tv The Profit CNBC July 6, 2019 1:00am-2:00am EDT
just not this one with this guy. . >> tonight on the profit... >> marcus, nice to meet you. >> i go inside jacob maarse, a high-end florist and gift shop in pasadena, california that hasn't earned a profit since its founder died in 2010. how much money will this business lose this year? >> close to 200,000. >> sloppy business practices... do you have an inventory system? >> no. >> together with lax management has driven down sales and piled up debt. so are we going the right way? >> i believe so. >> we need to know where we're going. if they don't make changes, this 47-year-old family business will be forced to close its doors. this business is a total mess. i'm fighting against time to light a fire under these people... this is the thing that will help us go from the red to the black in one month. before this business crumbles and dozens of employees are out
on the street. you don't know how to manage this place. >> well...[blathers] >> my name is marcus lemonis, and i fix failing businesses. i want 25%. you're gonna make a decision now. i make tough decisions... you're being demoted. back them up with my own cash. it's not always pretty. get your ass back here right now. this is business. i do it to save jobs, and i do it to make money. this is the profit. [upbeat music] ♪ jacob maarse florists is a pasadena institution. for 52 years he was the go-to florist. the business made millions supplying flowers for presidential inaugurations, celebrity events, and the annual rose bowl parade. when jacob died in 2010, his son hank took over the business. it's been a very tough transition. hank has struggled to lead.
>> there'll be some growing pains. um... so, well, first of all, i'm on the top, i'm the president, i'm the owner. >> just three years later, revenue is down and those profits have turned into losses. last year maarse generated $3.6 million in revenue but still showed a loss of $20,000. >> between the prices and the disappointing product, i don't know that i would keep coming back. >> to keep the business up and going, hank took a $200,000 loan from his mom and borrowed another $100,000 from the bank. >> i would agree we're not making money. >> right. >> hank hasn't made a profit in three years, and he's $300,000 in debt. that's not a good sign for the 30-plus employees who depend on this company to earn a living. the flower industry generates $6.5 billion a year, and i want a piece of that. if hank maarse is willing to follow my lead, i know i can turn this place around and show profits within a very short time.
there is so much stuff in here. the layout of the store makes absolutely no sense to me. i mean, there is merchandise everywhere. seems like a lot of stuff. >> [laughs] >> like, you don't even know where to look first. i see candles, i see greeting cards, i see lotions. how could you possibly sell anything if the customer can't find what they actually need? confusing your customers is an absolute guarantee that you will lose money. burned-out bulbs and cobwebs. it's filthy. it's dirty. this is ridiculous. no arrangements here. nothing. i've been here for over five minutes, and i don't see an employee anywhere. anytime i go into a business and they don't greet me within the first five minutes, i turn around and leave. hi, guys. well, there you are. >> hello. >> i'm marcus. >> david. >> there's barely any flowers on display. and the floral designers, well, it's like they've hidden them in the back. why wouldn't you want to put your most important asset front and center? do you know where i find hank?
as i walk through the store, i don't understand where hank is. does anybody know where hank is? this guy's supposed to be the business owner? he's asked me to come, and i can't find him anywhere. probably has his hands full with something. if this was my business, i'd be out front and center, especially if somebody like me was coming to help. >> i'm accustomed to the old school. we had a very good management. >> some of the reviews i was reading online is that the business really changed after jacob's passing. >> yeah. people come in here and say, "what's happened to jacob maarse?" >> would he have allowed that? >> no. no. >> hello, i'm marcus. >> hi. marina. >> how are you? >> both: nice to meet you. >> you've been here how long? >> close to ten years. >> ten years? >> i love working in the store. i grew up here. i mean, i got married here, i had a child here, it's a dear place to me, and jacob was a wonderful man. >> are you responsible for the showroom? >> yes. >> so why would all the bulbs be burned out? >> we've been working on getting new light fixtures.
>> and the cobwebs, those are from halloween? >> probably. >> left over from halloween. >> some of these things are definitely long overdue. so anything that's gonna make the business a lot more successful and give a different twist to it, i'm all for it. >> you think there's too much stuff in here? >> yeah. >> do you guys think you have good inventory management? >> inventory management--um, as far as knowing what's coming and going? >> when i meet a general manager, i expect them to understand the fundamentals of business, especially inventory. you have to know what you have, how much it costs, what you're selling it for, how old it is. all those things add up to making money. if you don't know it, how are you supposed to make money? hank, i'm marcus. >> marcus, nice to meet you. >> nice to meet you. how are you? >> thanks for coming by. doing well. thank you. >> you've got a beautiful shop here. >> thank you. >> lot of history. >> a lot. >> by the way, that's a killer picture of your dad. >> thank you.
>> when you took over officially--your dad passed two years ago? >> yes. >> is that when you officially kind of stepped in? >> yeah. >> how much money will this business lose this year? 100,000? >> no. less. >> and last year? how much did it make or lose? >> last year was 20,000. >> 20,000. and the year before? >> a loss of 20,000. 40,000. >> and if you had a couple bad months and you ran out of cash, what do you do? >> get a loan from the officer. >> your mom? >> yes. >> okay. and how much would you say she's put in here in the last... three years? >> probably close to 200,000 as loans. >> is that the only debt on your books? >> and we've used our line of credit at the bank. >> how much is that? >> 100,000. >> that's tapped out? >> yeah. >> over the years i've met a lot of second-generation business owners. what i'm concerned about here is hank's mother continues to write checks to keep this business open. when you walk in the front door, if i said to you, "okay, what is this place?", how would you
describe it? >> flower shop. >> you would say a flower shop. >> and gift shop. [laughter] >> and what else? and candle shop. is selling flowers the most profitable? >> to be honest with you... i don't know. >> you know you got to know these numbers, right? >> yeah, i know i do. >> okay. does your mom ever ask you? >> no. >> okay. oh, my goodness. there is so much inventory in here. what do you think this is? >> yeah. >> the warehouse looks like they've stockpiled five years' worth of inventory, and it's unorganized. you know how many are in this pallet? >> uh... uh... >> hank has no idea what's going on around here. there is merchandise that's been here since hank's dad was running the place. how do you keep track of all this stuff? do you have a good inventory system? >> we have a book that we go along with. >> handwritten? >> oh, yes. >> so none of this stuff is in a computer or any sort of inventory system?
>> no. no. >> wow. when you have inventory sit around for years and years, while it's depreciating, it's just like burning money. is there a location in l.a.? >> there was. >> when did this one close? >> ten years ago. >> you closed ten years ago and you haven't taken it off yet? now where's the phone number? or who do you call? >> i didn't like having the phone number on it. >> you don't want anybody to call? >> mm-mm. >> no, 'cause that would mean business would go up and you'd have to work harder. >> right, and then i'd have to work more and buy more flowers. >> okay. >> yeah. >> hank is so lax about how he runs his company he can't even be bothered with putting a simple phone number on his van. he jokes about it, but, if he doesn't change his ways, more than 30 people could lose their jobs. maarse does over $3.6 million a year in sales. and flowers account for 3/4 of that. and since most of it is delivered, i need to get out and see if this delivery process is actually working.
i went online to learn more about this business, and the one thing i noticed, there are a lot of complaints about the deliveries and the products once they got there. how many miles on this, do you know? >> this van? 116,000. >> how's it run? >> it runs pretty good. >> does the air work? >> the air in the van doesn't work, and you're in southern california? how are you supposed to deliver fresh flowers in 90-degree heat? no wonder people complain. so are we going the right way? >> i believe so. >> chris, we can't do it that way. we need--we need to know where we're going. >> i'm kind of an old school, analog guy, so a map book provides an overview of the area as opposed to just "turn left, turn right, turn left" kind of stuff. >> their delivery process is extremely archaic. >> this isn't legal, but i'm doing it anyway. >> they have no gps. they use a map when they're gonna leave the store. they have no routing system. no wonder these deliveries are late. is this it? >> no. this is 69. >> so we passed it?
>> we did, 'cause i was too busy yapping. >> maarse spends over a million dollars a year buying flowers, and 10% of that, $100,000, is thrown away. a better delivery process and working coolers will cut that number in half. >> don't hit the cat. el gato. [meowing sound effect] >> jacob maarse is marginally unprofitable today, but it wouldn't take much to return it to its glory days. a few small changes, and this place would be wildly profitable again. so you have a business that has a broken process, a good product. your mom puts money in the business, and you have to run most of the decisions by your mom? >> yes. >> and you're 49? >> yes. >> how's that sound to you? it sounds pretty [bleep]. >> um... >> let's pretend for a minute that your mom didn't want to write any more checks. what would happen to this business in a year? >> i don't know. >> running a successful business requires the three ps--people, process, and product. and maarse has a great product. but their process is lacking. i think it's a direct result of
the people, especially hank. and people could be the hardest thing to fix. so do you agree that you need a financial partner that's not your mom? >> yes. >> do you agree that you could use a business partner that's not your mom? >> mm, i don't know that i would want to have a partner. >> you have one now. >> well, my parents, yeah. but i would like to maintain 100% ownership here. >> hank called me here because he wants my money, but what he really needs is my expertise. but this business can only succeed if hank's willing to change his ways. hank, let me be very clear. you need some help, and you need it now. you're gonna keep calling your mom every time you have a problem? am i wasting my time here, or are we about to get down and get to business? which one is it? coming up... marina, look, i don't think hank is making this very clear. you're being demoted. and later... you have no idea about your inventory. >> this pile of stuff is sitting here, and we still don't know
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>> am i wasting my time here, or are we about to get down and get to business? which one is it? is that your mom? >> yeah. >> is she coming here to help you negotiate? she's the real check-writer, right? so why don't we bring her in? hank's not the decision-maker here. very nice to meet you. >> to meet you. >> he may own 100% of the stock, but he doesn't even own 1% of the decision-making. in my brief day here--i was asked to come here by hank. i want to be very clear about that. i've concluded that this business is a total mess. and, mrs. maarse, i wish jacob could be here, because i'm sure jacob would throw me out. but the difference is is that i don't think things would be this way if jacob was here. hank, look, if you continue to do the same thing, your business is gonna close at some point.
i know that she can afford to write checks forever because she doesn't want her husband and her name-- >> absolutely. >> okay, mrs. maarse, what i'm telling you is, if you continue to write the checks on a monthly basis, he will never have to fend for himself. he needs someone like me to hold him accountable for poor performance. i don't think you're willing to do that, and i understand why. but i have to tell you that that's not the way to run the business. so i'm gonna give you my offer. >> okay. >> okay? i'm gonna give you a check for 100,000. for this $100,000, i want 25% of the profit so that i'm incentivized to help you grow your business with you side by side. >> i was thinking more of 20%. >> hank, look, my time is valuable. i don't have time to be doing this all night. 25% is really the number that i need that incentivizes me to do the things that i think need to be done. investing in businesses is always a risk.
but i always gear my offers towards minimizing my risk. there's over $400,000 of inventory here, so my $100,000 offer is safe. if this deal goes bad, i know for certain i'll get my money back. and you understand, for the next week, i'm 100% in charge. last year, maarse lost $20,000. but i know with a few tweaks, we can go from losing $20,000 to making $1/2 million very quickly. i'm so confident that i can make a difference, i'm writing a check. >> is this a now or never deal? >> you're gonna make a decision right now. >> all right. i'm okay with that, for one week. >> but all i ask is that you don't screw me. you don't take my money. >> we're not the type. >> yeah, you won't find anybody that-- >> well, why did it take you a while to say that to me? your mom said it right away. why did you have to think about it? >> i'm just surprised you would
even say something like that. >> well, sure, you have to say things like that. >> yeah. >> we have a deal? >> this is all done on the handshake? >> is your handshake not good? >> mine is. >> yours is good? >> always. >> okay. we have a deal? >> deal. >> now that they've shaken my hand, i'm done being a nice guy. i'm gonna test them and their businesses in ways they've never been tested before. let's get to work. >> all right. >> thank you. thank you again. could all of you join us? we're gonna have a store meeting. profitable businesses need three things: the right process, a great product, and good people. here, they need help with all three. my name is marcus lemonis, and some of you have seen me around. and i'm here to help fix this business, so people don't lose their job. there are 32 employees relying on this business for their livelihood. and ever since jacob's passing, they're starving for leadership. for the next week, i'm in charge. so what we're gonna do is we're gonna make some massive changes,
and, at the end of this week, we're gonna have a grand reopening. we're gonna let our customers tell us if we've gotten it right. i need to get rid of excess inventory, make time-saving changes, and i need to organize what's left. in order for that to happen, i need to put in the right system, like a bar-coding system. this building looks terrible. maarse has a viable product here, but, in order to make it good, we need to display it to the customers in a way that's appealing. they need to see it, and it needs to be presented in a less-cluttered, less-disorganized manner. the entire store needs to be re-merchandised. we're gonna become profitable together. so, marina, you have something you'd like to say? >> i am extremely excited to see what's gonna happen. and the fact that we are gonna honor jacob's name is extremely close to the heart. >> hank. >> um, i don't know. i'm just excited that we're gonna actually live up to the legacy that they began. >> that you began, your family. >> that my family began, yes. >> okay?
so let's go get to work. thank you. what i want to do is have you guys understand what i think is the single biggest reason that the place loses money today. i want to actually make an arrangement. this simple exercise that i'm asking hank and the team to do isn't complicated. i want them to take a typical arrangement and break it down into parts and pieces so we know what we're selling the product for and how much each piece costs. this is the thing that will help us go from the red to the black in one month. >> marcus has a good reputation as far as a businessman, but i don't know that he necessarily knows the flower business. so that's yet to be seen. >> somebody called in a $75 order. >> well, i'm do--this is 85. >> 85, okay. >> it's an actual order. >> so there's two things that go into this arrangement--raw materials and labor. how much is the bowl? >> ten. >> how much is your time? >> 15 minutes. >> 15 minutes at 20 bucks is how much?
>> $5. >> so now we're up to $15. okay, keep going. how much are the hydrangea? >> the hydrangeas are $3 each for the white. >> so now we're at $33. how much are the tulips? >> $15 a bunch. >> okay, so now we're at $48. >> one bunch of hyacinths, they're $15 a bunch. >> okay, now we're at $63. >> i'm gonna do garden roses. >> how much is that? >> 2.50 each. >> 7.50? we're at $70.50 right now. >> three stems of lilac. lilac is $60 a bunch. >> so we'll call it $3 for this discussion? >> sounds good, yeah. >> so we're at $81 in cost. so if you're selling this for $85, you know what, good job. we just made $4. pricing at jacob maarse hasn't changed in years. the cost of materials has gone up, but they haven't raised the price to the retail consumer at the same time. so if you look at a simple arrangement, and the cost used to be $75, and now the cost is $85, you can't price it at $85.
you have to move the numbers up appropriately. these margins aren't acceptable. we can't make money that way. can you grab this with me? we're all working to get this warehouse cleaned up. and i want all hands on deck to get ready for this re-grand opening. is raul here today? >> he was asleep. he kind of forgot. he's coming right now. >> employee tardiness costs business thousands of dollars each year. not only is it bad business, it's not gonna happen on my watch. i talked to erick about raul... >> mm-hmm. >> who's not here. >> right. >> people can kind of not show up, and they would just kind of get away with it? as general manager, marina needs to set the tone. and showing up for work late is not acceptable. and having the employees respect you is more important than having them like you. do you know what this thing costs? >> our cost? >> yeah. >> no. >> marina's the first general manager i've ever met that doesn't understand her business. do you know what your sales per
square foot are? >> no. >> have you ever even thought about that? >> no. >> have you ever even heard that phrase? >> no. is that bad? >> what kind of general manager is this? the thing that i really want you to do is build a team around you. and i've been here a couple days. one thing that glares for me is that marina is not your general manager. she's not gonna be after today. there's a need for a retail manager. this is the right job for marina. it's not facility. it's not worrying about the pricing or inventory. it's just selling and taking care of customers. do you agree with that? >> yeah. it's a hard process. it's a lot of work. and i'm not a real, uh, disciplinarian, get-in-your-face person. >> and if marina doesn't cut it in this new role, then unfortunately she's gonna be out. marina has not proven to me she's capable of being a general manager. hey, marina, can hank and i borrow you for a minute? >> yes.
>> okay. she doesn't understand the basic inventory functions. she doesn't understand the profit and loss statements. she can't be a general manager in my world. it's important, hank, that marina understands from you with a more clear job description and how her wage is gonna tie to that. >> i agree. >> what do you want her to do, long-term? >> okay. sales, weddings, parties, whatever. >> anything that goes through the register, right? >> right. >> does she need to mess around in the warehouse anymore? >> no. >> does she need to be in the plant department? >> no. >> does she need to worry about if the air-conditioning's broken? >> no. >> all that stuff, relieved. how does that make you feel? >> am i completely being withdrawn from the staff? 'cause usually now the employees will kind of report to me, and then, if it's a bigger problem, i'll go to him. so is that still gonna happen? >> i would like you to still be responsible for that. >> okay. >> well, that's different than what we talked about. hank and i had an agreement that, when marina came in, he was gonna demote her himself. but the minute marina came in, he caved.
marina, look. i don't think hank is making this very clear. and it's hard for him, because he has a longtime relationship with you. for me, this is business. and from my perspective, you're being demoted. you are no longer the general manager. >> why is that? >> i don't know if you're qualified. >> what makes you feel that way? >> quite frankly, i don't think that the people that work here have any discipline or any structure. and am i supposed to blame hank, or am i supposed to blame you? you're the general manager. who do you want me to blame? >> the blame would be on me. >> well, then that's why you're being demoted. >> i don't know where marcus is coming from. he doesn't know everything that i do in the store. i work hard everywhere that i've been. and that's how i've been taught. that's how i've been raised. but hank just doesn't take action. and that adds a lot of pressure. [sobs]
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still nervous about buying uh-oh, la new house.meone's is it that obvious? yes it is. you know, maybe you'd worry less if you got geico to help with your homeowners insurance. i didn't know geico could helps with homeowners insurance. yep, they've been doing it for years. what are you doing? big steve? thanks, man. there he is. get to know geico and see how much you could save on homeowners and renters insurance. >> when hank and marcus demoted me, it was hard, but he's the business expert, and, you know, i still want to do everything in my power to keep, you know, the family business going. >> i want you to see the lines of sight, okay? >> right. >> and we want to have clear lines of sight, so when the customer comes in, it's inviting. if there's one thing i know about a business, appearance matters. so i'm gonna reorganize the store and change the layout,
because that's the only way we're gonna make money. we have everything here from vases to lamps to flowers to furniture to candles to wallpaper to greeting cards. >> okay. >> all i'm thinking about is customer flow and ease of access to product. the first impression in the business is the only impression that matters. so i'm bringing in some designers to help me reorganize the store and re-merchandise it. if the customers can find the inventory, they can buy it. and that's how we'll make money. there are workers everywhere around here. electricians... >> i'm going to get you light fixtures. >> okay. i'm looking for this thing to be as bright as day. not only is this building old, but it hasn't been maintained in years. i'm replacing fixtures, wiring, everything you can think of. we are installing security cameras, so i'll be able to literally, on my phone, click something and see all the different cameras. the security cameras are gonna tell me what departments are busy and which ones aren't and the traffic patterns of the customers. i also ordered gpss for all
the vehicles. i've put a new inventory system in place, so i know where all the inventory is. all of it's input, and now we're in the right century. i'm replacing the filthy flooring with fresh, new carpeting. we're replacing the absolutely ridiculous plastic windows with glass. we're also de-cluttering the inventory by moving things into a brand-new sale section in the warehouse. we're gonna turn this inventory, and we're gonna free up our cash. that fixture, this fixture, this fixture, and this fixture all go into the warehouse. >> marcus took a lot of stuff out of the store and just kind of dumped it in the garage. this doesn't seem like a great plan at all. i mean, i could've taken all the stuff out of the store and just put it in the garage and then called it a day, so i'm not sure what we're doing or what his idea is. >> hey, i see you guys. one of my ideas is to make sure that, when the customer comes in, they can see all the floral designers along the left-hand side. what do you think, david? better? >> good. i definitely think the changes are for the better. it's been a long time coming. i am very happy.
>> we'll go right to the garbage. >> is there a way--'cause we've talked about this--to, like, frost that window? so that way you can't see. >> yeah. >> 'cause it looks real--i mean, the floors do look trashy when you're walking that way, especially if we're throwing-- >> you're saying all the way down? >> yeah. >> i like that idea. great job. really great job. let's start working on that. i was worried about how marina was gonna handle her demotion. but i have to tell you, i'm pleasantly surprised. she seems very committed, which proves to me that she cares about this company. >> this is really, really nice. i think now you know you're in a flower shop. >> okay. i feel really good about the progress these team members are making. and the vibe in this building is the best it's ever been. >> good. >> we'll get these tables set up so that tomorrow morning, when the fresh-cut stuff comes out, this power aisle will have the right stuff here. so i think we're good. >> i'm not sure that the store looks that much better. so my confidence in marcus right now is kind of wishy-washy. >> okay? >> all right. [clears throat] >> yes? no? >> well, when the store opens, i
don't want it to look like we're going out of business or-- >> or renovating stuff? >> or somebody came in and stole the tables that the arrangements go on. >> hank, why don't we go just chat? maarse has over $400,000 of inventory, and over half of it has been here for years. we need to liquidate the bad stuff and reinvest that cash either in paying off our debt or buying inventory that sells. you're tired. it's been a long day. you're frustrated. you're seeing all your cash sitting out here, and you're thinking to yourself, "this guy came in here, he took all the [bleep] out of my store, and he's acting like it's not worth anything." am i pretty close? >> well, you took it all out. and now it's in the garage. and now what are we gonna do? this is all the new stuff. how long is this gonna sit here? or are you gonna tell me what to do with it? >> don't get frustrated. but when you say to me, "everything's new--" >> 90% of that cart is new, yeah. >> how about that cart? 90% of that cart? >> with the exception of the luggages and this, everything
else is new. oh, and those lamps. >> the paintings are new. the metal's new. >> i got to tell you guys, you have no idea about your inventory. >> yeah, but that doesn't clear the fact that this pile of stuff is sitting here, and we still don't know what we're gonna do with it. >> hank has no idea how much merchandise he has. sitting on dead inventory will lead to bankruptcy. if we want to avoid that, we'd better get rid of the stuff that doesn't sell. it's got to go now. i want to make it easy. is this new? >> no. >> what else? coming up... >> so what do you think, since you've been here before? >> really beautiful. >> so you think you'll be coming back? >> oh, yeah. >> and later... >> no, i'm not [bleep] kidding. >> you're gonna try to tell me that i didn't put money in your business? >> i don't know what you did. >> you better call your mama and get my money back. i can't tell you who i am or what i witnessed,
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if you're gonna make money in retail, it's not only what you sell it for, but it's also what you buy it for. credit card? if hank takes my advice and takes cash to the flower mart, i think he can pick up 10 to 15 points of margin on what he buys. well, maarse buys $1 million a year in flowers. so just with that simple advice, i think he could pick up $100,000 to $150,000 in profit. 70% of second-generation businesses fail in this country. i need to figure out if hank really is committed to this business and if he really wants to be in it. early indications tell me that he doesn't. tell me how you think you did before we got here. >> as far as? >> as a business owner. >> i mean, to be honest, between you and me, i've felt terrible for the last, i don't know-- >> couple years? >> at least, yeah.
>> well, you got to be a little sick of it. >> yeah, completely. >> i mean, the stuff that we're doing, the 100,000 that's been spent-- >> i think you've spent more than that. >> how much do you think i've spent? >> i think you've probably spent, like, 150,000. >> now let me ask you a question. have i come back to you and asked you for anything for it? >> no. >> and have i even brought it up? >> no. >> why? >> 'cause you believe in the business. >> that's exactly why. the business has a ton of potential. i think the worry i have, and i didn't tell this to anybody else, is that i don't think you want to do it anymore. you're a really good guy. but you are a really, really [bleep] businessperson. >> [laughs] well, i hope you're not gonna put it like that. >> do you agree with it? >> i don't know if i'm a real [bleep] businessperson. >> are you good? >> i think i'm pretty good. >> i'm sensing that the weight of his father's success is
a little too much for hank to handle. >> i mean, you know i'm gonna make money eventually. it may take you 30 years to get back your investment, but you know i'm gonna make money eventually. >> did you actually just tell me that it's gonna take 30 years? >> [laughs] >> oh, my god. as i look at these vans, i can't understand why hank doesn't have the phone number on them. so i ended up wrapping all the vans with not only new artwork, but the actual phone number and website. the new van, check it out. >> unbelievable. i love the way it's going around the whole bottom of the truck. it's very classy. >> wow. >> yeah, it's fantastic. and the telephone number's on there. oh, it's beautiful. >> you are? >> i like this look specifically 'cause it's new, and it's different, and it's contrasting. >> i think it's awesome. it's very vibrant. eye-catching, very elegant. >> instead of the decal being a photograph, i would've done it in a painting instead, 'cause it's easy to buy this online or
wherever and just slap it on the truck. >> we have a grand opening today. and all i'm getting from hank is dissention. all this hard work's finally coming to an end. i'm excited about the re-grand opening. >> it's good having marcus around. he's just got energy and ideas, and they bounce off the room. and everybody gets excited. "what are they gonna do next?" and i love all the changes. >> i think him coming here has been absolutely fantastic. i think it's great. and i think it's what it's needed for a long, long time. >> whoo-hoo. >> i love the windows with the pictures of roses on them. and i like things not being in front of me so that i feel included with all of the other designers. >> tell people to come in here. >> okay. >> and tell them we're having a
re-grand opening. >> okay. >> quickly. be back in, like, ten minutes at most. run. >> we're just doing a re-grand opening. i've invested close to $150,000 so far to fix this business. we've made over the whole store. and i'm having a re-grand opening today, so that i can have the customers actually test-drive the new process and the new product and tell me if they like it. >> have a great weekend. >> thank you. >> the decor inside has changed a lot. i love shopping here. [laughs] >> the store is definitely inviting. i noticed a lot more pre-arranged flowers to choose from. they had a great variety today. >> so what do you think, since you've been here before? >> really beautiful. >> no, it feels good, yeah. >> so you think you'll be coming back? >> oh, yeah. >> in a typical year, maarse averages about $10,000 a day. so far, this business has done $13,000 today. that's almost a 30% increase in business. i'm happy with the progress. and there's a clear standout.
marina's doing a great job. >> and i think it's terrific. >> you do? >> i do. it's bright. >> right. >> it's cheerful. >> she's really taking this leadership role seriously. she's interacting with customers. >> thanks for coming in. >> you're welcome. >> take care. >> she's doing all the things that, quite frankly, hank should be doing. have you seen hank? >> i saw hank not too long ago. >> a successful business owner subscribes to one theory. they show up first, and they leave last. do you know where hank is? >> i don't know. i don't know if he's gone home or what. >> i cannot believe he left. not only is it disrespectful to the employees, it's disrespectful to all the customers who are coming here today. he really left? like, he's gone? >> as far as i know. >> he literally disappeared. i'm pissed. oh, hey, hank. where'd you go, buddy? we have a grand opening. hank, i don't understand why you left.
this is [bleep] ridiculous. you need to [bleep] come back here. i've been here for a week. i'm doing all this stuff. this is ridiculous that you left. turn the car around, get your ass back here, and be a leader right now. for business advice and extra scenes from the show, go on to cnbc.com/the-profit. [ dogs barking ]
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right now. hank has turned out to be a real disappointment. not only walking away from his re-grand opening, but his unwillingness to make the changes necessary. he's pushed me on everything. he doesn't want to get rid of old-age inventory. he doesn't want to take cash to the flower mart. he doesn't want to raise prices. i need to make sure there's a leader in place. and that leader, for me, is marina. i will tell you that, based on what i've seen since the day where you were taken out of that job, you are a totally different manager. i've watched you interact with the employees. i've watched you discipline them properly. i've watched you work. and you fought through it, and you said, "you know what, i'm not gonna worry about the demotion. i'm not gonna worry about anything else. i'm just gonna do my job." that's the attitude that i saw. you should be very proud of yourself. >> well, thanks. >> in my opinion, you know, you need to clearly be the leader when hank's not here and even when hank's here. there's no question about it. >> thanks. >> anytime i'm testing a leader,
there's one thing i want to see. will they stand side by side with me and do the same work? well, this week, marina did that. congratulations. >> thank you. >> you earned it. it's been a couple days since the re-grand opening, and i've talked to marina. she tells me business is really picking up. more importantly, the new systems that we put in place, well, they're making things not only more efficient, but morale's at an all-time high. today, i showed up for a meeting with hank, who said he needed to talk. it'll be the first time we've seen each other since he took off before the re-grand opening. how you doing, buddy? >> good. how are you? >> i'm good. what's the good word? >> well, it's been a disruptive two weeks. i appreciate your effort, but whatever you tried didn't really work. between you and me, i'm not gonna take your deal. >> why is that? we had a handshake on it. >> yeah. i mean, there's a lot of stuff that you promised that didn't go through. >> like what? like what? >> well, you said you were gonna give us 100,000. >> i spent over 100,000.
>> well, i don't know what you did--spent. i mean, i didn't see anything. >> how much do you think i've spent? >> 150,000. >> you didn't see all this being spent? >> oh, i saw some lights and stuff going up. that was about it. >> you saw some lights? >> i saw some-- >> how about the gpss that went in the vehicle? how about the inventory system? >> i saw some-- >> how about the camera system that went in? >> i saw some graffiti being painted on the garage. >> how about the new glass being done in the front of the-- >> well, a couple panes of glass is not worth $100,000. >> hank, are you [bleep] kidding me? >> no, i'm not [bleep] kidding. >> you're gonna try to tell me that i didn't put money in your business? >> i don't know what you did, 'cause you didn't show it to us. >> would you like to see it? >> well, it's too late now. >> why is it too late? >> we had a deal, and you didn't do it. and you said business was gonna go-- >> you're kidding me. >> 'cause sales didn't go up. >> in a matter of two days? >> you said-- >> that's 'cause you're never here. >> you said a week. >> that's 'cause you don't know how to manage this place. >> well, that's your opinion. >> so you're telling me--you better call your mama and get my money back. my experience with usaa
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>> sales didn't go up. >> in a matter of two days? >> you said-- >> that's 'cause you're never here. >> you said a week. >> that's 'cause you don't know how to manage this place. >> well, that's your opinion. >> so you're telling me--you better call your mama and get my money back. jacob maarse hasn't turned a profit in years. i've turned this place around in one week. and one thing i know for sure, i care about this place more than he does. why did you choose to take this path? >> because i don't think it's a good deal for us. >> then why wouldn't you just call and say that? >> because i wanted to do it in person. >> this way? >> well, it's kind of your style. you know, i learned from you. >> you're a punk, hank. >> wow, thanks. >> when hank maarse decided to back out of the deal, i wasn't disappointed. i was pissed. >> hello. >> clara?
>> yes. >> hi, this is marcus. how are you? when you and i first talked, you told me that, if i spent the money and you didn't want to do the deal, you'd give me my money back, so i would like my money back. i mean, he's gonna have to get it from you, obviously. perfect. >> why are you talking to my mom? mom, you don't have to talk to him. >> but she actually was-- >> i'm handling it. >> she was actually on speaker. >> what did you tell her? >> you know she can't--i'm telling her what happened. i'm telling her that you don't want to honor what we agreed to. >> right. >> 25% of the profits. >> 'cause you didn't honor it. you said you'd do it in a week, and you didn't. >> no, i said i was in charge for a week. i didn't say the world was gonna change in a week. >> well, you pretty much made it sound like it was, and it didn't. so you happy now that you had to call my mom to do that? >> well, i had to call your mom. i mean, it's her decision. >> no, it's my decision. >> hank, it's your mom's decision. >> no, it's not. okay, are you done now with her?
thanks, mom. i'll handle it. >> yeah. >> you just hung up on your mom now? >> why are you calling her? you can't handle it? you can't deal with me? >> for the first time, you grew a set of balls? >> i don't know. are you checking? >> actually, i'm looking for 'em. i can't find 'em. >> okay. well, whatever. >> you don't make a deal with someone and then renege. that's not how it-- >> yeah, i know. >> hank, you know what, i'm not gonna waste my time dealing with somebody-- >> you didn't keep up your part of the bargain. >> i'm gonna call your mother. don't touch me. you told me that you thought i spent 150,000, which is not the number, by the way. >> yeah. [scoffs] >> well, why did you say it, then? >> i didn't say that. you probably said it. >> hank, it came out of your mouth. >> no, it came out of your mouth, marcus, just like a lot of stuff comes out of your mouth. >> so you're telling me this place-- >> "sales will go up 200%." [muttering] well, it didn't happen. >> hank, are you 49 or 14? >> 49. >> really? >> yeah. thanks, marcus. >> hank, how would your dad feel about you doing something like this? somebody comes in, they put money in with a handshake. do we have a deal? they work their ass off.
we try to make this nice thing. if you want to change the deal, you should be a man about it. but to tell somebody they did nothing. >> i'm not saying you didn't do anything. >> your dad would be frickin' embarrassed of you. >> i'm not saying you did nothing. i'm saying you didn't do what you promised. >> get out of my face. you're a thief and a liar and a cheater. look, i've made real changes here, but, at the end of the day, you can't fix a person who just doesn't get it. in one week, i spent about $150,000, fixing the systems, repairing a broken-down building, putting things in place that i know not only fixed morale, but they fixed the business. hank made a big mistake. he mistook my kindness for weakness. this wasn't a charity. this was a business deal, and he shook my hand. so i'm gonna put a lien on the building, and i'm gonna do whatever it takes to get my money back, make no mistake about it. (male announcer) welcome to a paid presentation
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