love the name. i need something that's gonna wow people, something that the buyers, both retail and wholesale, will say, "i've never seen this before. how do i get it on my shelf?" thank you, ladies, very much. mary ellen: thank you so much. ♪ lemonis: how are you? we are here to see lisa and kate. they're expecting us. i had one more stop for the family while we were in los angeles. i wanted to take them to nydj, a very large manufacturer of women's apparel. they specialize in plus sizes. in order for the handys to understand how to move their business forward, i want to introduce them to a company who has had real success in the plus-size market, not only how to develop the product, but how to market to a very specific customer. this is the start of having you understand what i'm looking for. take a minute to look at the images. everything has a purpose, and we've got to put a story together. kate: this is part of our fit to be campaign,
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which really is rooted in customer intimacy. lisa: i think women want to, maybe, imagine themselves on vacation where, maybe, they're with their family or their with their girlfriends so that they're actually with other people around them, as well, so that it doesn't feel like the lone model, that she's posing. mary ellen: i think it's great to make it more relatable with a mother, daughter or someone who's a little bit overweight and underweight so you have, in one image, two people that are different. these are things that i've seen before and we do need to implement. charlie: we've done group photo shoots, but we didn't concentrate on that because that wasn't really where our target was falling into. we rented a yacht. we rented an r.v. i want women to feel like this model is on their vacation, kind of just lounging. lemonis: charlie did you pick up on what lisa said, though? i didn't sense that you actually listened to it. she was saying that she rarely, if ever, puts somebody by themselves. did you understand why she said that, though? charlie: i don't understand exactly, no. what do you like to use pairing up? lemonis: well, she told you. you didn't listen to her. charlie: excuse me.
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lemonis: i want to work on our listening skills. i want to make sure that you're processing these things. charlie, can you grab a brochure of ours to show them what it would look like? you didn't bring it with you? -mary lou: it was a mix-up. lemonis: i always love how your mother answers for you. i will never challenge any mother getting involved to defend their son as long as it's on the school yard and not the boardroom. i know you have a tendency to always try to mediate the situation and defend. you can't save him all the time. what are you afraid of? what do you mean? come here. mary lou: [ sniffles ] oh. lemonis: what do you think's gonna go wrong? -mary lou: they're not perfect. -lemonis: what do you... mary lou: they're not perfect. they make a lot of mistakes. lemonis: what do you think's gonna go wrong? mary lou: i don't want them to screw up so much, and i'm afraid. i'm afraid. -lemonis: listen, listen. listen. -mary lou: and i'm afraid. mary lou: they don't understand. i'm afraid.
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lemonis: coming up... some new and fresh ideas. chuck: it's harsh for me. i'm not crazy about the print at all. lemonis: my biggest concern with the company is i don't really think of you as a designer.
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i guess they don't want you driving around on three wheels. smart. with liberty mutual new car replacement™, we'll replace the full value of your car. liberty stands with you™. liberty mutual insurance. mary lou: and i'm afraid. they don't understand. i'm afraid. this is so stupid. -lemonis: no, no, it's not. mary lou: that's not what i wanted to be here. lemonis: listen. shh, shh, shh, shh. ultimately, we want them to learn. mary lou: you're right. you're right. lemonis: and they may get a little bruised, okay? mary lou: thank you. lemonis: yeah. -let's go back in there. -mary lou: okay. kate: you have you campaign. mary ellen: yep. kate: you have your sales. you have your e-comm. -mary ellen: mm-hmm. kate: those all need different types of messages and imagery. mary ellen: i think we need to really set time and develop who our customer is and look at her outside of her swim and what other things that she likes so we can tap into her, maybe, emotionally, a little bit more. lemonis: lisa and kate, thank you very much. -lisa: we wish you success. -lemonis: good seeing you again. lemonis: today, i'm meeting charlie down in miami. it's time to consolidate this business
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and get everybody under one roof. this warehouse needs to close, and you need to go back to new jersey. charlie: me being up there makes more sense. ♪ lemonis: now that we're out of miami, i want to get the ball rolling meeting new suppliers, new manufacturers and making new contacts in our soon-to-be new home of new york city. if you made this in china, what would it cost? chuck: that, probably around $15. rigoberto: manufacture here is going to cost $18. lemonis: i think most people would sort of scratch their head and say, "why would you spend more to make it here?" i'll give you my answer. -chuck: yes. lemonis: the minimums are lower. the lead times are quicker. -chuck: yes. lemonis: and you can put your hands on the process from start to finish as opposed to send it all over e-mail to china, and it comes back and hope it's right. historically, the company would manufacture its swimsuits overseas. on the surface, it sounds like a good idea because it's cheaper. but is it really cheaper? once you go back and forth across the ocean
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to make any adjustments and you don't get the product produced in time to meet the market, didn't time just really cost you money? we are gonna go to curve, a trade show. it's in three weeks. so new name, new trade booth, new garments. curve is one of the largest trade shows in the world that specialize in swimwear and lingerie, and it caters to all shapes and sizes. if there was a perfect place to launch a new company and a new brand, this is the place. -lemonis: thank you very much. -rigoberto: any time. my pleasure. -lemonis: thank you so much. ♪ -lemonis: come on in. -chuck: it was locked. hey. -lemonis: come on in. -chuck: wow. lemonis: with curve right around the corner, i wanted to take the design process to a world-class level. and the number-one complaint that everybody's had, including me, is the prints. i've decided to bring in another company that i have an investment in, printed village. it's a platform that connects companies like swim with artists that can create unique designs
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that can be applied to any fashion garment, changing it and making it revolutionary and cutting-edge. why wouldn't you want to have a body and a bank of artists from around the world as opposed to one guy? woman #1: hi. i love to do prints with animals. birds are always on trend. mary ellen: i like the twin print 'cause it coordinates with the same colors, but it is not matchy-matchy. lemonis: do you like the color palette? chuck: no, i'm not crazy about the suit. woman #2: so this is a marble design, and marble is super in right now. chuck: you're not gonna convince me. the white on the skin is a tough thing. woman #3: hi, everyone. this is my first design. it's along that tropical line. i'm using minimal color, so i thought i'd take it in a more, like, simple direction. lemonis: do you like it, mary lou? mary lou: yes, i do like it. i like that. -lemonis: charlie? -charlie: that's a good one. chuck: i'm not sure about the yellow and the purple. in some areas, it's harsh for me. woman #4: so this is inspired by moroccan tiles. charlie: oh, wow. mary ellen: i love it, how you have it placed on the towel. chuck: i love the color palette. i'm not crazy about the print at all.
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mary ellen: historically, we sell to the buyer's needs, and that buyer is a middle-aged, older mind-set. and you're fantastic at selling them, but if we want to move forward and capture a younger audience, i think what you've done is beautiful. lemonis: what i will tell you, chuck, what does concern me, is you fall back to older a lot. any designer has to have an open mind about everything because designing is a collaboration, and after seeing the way he reacted to the work, it told me right there and then -- this guy can't lead the design process. i think my biggest concern with the company is the design process. it really has, historically, just been you coming up with ideas. chuck: without a question of a doubt. lemonis: your talent and your knowledge is impressive, but i don't really think of you as a designer. chuck: listen, if i'm gonna be the one out there pushing it and selling it, i need to have a reason to do that. i have a problem with giving control up. lemonis: for exclusives, extras and business advice,
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vi.com.
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chuck: listen, if i'm gonna be the one out there oscwe went back toing bithe drawing board...s. and the cutting board. we removed the added nitrates and nitrites, by-products, and artificial preservatives in all of our meat. every. single. one. why? for the love of hot dogs. i put everything into my business. and i had all these points from my chase ink card. so i bought ingredients, utensils, even made custom donut cutters. wow! all with points. that's how i created the ripple: the doughnut in a doughnut in a doughnut.
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suddenly it's everywhere. i mean, it really took off. what will you create with your points? learn more about the ink business preferred card.
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what will you create with your points? pushing it and selling it, i need to have a reason to do that. i have a problem with giving control up. mary lou: chuck always had the passion to do design, and i think it was okay. but we didn't sell a [bleep] load of stuff to say, "wow, this is awesome." you have to remember. what is your direct focus for the success of this company, which is sales? mary ellen: we're so ready to finally, hopefully, have someone with some answers to reorganize, and then, you can start to have those convictions with your sales because, lord knows, if we put a buyer in front of you right now to sell these prints, you'd sell the [bleep] out of every single one, whether you liked it or not. lemonis: your wife took a chance on you, and you want to deliver. chuck: completely correct. lemonis: i want us to be successful so that mary lou can be proud of you just like you, ultimately, really want her to be.
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chuck: i don't want to put this in any type of jeopardy. having some input, that's all i want. lemonis: chuck, you're in charge of the entire sales organization, top to bottom. i thought today's process was great. we now have a design process that we will follow. printed village will be our resource for designs. all right? you guys ready to go? okay. ♪ chuck: hey, marcus. lemonis: so i wanted to bring you to your new home. chuck: oh, my gosh. -charlie: this is insane. -chuck: nice and open. lemonis: and it's not done yet. it's a blank canvas, and i wanted you guys to make this your home as opposed to somebody doing it for you. charlie: it's just amazing. mary ellen: i didn't expect this. charlie: no, me either. mary ellen: i didn't expect it to be so nice. lemonis: what's wrong, chuck? chuck: i'm just a little overwhelmed. that's all. charlie: think of all those long hours you put in. chuck: [ sighs ] it's a lot. believe me.
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mary ellen: i mean, it's a dream come true for dad, everything he's worked for. chuck: well, honey, this is for you, too. don't forget that. mary ellen: now i'm just curious what name's gonna be on the door. charlie: what were you thinking? -lemonis: what was i thinking? -charlie: yes. -lemonis: okay, you ready? -charlie: yes. mary lou: we're ready. charlie: oh. mary ellen: reminds me of, like, the sun on the horizon. lemonis: day or night, that's why i split that. mary ellen: oh. lemonis: a woman thinks about her silhouette and wanting to have curve and wanting to have sex appeal, and it's a sexy word. -mary ellen: mm-hmm. -mary lou: no, it's nice. -lemonis: so that's one piece, and this is how i think about the brand today. so this is what exists today, and the goal would be to fill this box with other things that live in the siloett world. the way i want you to think about the business going forward, is the brand in the middle, and we're gonna create a pinwheel. a pinwheel is an array of products all focused around one core product. in the case of this company, it's a bathing suit.
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the goal is to design complementary products that can support the bathing suit, like hats, bags, towels, flip-flops. ultimately, that one single customer has more options to buy from this company, dramatically increasing the opportunity, ultimately, increasing the revenue. and, so, we'll be showing at curve in the next two weeks with our own booth. so mary ellen is in charge of design. and then, obviously, chuck, you're going to work on the entire sales strategy, the pitch, the pricing. charlie, your role is to build the trade booth. we'll have a 10-by-30 booth. we're gonna work on walls and displays and banners and point-of-purchase material and everything. charlie: no problem. lemonis: everybody has to have their role. i want to give them very clear direction with very clear tasks, put a process in place, and take the design process to the next level. charlie: aw, man. come hug me. we did so much work. we did it. we did so much work for this. ♪
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mary ellen: well, i wanted to talk to you about the generation of prints. jason: yes. today, we can finalize these prints, and if we're all good with them, we all sign off, then we can start sending them to sampling. lemonis: hi, guys. i made a special trip to the showroom because with curve being right around the corner, i want to know that they're making progress on the designs and on the trade booth and on the line extension. mary ellen: i have a presentation to give you on siloett, and i believe, the focus and design. lemonis: great, okay. let's see what you have. mary ellen: yeah, okay. so i have been thinking a lot about we started as a swimwear company, and what does that mean for our customer? our customer is someone who is wearing a swimsuit who is going somewhere. she's going to the beach. she's going to the bar. and what does that mean? what is she packing with her? what is she putting it in? and, you know, how can siloett make her life a little bit easier? so in terms of siloett,
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"a curated collection of getaway must-haves that only looks like you spent all month shopping." i mini-focus grouped a lot of my friends and said, "listen. tell me, when you go on vacation, give me things you need and you can't have." so i don't care if it's hats, sunglasses. we have bag fees, and people are trying to minimize what they're bringing. you don't have six shirts. you have one shirt that works, day to night. but now we're gonna go somewhere, right? we need a bag that holds it all. lemonis: okay. mary ellen: welcome to our bag, etta, siloetta. lemonis: okay. and she's the must-have travel bag. lemonis: i love that. mary ellen: so in terms of our customers and where she's going and who she is, this is her date night. this is her, you know, to the beach with flip-flops, another cover-up. so we can do a collaboration. so we do our scarves because, you know, everyone needs a scarf. she's gonna buy the black suit. at least, she'd get a little pop here. lemonis: i'm really impressed with mary ellen. not only did she start brainstorming new product extensions for siloett. she came to the table with mock-ups and ideas. and she started working with printed village right away to take their designs and incorporate them into her mock-ups.
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i designed everything that i thought i would want to wear and, like, couldn't live without. lemonis: as far as i'm concerned, she showed true leadership. and more importantly, her ideas, they're good. honestly, that encapsulates what i was trying to say and couldn't. love it. it feels organized. where is your presentation? charlie: i have it on paper, still. -lemonis: so it's not done. -charlie: correct. lemonis: it's been a week, by the way. charlie: dude, how much [bleep] i've been doing, i didn't have the time for this. i just don't feel like i have the opportunity. i just don't have the time. -chuck: no, you did. mary ellen: i didn't have the time either. chuck: you did, you absolutely did. charlie: i haven't got a chance to sit at a desk. lemonis: i know you're capable of more, but you've got to be honed in, and you can't let him rope you in. -charlie: i understand. -lemonis: did he rope you in? charlie: i wouldn't say it's his fault. lemonis: well, whose fault is it? charlie: it's my living situation. lemonis: what does that mean? charlie: i live in the house with my parents. lemonis: but it has to be somebody's fault. charlie: there's something constantly going on. i live in this big circus. duh, duh, duh. every morning, everything's going on. lemonis: coming up... charlie: i hired two people for the office.
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lemonis: i mean, seriously, man. would the booth have been built if two assistants weren't hired? -charlie: yes. -lemonis: yes. would the products have been made if the assistants weren't here? charlie: i with it sounds that easy. lemonis: is that easy.
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this is a story about mail it has to be somebody's fault. and packages. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪
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charlie: it's my living situation. lemonis: what does that mean? charlie: i live in the house with my parents. lemonis: it has to be somebody's fault. charlie: there's something constantly going on. i live in this big circus. duh, duh, duh. every morning, everything's going on. lemonis: did i just hear this guy right? this is a grown man in his 30s, and he's telling me he couldn't finish his project because his parents were making too much noise? that kind of stuff, honestly, makes me so crazy. where is your presentation? can i see it? -charlie: this is... -lemonis: let's go through it. charlie: this is my competitive advantage, the collaborative -- lemonis: so this is all you brought to the table? charlie: i have booth information. -lemonis: let's see it. -charlie: of course. lemonis: i know he's capable. i know he's intelligent. this is just [bleep] follow-through. this stuff, the whole trade booth, all the signage, all the tags have to be ready. charlie: correct. ♪ mary ellen: swimsuits are tricky.
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the closer you get to the body, the harder the fit is. -woman: yeah. -lemonis: i'm pleased with where mary ellen has started the process, but now the real work begins. mary ellen: when you have a double border running and you want the border to hit the bustline, it'll get a better yield. lemonis: she's developing new swimsuit styles with professional pattern makers. mary ellen: so undo that. lemonis: and she's working on the new fabrics and looks with printed village. mary ellen: you know what? i like that because now you flip this way, too, so i think we can change the background color. lemonis: she's also overseeing the sample process as the patterns get made on new fabrics and the products go into production. mary ellen: how you feel? is it, lengthwise, okay? woman: it feels great, yeah, very comfortable. mary ellen: my callout would be the bra is too big on you. -woman: yeah. lemonis: and mary ellen also developed new line extensions, such as cover-ups, to pair with the new collection. mary ellen: i love both of those. i see them both as swimsuit cover-ups, and i really do start to see them with, like, a brimmed hat. lemonis: this whole trade-show project is yours. meanwhile, charlie's designing and producing a new trade-show booth. i've given him a budget of $60,000,
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and this presentation will definitely elevate the brand. and finally, chuck is reaching out to some potential new retail accounts, generating buzz and enthusiasm over the new brand. ♪ curve is one of the largest trade shows in the entire world for swim, resort, and lingerie. i mean, the top vendors and the top buyers come to this. if curve goes bad, my $650,000 in this company is at risk. now this is a booth. the work that charlie did -- exceptional. i've never seen a trade-show booth look this good. charlie, you came through, buddy. charlie: thank you. lemonis: it ultimately looks like a real retail store with shelves and racks and real hangers. it may seem like a little detail, but it's a difference maker. what i give you a lot of credit for is you thought of every single detail...
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-charlie: the frames and the... -lemonis: ...all the way down to the chairs. -charlie: oh, yeah, the chairs. lemonis: and so you'll be able to take this to trade shows all over the country. lemonis: to see the colors and the prints and the patterns of all the different products, from shoes to hats to bathing suits, i was impressed. so can we go through all the product? i'd like to see every single thing. chuck: the collection -- start with the travel bag, etta. lemonis: is this bag available for sale? -chuck: absolutely. -lemonis: what does it cost? mary ellen: right now, it's $18. -lemonis: so the cost is $18? -mary ellen: yep. lemonis: the wholesale to the customers -- wholesale? -chuck: $60. -lemonis: $60? so a 70% margin. -chuck: there you go. lemonis: historically, swim underpriced their product. what i see now is a product that will retail for more and wholesale for more. that's how you improve margins. okay, next product. show me some bathing suits. okay. mary ellen: this goes with this... -chuck: oh, yeah, yeah, yeah. -mary ellen: ...cover-up. -lemonis: oh, my gosh. -mary ellen: the feedback we got was they don't want print on print. they want coordination. and so we felt this was a beautiful way to coordinate an element of the print into an all-over. -lemonis: how beautiful is that? -chuck: it's very expensive.
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that's what one buyers said, "i love your fabric." lemonis: because you invested in quality. chuck: made in america. mary ellen: this one is one of my favorites. lemonis: whose body style is this? mary ellen: mine. -lemonis: you designed this? -mary ellen: yeah. lemonis: god, these fabrics are ridiculous. how much easier is it to sell, chuck, this stuff? chuck: you don't really sell it. you just show it. lemonis: you're saying it sells itself. -chuck: yeah. -lemonis: okay. keep taking me through more. -mary ellen: all right. so we have this phenomenal print. chuck: which is gorgeous. -lemonis: this looks amazing. -mary ellen: this is beautiful. and what's nice, this really works well with any of the blue prints. lemonis: wow. it's amazing. you took a good printed village print and made it super simple. what size are you? -woman: i'm a 10. -lemonis: 10. is it comfortable? -woman: yes, it's beautiful. lemonis: and what does the wrap sell for? chuck: the wrap is selling for $35. lemonis: and what is the cost? chuck: $9. lemonis: that's a 74% margin. so how many different line extensions are there outside of bathing suits now? mary ellen: so we have the bags, the hats, the shoes, the scarves, the towels,
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swimsuits, and cover-ups. lemonis: honestly, it's mind-blowing that you're able to start with nothing, a warehouse in miami, and end up with a full booth that looks amazing. chuck: don't think it was all harmony. no, no, we had some late-night discussion that didn't exactly, you know... lemonis: like what? mary ellen: for instance, my frustration was yesterday. i was told that we running low on catalogs, so i called the printer and said, "hey. can you... how many can you print? i need 100." he says, "i only have paper for 80." so i said, "okay, fine." i heard from salma, his assistant. -we needed more catalogs. -lemonis: i'm sorry. your what? charlie: i hired two people for the office. -lemonis: why? -charlie: because these guys are running around, i couldn't get... not everything can get done. -lemonis: okay. well, let me challenge that for a minute. would the booth have been built if two assistants weren't hired? -charlie: yes, yes. -lemonis: yes. would the products have been made if the assistants weren't here? mary ellen: yes. lemonis: this is a start-up business that, months ago, had no inventory and no cash, and just because hundreds of thousands of dollars went into the bank account doesn't give everybody the liberty to just run wild. charlie: i had a lot on my plate. lemonis: stop saying that. so did everybody. -charlie: i understand that --
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lemonis: i have a lot on my plate. i don't have an assistant. i mean, dude, seriously, man -- and two of them? charlie: i wanted to make sure that this was executed and it looked its very best. lemonis: charlie, it wasn't like you were, with a hammer and a nail, building this yourself. charlie: i wish it sounds that easy. lemonis: it is that easy! if your business is in trouble and you need my help, log on...
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lemonis: charlie, [ intense music playing ] ], it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the e300 for $569 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. oscwe went back toing bithe drawing board...s. and the cutting board. we removed the added nitrates and nitrites, by-products, and artificial preservatives in all of our meat. every. single. one. why? for the love of hot dogs. introducing the easiest way to get gillette blades noo text "blades" to gillette on demand
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with a hammer and a nail, building this yourself. charlie: i wish it sounds that easy. lemonis: it is that easy! hiring assistants is not cool with me. charlie: there was a lot to get done! there was a lot to get done. lemonis: it's just like you saying to me, "i run the business." here's the deal. somebody's got to be in charge, and it cannot be you. it just cannot be you. the boat has to have one captain, and honestly, you know who should be leading that captain? mary ellen. charlie: she doesn't have the whole pie. she's never worked the whole pie. lemonis: she brings a woman's touch to a woman's product. what do you think? chuck: i realize that it's the best for the company, and it's the best for the family. lemonis: what do you think of that? charlie: i feel that -- sure. that's fine. lemonis: every business needs a leader. that doesn't mean that it has to minimize anybody else's role. mary ellen, who could talk the talk, proved to me that she could walk the walk. and the fact that she was able
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to get it done in a matter of weeks, it was flawless execution. and make no mistake about it. i see charlie as a real asset for this business. but frankly, he's got some growing up to do, and i want to see more from him because i know he's capable of it. i am proud of you, buddy. -charlie: thank you. lemonis: by the way, you see all these people shopping in the booth? they're here because you put together an amazing space. mary lou, i think that you should be able to end today feeling very good about your two children. mary lou: i do. as a parent, you don't want to let go. you don't want to let go, and it's time to let go, and you don't have to micromanage. you can give them a task, and they'll do it. [ laughs ] -mary ellen: just kidding. i'm still hugging him. lemonis: we're gonna write some orders today. chuck: we're going to write it, baby. ♪ chuck: first thing we want to provide you with is, you need a bag to pack. woman: this is -- it's really nice. chuck: this is beautiful. i love this. woman: i love that. yeah. so we'll do six of those. -chuck: six of this? the attention to detail with the crochet is beautiful. woman: this is great.
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charlie: what do you think of the pelicans here? chuck: that's a great body style. woman: see, i love that. chuck: and this is more classical. woman: that will always sell. i like that. -chuck: home run. lemonis: chuck is so good at selling it. he is able to sit people down and write orders. over $270,000 of orders were written in just 48 hours. that happens to be almost half of what they did all last year. chuck: we're gonna do really great things for you, marcus. i'm telling you. lemonis: group hug. good job, everybody. all right. -chuck: thank you, mark. lemonis: thank you, guys. mary ellen: thank you for saving our family. lemonis: the handy family proved to me that the investment in them was more important than anything else and that, given the right resources and the right tools, they would deliver a world-class product in a world-class environment with world-class presentation. -okay, guys. -mary lou: all righty. -lemonis: have fun! -mary lou: thank you. -lemonis: sell something.
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♪ lemonis: tonight on "the profit"... i've pretty much established that this whole thing sucks. at an iconic snowboard-and-skate shop in chicago... chris: in the summertime we do skateboards, stand-up paddleboards. lemonis: ...the owners are headed a nasty collision. this business looks like it's on life support. chris: i think things kind of fell apart pretty quickly up here. lemonis: their new location loses money hand over fist. there's nobody here. it's empty. their original location suffers from low margins and the wrong inventory. salena: it's about creating a reputation. lemonis: this business doesn't have a good reputation. did you know that? and now, their partnership is spinning out of control with two of the owners sidelining the third. chris: it felt like we financed your pregnancy

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