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tv   The Profit  CNBC  December 31, 2016 10:00am-11:01am EST

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lemonis: tonipatrick: hi!profit"... lemonis: the owner of an l.a. clothing company is known for his witty designs. lemonis: how much longer do you think kanye sells for? patrick: until he becomes president. [ both laugh ] lemonis: but the way he runs his business is anything but funny. your liabilities exceed your assets. his limited product offering has put a crimp in sales. woman: you guys have hoodies, or no? patrick: not right now. lemonis: his struggling storefront has been a drag on earnings. patrick: this is like my office. this is like my home. dan: but it's an expensive house. lemonis: despite his family's best efforts... kelly: he's the little brother. we're always trying to take care of him. lemonis: ... he's too afraid to tackle the problems. this is reckless. if i can't force him to face up to these hard truths... patrick: i mean, i don't want to be, like, sitting here just...
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lemonis: ...working? ...his brand won't just go out of style, it will go out of business. patrick: i'm just so [bleep] scared. lemonis: my name is marcus lemonis, 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." ♪ in 2008, patrick dilascia moved from new york city to los angeles to launch his namesake clothing brand, "dilascia." patrick: i want to have my life. i want to have my dream. lemonis: specializing in screen-printed t-shirts with playful designs, patrick built a storefront, a website, and -- most importantly -- accounts with big-name retailers, like nordstrom and barneys.
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and as his company grew, his siblings dan and kelly came to l.a. to pitch in. patrick: people are going bananas for them. lemonis: but then one of their biggest customers closed... patrick: kitson sold 600 a week of those. lemonis: ...putting the business and the siblings under tremendous pressure. patrick: why didn't you just call me in the first place and tell me? -kelly: i sent it to you. patrick: it's a [bleep] mess. lemonis: now their sales are slipping, their debt is climbing, and patrick's dream is in serious danger. patrick: oh, my god, you guys. dan: let people do their job, patrick. take their advice. lemonis: i've invested in several fashion brands in recent years. and in patrick's designs, i see some really fun ideas. if i can harness his creativity and get the business back on track, i'm confident we take dilascia to new heights. patrick: hello! welcome to dilascia. -lemonis: i'm marcus. -patrick: i'm patrick. it's so nice to meet you. lemonis: nice to meet you. i've seen this logo before. -patrick: mm-hmm. lemonis: i've seen it at barneys.
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i've seen it at nordstrom. -patrick: it's everywhere. this is kind of what made our brand super famous. i literally drew it on, like, a piece of paper. i'm like, "we have to make the plane look backwards and do everything in reverse print." lemonis: that is pretty cool. patrick: i'm originally from new york, and then i moved here, to los angeles. lemonis: where in new york? patrick: i'm originally from upstate binghamton. -lemonis: okay. -patrick: which is where we had our family bakery and our family business. d then i -- lemonis: you were a baker? patrick: my dad was. my dad lives in upstate new york. lemonis: and your mom? -patrick: is no longer here. -lemonis: she passed away. patrick: my mom died eight years ago this week, actually. lemonis: oh, man. patrick: when someone is dealt something like that and such a tragedy -- and she was super-young, too -- you can either go super depressed and put your head under the covers, or be like "[bleep] it, life is too short. i'm gonna live my dream and do exactly what i want." so, 10 weeks later, after my mom died, i found myself living here with no job, and i knew i was gonna have a clothing brand. lemonis: well, your mom would probably dig this. she would think it was cool, right? patrick: she probably would be pissed that i moved to l.a. with no health insurance or, like [laughs] i don't want it. i want to have my life. i want to have my dream. when i was 18 years old,
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i was working for american eagle in new york, and i worked in italy. i did sweater production for armani in italy, and then i got the job at burlington as a buyer. so, i bought for their 600-store chain, and my job was to make them cool. lemonis: okay. and then what's this? patrick: why does it say "tmz" on it? lemonis: yeah. patrick: so, i have a partnership with tmz. lemonis: is that a license, or how does that work? patrick: yeah, we have their license deal. we do all of their t-shirts. we come up with all the designs. so, if you click "shop" on the tmz website, it goes directly to our website. -lemonis: it does? -patrick: yeah. lemonis: the fact that patrick has these licensing deals is impressive to me, because if a strong brand gives dilascia the rights to its logo and name, they boost the perceived value of the apparel. it also means that patrick's a really good salesperson, because big companies don't just license their names to anybody. patrick: so, men's is our biggest part of the store, which is from here on. kids is probably about 45% of our business. men's is 35%. women's is the smallest at 20%. lemonis: the women's apparel market in the united states is twice the size of the men's market. but, oddly enough,
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it only accounts for 20% of patrick's business. it should be more like 50% -- at a minimum. where's the women's section? -patrick: this right here. lemonis: i would have expected to see more styles, more bodies. and what he is offering the ladies just isn't enough. man: so, these are all your girl stuff? patrick: all girls is right here. lemonis: he doesn't have hoodies. woman: do you guys have hoodies, or no? patrick: not right now. lemonis: the shirts are boxy. and there's not a real wide variety of fits. patrick: these... woman #2: i'm probably not a "teen." lemonis: if you're a woman looking for some options at dilascia, you're probably gonna go home empty-handed. -patrick: hi! -kelly: hi. patrick: hello. marcus, this is my sister, kelly. -kelly: hi, marcus. -lemonis: hi, kelly? kelly: pleasure to meet you. yes, kelly. -lemonis: nice to meet you. -dan: hi, i'm dan. -lemonis: dan, nice to meet you. -dan: nice to meet you, marcus. lemonis: so you guys all wear the stuff? -dan: yeah. -kelly: yeah. lemonis: now, is that a "ladies" body? kelly: yes, this is a "ladies" body. -lemonis: okay. -kelly: yeah. lemonis: i was surprised how small the "ladies" section was in comparison to the universe of fashion. kelly: i would love to do more feminine styles
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for girls and tweens. i think there's a huge opportunity there. lemonis: how much business do you do overall? total company. patrick: well, in 2014 we did $1 million. last year, we did $900,000. and now this year, 'cause of all the situations we're having, we're on track to do about $600,000. patrick: you know, one of our biggest retailers that we work with, kitson, is closed. lemonis: how much business did you do with them on an annual basis? patrick: on an annual basis, about $300,000. -lemonis: and they're gone? -patrick: gone. lemonis: so kitson was 30% of your business. patrick: easily. lemonis: to lose 1/3 of your entire business when one account goes out of business is way too vulnerable for any business to be. what that tells me is they don't have enough wholesale accounts, and i'm guessing that has something to do with their narrow product offering. and how much revenue does this store do? dan: does about $60,000 a year. this is a constant battle with my brother. he spends a lot of time here selling t-shirts and making small sales. patrick: yeah, but i'm also on the phone. this is like my office. this is like my home. dan: but it's an expensive house. [ scoffs ]
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lemonis: do you get paid? patrick: mm-hmm. $50,000. i've taken like three pay cuts this year, though. kelly: i was making that up until march, and now i'm not being paid. lemonis: so, you're not getting paid, either? -dan: no. -lemonis: nothing. do you have equity in the business? dan: no. lemonis: how is the equity split up? who owns the business? -dan: him -- 100% patrick: i own it all. lemonis: you own it all. how did the cash come into the company? dan: when my mother passed away, she left an inheritance to us. yeah, it was about $300,000. lemonis: a third, a third, a third? dan: yeah. lemonis: so how much money came out of it for this? -dan: all of his. -lemonis: $100,000... dan: ...is gone, yeah. lemonis: how much of yours went in there? -dan: about $20,000. -lemonis: okay. patrick: my brother has done everything for me, like, when i opened my first store. lemonis: well, what's the beef with your sister? patrick: i feel like sometimes you talk down to me and you feel like i'm a moron, when i'm the one that started this. so, i feel like you just came in and took over, like you were like, "this is how we're gonna do it." kelly: 'cause i'm here -- i'm here to get the job done. lemonis: what is your role, exactly? kelly: i'm able to cut through the chaos and get some things going and add that structure.
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patrick: i -- you definitely bring stuff to the company, but my opinion didn't matter. i had no voice. -kelly: you're wrong. patrick: even though i have done this for buyers. i've done this with the people. kelly: a lot of the processes are broken, and we need... lemonis: it's still not good, is it? kelly: ...to keep it growing. we had to look at doing things differently, and you needed to be open to that. dan: i feel like they're my kids sometimes, because i have to break up fights. it's that arguing, that is petty sometimes, that drives me crazy. kelly: and i didn't know what i was walking into when i got to this store, and almost babysitting that i had to do of my younger brother. as we were getting ready to come out here, and i was unpacking some things, i found a note from my mom that i had tucked in something, and it said "thank you so much for helping patrick out. that's what family's about." no one cares more than we do. our name is on it. and it's so frustrating 'cause we all want it to work so bad. you know, we grew up in a family business, we grew up working together, and this is -- this is everything. lemonis: why is it everything? kelly: [ sighs ]
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[ shakily ] because we put so much time and effort into it. [ sighs, sniffles ] it's been the best job i ever had, and i think when we're -- when we're good and we're making money, we work so well together. when times get tough and mistakes start happening, we are at each other. lemonis: what i'd like to see is where all of this is made. are you guys printing in the back? where do you do your printing? patrick: we print in our warehouse in downtown l.a. -lemonis: okay. patrick: so, we have our warehousing and our printer that we work with in the same building. lemonis: and so want to understand what the warehouse looks like, where the inventory is. ♪ what's at stake for you right now, with this business? patrick: my whole life. my whole life, i mean -- -lemonis: what does that mean? if this thing closes, what happens? patrick: i have nothing. i mean, i eat, breathe -- i don't -- i don't, like, do anything else but work. i've made my friends through this company. i don't have, like, a relationship. i don't have, like, kids. this is all i have. lemonis: it's clear to me that patrick has invested everything -- not just financially, but emotionally, as well.
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so this would be devastating for him... patrick: here we are. lemonis: ...if it doesn't work out. everything happens here? patrick: yeah, it's kind of like the central brain of the company, i guess. hi, guys. this is marcus. chris: i'm chris. nice to meet you. noel: noel. lemonis: noel, nice to meet you. is this your company? chris: yes. yes, it is. lemonis: what do you do for dilascia? chris: we do his silk screening. -lemonis: all of it? -chris: all of it. lemonis: and where are their screens? chris: patrick's on this side, and then our other customers. this whole wall's him? chris: most of it, yes. lemonis: and how much of this actually is the bulk of the business? let's say there's how many screens here? -noel: over 200. -lemonis: 200. and how many of them make up the bulk of the business? -noel: like 50. -lemonis: 50. and for every screen, 150 of them that got wasted, how much is that money thrown in the garbage? noel: probably like $175. lemonis: out of the 200 screens that patrick has designed, over 150 of them are useless.
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patrick pays his printers $175 for every screen they produce. with the ones that are sitting on the shelf collecting dust, that's over $26,000 that's gone to waste. but the losses don't just end there, because that's just the cost of making the screen. there's time that he put in to make each design, the cost of the fabric used to make the initial run of shirts, and the cost of storing those shirts. all told, i would bet that patrick's wasted over $50,000. to say his process is broken is an understatement. it's a disaster. did you bring the financials with you? -dan: i did, yeah. -lemonis: can we grab them? let's sit down and look at them. ♪ dan: this is year-to-date. this is last year. lemonis: okay, let's start with last year. so, $919,000 worth of business. $100,000 loss. where's the balance sheet?
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$45,000 of inventory, $6,000 of blanks, for a total inventory of $51,000. $16,000 of cash, bringing your total assets to $67,000. so, on the liability side, $198,000 of payables, $15,000 in credit card, $61,000 in merchant loans. $67,000 of assets minus $274,000 in liabilities. so, it's $207,000 in what's called negative equity. essentially, it means the company's insolvent. do you know what that means? -patrick: no. i'm screwed? -lemonis: no, but... [ scattered chuckles ] ...it means that your liabilities exceed your assets. patrick: right. lemonis: and so, typically, what happens in that model is people will then file bankruptcy. at the end of the day, the situation here is very simple -- dilascia? they're out of business. they just don't know it yet.
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store rent is $43,000. the store loss -- $31,382. kelly: the store's a fight. patrick: it's always gonna be a fight. lemonis: big fight? dan: for me, it's always been. it's probably the biggest one. patrick: you could not pay me $1 million to work out of that [bleep] warehouse. i hate it there. the creativity of the business -- dan: no, it doesn't. that's a lame excuse. patrick: it doesn't come from me sitting in that cubicle over there. dan: it doesn't come from there, patrick. it does not. patrick: where i get inspired. it's where i get inspired. dan: okay, but it doesn't come from there. lemonis: honestly, patrick, my biggest fear is how much are you willing to pivot and adjust? patrick: mm-hmm. lemonis: what i'm potentially buying into is a guy who... patrick: ...is crazy? lemonis: you're not crazy. you're creative. [ laughter ] you have good licenses with tmz. i see value in that. you have a lot of contacts with a lot of big boxes, and so there's a recipe there. i'm not investing in a pile of t-shirts. i'm really investing in you. ♪
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so i'm gonna make an offer. okay? ♪ so, my offer's $200,000 for 50% of the business. we'd be equal partners. but i'm still 100% in charge. dan: don't you think it seems low to get it going to where you want it to go? to get it where you want it to go, i don't think it's enough. lemonis: but i put in more than $200,000 for a business that's losing $100,000, then the equity ask is gonna go up, and i don't want to do that. i don't want you to be disincentivized. i want you to still feel like it's yours. does that make a little more sense? -dan: yes. it does. -kelly: yeah. lemonis: i'm gonna find new vendors, i'm gonna open doors for you. the $200,000 would be spent to pay your vendors and reinvest in some inventory. dan: it's a fair deal. he's gonna grow this, patrick, to the degree that we can never do it. patrick: i know. i think i'm gonna throw up. dan: patrick, your stuff will be everywhere. patrick: i'm just so [bleep] scared.
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kelly: i'm scared of if this keeps going. -dan: this is scary. -patrick: i know. dan: what he's gonna do is not scary. lemonis: so, what are we doing? ♪ patrick: i'm not in love with this building. i feel like i'll be, like, trapped. i mean, i don't want to be, like, sitting here, just... lemonis: ...working? if you can't change your thinking, i'm not sure what we're doing together. i may have made a mistake.
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♪ dan: he's gonna grow this, patrick, to the degree that we can never do it. patrick: i know. i think i'm gonna throw up. kelly: this should be not a throw-up feeling. it should be a happy feeling. dan: he's getting us out. he's getting you out. lemonis: i have another little twist for you. patrick: okay. lemonis: so, my offer to you is $200,000... patrick: yeah. lemonis: ...for 50% of the business. then, once we agree on that, i'll go down to 40%, you'll go down to 40%, and each of them will have 10%. i wanted to do this for dan and kelly, because i wanted them to feel really vested in the business. but i also thought it would be good for patrick to know that him and his family are in this together forever. patrick: we have have a deal. -lemonis: we do? -patrick: mm-hmm. ♪
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lemonis: you look, honestly, so stressed. patrick: [ laughs ] i'm scared. -kelly: thank you. -patrick: thank you so much. -lemonis: congratulations. -kelly: thank you, again. -lemonis: congratulations. -dan: thank you, marcus. ♪ [ dog yelps ] lemonis: so, i wanted to get everybody together and give you guys who are part of the team who were not at our meeting the other day a quick summary on what happened. the deal that i made with patrick is for me to invest $200,000 for 50% of the business. with that $200,000, we're gonna take care of our vendors, we're gonna invest in product development, we're gonna work on growing the women's category. kelly: i feel better now. lemonis: why? what did you think was going to happen? kelly: i don't know. i was nervous. patrick: she's always paranoid about everything. kelly: i'm -- yeah. lemonis: well, you should be paranoid about it a little bit. a little more paranoid -- it will be good for you.
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that you didn't think everybody else was gonna clean up your mess, because they've been doing it for years. kelly: he's the little brother. we're always trying to take care of him. lemonis: why do you help so much? dan: i -- i don't know. [ sighs ] just something i've always done. lemonis: why? dan: because my mom would have taken care of him. [ voice breaking ] she's not here. lemonis: patrick, you're a lucky guy, because i have rarely seen family businesses where you have a brother and sister that makes tons of sacrifices with no -- there's no reward for them. patrick: i know i'm lucky. but i would do anything for them, too. lemonis: i can see the talent in you, and my job is to rip it out of you. even if it hurts. okay? patrick: mm-hmm. lemonis: [ claps ] let's go to work, okay? kelly: okay. ♪
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lemonis: from what i saw at the warehouse, patrick pretty much produces any idea that pops in his head. that's his design process. he doesn't want to take into account the time it takes, the money that it takes, or whether the product even sells. today, i'm gonna force him to think about it. like, if i walk through, like, how many of these have you sold? patrick: 20? lemonis: how many of these did you sell? -patrick: probably around 50. -lemonis: around 50? kelly: no, because you've -- that's been wholesale to nordstrom. -lemonis: how many? -kelly: [ sighs ] lemonis: how many of these did you sell? -patrick: a lot. -lemonis: how many's a lot? patrick: that was -- that was big online. -lemonis: how many? -patrick: like over 100. lemonis: exactly or are you just whiffing it? patrick: i'm just whiffing it. i -- lemonis: we can't -- we can't function that way. where's the data in the system that supports the numbers? -dan: there's no data. -patrick: there's no data. dan: there's nothing. it's all a guess. lemonis: i'm trying to prove one point -- there is no process to actually launch products. and the three of you liking the design isn't a process to me.
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i need these guys to know that if they don't know their numbers, they don't know their business. you can't track what's selling or not selling. you can't do any forecasting to build inventory. you can't even monitor trends or customer behavior. you have no shot at success. let me bring this back to your family business. when your father woke up in the morning, did he just start making bread? -patrick: no. lemonis: how did he base his forecast for that day of what to make? dan: based on the orders that came in. lemonis: and so, in the food business, what's the one thing you don't want to do? -kelly: waste. -patrick: waste. -lemonis: why? -patrick: 'cause it goes bad. lemonis: why is this any different than a loaf of bread? this is perishable. i know it doesn't spoil literally. but figuratively, it does. because fashion goes out of style. dan: right. lemonis: there's a whole store of spoiled goods here. and today's the day they're gonna go away. losers? -dan: yeah. -lemonis: losers? yes? -patrick: uh, yeah. lemonis: what about these? -kelly: yeah. -patrick: losers. -lemonis: losers? -patrick: those ones...
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lemonis: so, i could keep going, and we can pile this thing up. i probably could go through the whole store. this is reckless. and if you're the organized numbers person, you've enabled him to be reckless. so have you. dan and kelly like to say that they protect patrick from himself, but they enable him to do whatever he wants. they're the ones that are supposed to be in charge of operations. what their brother needs is some structure. they have to be able to put that in place and hold him to it. ♪ this is where a lot of fashion in los angeles starts. -patrick: mm-hmm. lemonis: i wanted to take patrick to downtown los angeles, where the fashion district is. i have an investment in a women's apparel brand called two arrows. -ashley: hi. -lemonis: this is patrick. -patrick: hi, nice to meet you. ashley: hi, patrick. ashley. nice to meet you. lemonis: it's a perfect place for patrick to go in and work with people and see what the right process is to design new items and take it all the way to market. patrick started a brand called dilascia.
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ashley: yes. i've seen it. lemonis: he started it, and he has a tendency to take every idea that comes out of his head, and do what? patrick: make it. [ laughs ] -lemonis: right. -ashley: got it. lemonis: and so, i'm looking for you guys to show him, from all your years of experience -- what's the right way to think about an idea to final production? ashley: okay, so jocelyn and i come up with a bunch of ideas. we print pictures out. we see what's in the stores. we really, like, sit together and figure out, what would be the best dresses made in this group? so then we throw up a rough sketch, then we get it cut, we get it sewn, and then we have our finished garment here. now, if we don't like it, it doesn't go into the sketching phase where it gets put into our line sheet. lemonis: so, sketch to sample, sample to final drawing? -ashley: yes. lemonis: so, do you sketch out anything like this? patrick: no, i don't just do a start up of the sketch. -lemonis: you do not do this? -patrick: no. lemonis: do women traditionally want a "v" as opposed to a crew? jocelyn: i like a "v." but i don't like graphic t-shirts. that's just my opinion. lemonis: because it looks...? jocelyn: it looks too casual.
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it looks you're in -- you're at college. it looks cheap, a little bit. lemonis: patrick is literally clenching up that they don't love the fact that he's just in graphic tees. but is it necessary for him to hear, and good feedback? you bet. what he's learning is that he needs to diversify his product offering, especially if he wants to expand his business. do you guys have any extra space that he could sublease from you? ashley: we could probably pull up a chair somewhere. lemonis: pull up a chair, okay. so, what's the rent? jocelyn: we pay about, like, what? ashley: every room is around $600. -jocelyn: yeah. -lemonis: i really hope patrick understands what i'm getting at, because the store he's using as his office now, it ain't working. patrick: i mean, i'm not in love with this building, if that's what you're asking me. i don't like the vibe so much. i'm more inspired when i'm, like, around peop-- like, i-i-i feel like i would be, like, trapped in a building. there's not anyone around me. there's no distraction. and there's just not -- nothing going on. lemonis: i see windows and activity,
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and people coming in and out of the elevator, and fabric and carts, and you can walk the showroom and talk to other people, and there's a cut-and-sew here. and you can say to somebody, "what do you think of this?" and they can give you feedback. patrick: i mean, i don't want to be, like, sitting here just... -lemonis: ...working? -patrick: yeah. i want to work, obviously, but doesn't change ever freak you out? lemonis: it does. it does, but -- patrick: so i should be nervous. lemonis: but if you can't change your thinking, then i'm not sure what we're doing together. i may have made a mistake.
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[tires screech] [car horn beeps] [texting keystrokes]
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♪ patrick: doesn't change ever freak you out? lemonis: it does. it does, but -- patrick: so i should be nervous. lemonis: but if you can't change your thinking, then i'm not sure what we're doing together. i may have made a mistake, because i thought i was investing in somebody
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that wanted to grow the product offering and really build women. -patrick: i do. lemonis: so, do you think you would be better off just owning a retail store and getting out of the fashion-design business? patrick: no. i think my heart is in making the product and developing something. lemonis: but how do you put things up on the board like they do and bring samples in like they do and bounce things off other people like they do when you're taking care of merchandising your store and paying $3,000 a month in rent? patrick: i just...always thought i could do both. lemonis: has it worked up to now? patrick: no. it's just, you know, i have to make the change. lemonis: there has to be a process for this to work. patrick: i understand. lemonis: you are very talented, and the company needs the best of you, not half of you or a quarter of you. ♪ now that we've made some progress with our design process, it's time to start thinking about designing. so i'm taking patrick to a clothing manufacturer to get him started on the new women's line. patrick: yeah, i do like that body.
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lemonis: have you done that body before? -patrick: no. -lemonis: okay. the future of this business depends on him getting this right. so, this is burnout, right? -man: yes, sir. patrick: i would never put that in my line. lemonis: i have burnout at my stores, and my stores do $15 million. and to get it right, he gonna have to be flexible and open himself up to new colors, styles, fabrics, and bodies. that's the way this business is gonna grow. ♪ i like this as a lightweight hoodie. so, it's like a t-shirt hoodie. -patrick: yeah. -lemonis: feel that. patrick: yeah, like a duster. lemonis: the beauty of an expanded women's line isn't that it just gives us access to more buyers, but it also gives us access to different products, higher price points, and bigger margins. patrick's t-shirts typically retail for $35. because they make up such a huge part of his product offering, the average customer order at dilascia is around $58. adding high-price items like hoodies and sweatpants
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should get that average order up well over $110 -- nearly doubling the size of the order. i asked for patrick and his siblings to meet me at the store so we can talk about the women's line, but what we're actually gonna do is have a little intervention. where do you do your creative processes? like right here, or...? -patrick: kind of right here. or, like, running around and, like, meeting customers. and i just get -- this space just is a reflection of me, and i do get inspired here. lemonis: this store feels like a giant distraction. patrick: having a store is -- i think it's good promotion for the business. dan: this has held you back for six years. it's held you back. patrick: i know. i think it's in the wrong spot. dan: you can flourish if you didn't have this. let's focus on the thing that's really gonna make you a lot of money. lemonis: michael, what do you think? michael: i don't think we're selling much here, you know? lemonis: that's not me. that's not your brother. that's not your sister. -patrick: i know. lemonis: that's the guy you work with every day, who happens to work in the store.
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patrick: this is my brain. this is what -- this is, you know... dan: this is you being stubborn. patrick: it's not me being stubborn, you guys. -kelly: yes, yes, it is. -dan: this is stubbornness. patrick: i've been here for six years. dan: it's not a business decision. it's never been a good business decision. kelly: it's ridiculous at this point. it's ridiculous. lemonis: if i hadn't answered your phone call and we hadn't met, what would be happening to this store? patrick: it'd be closing in two months. lemonis: i'm totally into investing in you, but i am not into burning money. patrick: i know. lemonis: and so i think right now you have to make a decision. i'm gonna put it all in your hands. -patrick: [ sighs ] -lemonis: it's me or the store. ♪ kelly: i don't like this piece. patrick: i think it's gonna be a big hit. lemonis: it could be a big hit or a big miss.
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lemonis: i think right now you have to make a decision. -patrick: [ sighs ] -lemonis: it's me or the store. patrick: i have to close my store. i put a lot of heart into this space. lemonis: i know you did. -patrick: it means a lot to me. -lemonis: i know. patrick is a very sensitive guy, but he's also a very nervous person, and he usually likes to run away from his problems. but what happened today is that he dealt with a problem head-on. to be honest with you, i'm very proud of him. kelly: you're making the right decision. patrick: [bleep] you. [ laughter ]
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man: okay. what else is going? patrick: everything. the mannequins are going, too. lemonis: i tasked patrick with supervising the closure of the store, and to his credit, he hasn't missed a beat. patrick: my brother says it's time to grow up. lemonis: patrick separated out the good inventory, and he put it in the warehouse. and the bad inventory, he's gotten rid of it. and he's now working downtown. and he's full-steam ahead with the work on the women's line. jocelyn: only a handful of designers are doing it. lemonis: he's bouncing ideas off of jocelyn and ashley. ashley: so, the next step is to really have a tight branding. lemonis: and he's following the process. i'm pretty optimistic. ♪ -patrick: hello. -lemonis: what's happening? patrick: good to see you. lemonis: patrick called me and told me that he's finally ready to show me the new women's line he designed. so i brought dan and kelly so he can show us.
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what do you have here? patrick: okay, so, basically, the way i broke it down was i had like eight or nine pieces for athleisure for women's. so, i had my core pieces right here, and then from there, we go into, like, our fashion pieces, which is, like, the duster. and then we have our bottoms area, which is, like, the slouchy sweatpant, and i'll actually have a short and then a yoga pant with a mesh outline of the plane in it. lemonis: and how are you feeling about it? patrick: i think what i did was beautiful. i think i've really focused on more detail than just embroidery. kelly: i don't like the unisex hoodie. i don't like that. 'cause it's a zipper, and i feel like it's gonna get caught in your hair, as a female. -patrick: but it doesn't. kelly: and i feel like it's gonna pull on your hair. so i don't like this piece. lemonis: it could be a big hit or a big miss. patrick: i think it's gonna be a big hit. lemonis: yeah, well, i would expect you to say that. [ laughter ] but i like the fact that you're thinking outside the box. patrick has followed the design process exactly as we laid out. but, more interesting, he's come up with some really creative ideas.
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he created a unisex hoodie, and he's starting to utilize some really cool printing techniques. i was impressed. patrick: i think danny got very nervous my first few days, said it was terrible. he knows a good graphic -- lemonis: danny said what was terrible? patrick: my -- my concept. dan: i was saying it partially to be mean to him, but also to get him nervous enough to go out -- lemonis: why would you be mean to him? dan: not to be -- to motivate him. i was telling him this stuff to make sure that he followed up with kelly to get the blessing on all of them. kelly: i had it. we went over it. lemonis: we're now designing clothes in consensus? who's the designer here? -dan: i just want -- -lemonis: who's the designer? -dan: patrick is. lemonis: okay. dan and kelly's job is to help keep patrick focused operationally. do i want them getting involved in the design process? definitely not. what i invested in is what's inside of his creativity. let him do his thing. you're not his mother, you're not his father. you're his brother and his sister, and you're his business partner. dan: sorry for being hard on you. lemonis: the next thing that i want to see is i want to see some of these basic things actually start to get made. -patrick: okay. -lemonis: okay?
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patrick: mm-hmm. ♪ lemonis: patrick's finally finished with the prototypes that i've asked him to make for the women's line. -patrick: hi! -lemonis: how are you? so i'm meeting him at courage b at greenwich, connecticut, to hold the focus group. we're gonna be selling these clothes all over the country. we can't just be hearing from folks in one little corner of los angeles. patrick: i'm nervous. lemonis: what i want patrick to take away from this is getting feedback from lots of customers is a necessary step before going into production. woman: i think the fit is terrible. patrick: really? woman #2: i just feel like if i do this -- lemonis: where does it feel like it's too big? woman #2: like, i just don't like my crotch, but the back fits great. patrick: would you wear those on, like, a sunday to starbucks? -woman #2: no. -woman #3: if it was wider. patrick: i just feel like so many people do that. woman #4: the sleeves are just a little bit long.
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patrick: i think it's awesome. lemonis: unfortunately, patrick isn't taking all the feedback the way i expected him to. woman #2: how much would this retail for? patrick: i have no idea about prices. woman #2: oh. lemonis: what would you pay for it? woman #2: $75. patrick: i can't believe you said $75 for that. we're not at forever 21 anymore. lemonis: patrick, is everything here? patrick: we're missing a couple of the graphic shirts. lemonis: so the shirts that they actually wanted, we don't have? -patrick: none. lemonis: and did you call anybody? patrick: no.
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♪ woman: how much would this retail for? patrick: i have no idea about prices. woman: oh. lemonis: what would you pay for it? woman: $75. patrick: i can't believe you said $75 for that. we're not at forever 21 anymore. lemonis: the way patrick's dealing with this feedback, it's just immature. and i'm gonna address it. i really feel like you're gonna need to get better at taking feedback. patrick: well, i don't like any negative feedback ever, so of course that part sucks, but i think it was good. lemonis: you still seem a little pouty, and you still seem a little, like, bummed. patrick: i just -- extremely nervous is literally what it is. lemonis: okay. don't be nervous. patrick: i'm -- when we walk in the door, i freak out. lemonis: but i wanted you to get the feedback, and i want you to get used to saying, "okay, maybe i made a little mistake. i'm gonna tweak it." because next week, we are headed to bloomingdale's... patrick: [ sighs ] okay. lemonis: ...to see the head buyers. the primary thing is to try to get a commitment to carry some of the core stuff -- the t-shirts, things that you love.
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and i want you to make changes to the line based on the feedback that we got today. all right? -patrick: okay. lemonis: you're gonna need to know your pricing. all right. -patrick: thank you very much. -lemonis: okay, buddy. -patrick: thank you. -lemonis: good job. -patrick: thank you. ♪ lemonis: do you want to do anything on the table? patrick: yeah, totally. lemonis: today matters for me more than just getting them to say yes. i want to see how you sell, what your pitch is like, and their response to it. -woman: we are ready. -patrick: hi. woman: so, this is brooke jaffe from our fashion office. brooke: hi. really nice to meet you. lemonis: hi, brooke. marcus lemonis. brooke: hi. really nice to meet you. liz: hi, i'm liz jones. nice to meet you. lemonis: liz, marcus lemonis. -patrick: hi -- patrick. -liz: nice to meet you. patrick: how are you? my name is patrick dilascia. our brand is called dilascia. we're a family company. my brother and sister work for me, which most of the time is great. [ laughter ] the brand kind of started off as t-shirts, and it just kind of grew really quickly. then marcus challenged us to do more of a collection,
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which is what we have here to show you today. so, this is our basic v-neck, which is made out of bamboo with a little bit of rayon and spandex in it to give it that soft feel. liz: oh, i like the little airplane. -brooke: oh, very cute. -patrick: yeah, so that's kind of, like, our brand identifier, with the airplane on there. -liz: that's very cute. -patrick: thank you. liz: and what would the retail on this be? patrick: this would retail for $60. liz: okay. i like that. -brooke: very of the moment. -liz: yes. patrick: then, this is our slouch hoodie. it's longer in the back, shorter in the front. we like to do a couple things that make it more versatile to give it more value. the cool thing is the sleeves come off. -brooke: love it. -patrick: so, you can wear it, and it's a little more edgy. liz: and what would the retail on this be? patrick: this would be like $180. -liz: okay. -brooke: i want that. lemonis: this is really the first time i've seen patrick in the element that suits him best. his sales pitch is strong. patrick: ...comes in a lot of different colors. lemonis: and he knows his numbers. patrick: that one with the flocking would retail around $44. -liz: okay. -brooke: okay. lemonis: and he's doing all of it without dan and kelly having to hold his hand. brooke: could you put a colored lace? patrick: a hot-pink drawstring or something like that would really make it pop. i think that's a really good idea, actually. lemonis: but best of all, he's taking feedback the right way.
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brooke: i love the kitschy, whimsical expressions that reflect your personality. liz: my favorite part of the collection is the graphics. i think the graphics are really fun, and i think customers are looking for things that are gonna surprise and delight them. and then, i think first and foremost, it's getting the setup ready. we call it a "trunk-show" model. so, you bring in the stock and we actually sell it. then if it takes off, you know, we are big believers in chasing what's good. lemonis: a trunk show is an opportunity for a designer to bring in new products into a retail to have them test it out. if the trunk show goes well, dilascia will become a staple at bloomingdale's. well, we look forward to doing business. -liz: okay. -lemonis: thank you so much. brooke: thank you. lemonis: this is a big win for patrick. and it gives me confidence that he can do this with any retailer, 'cause bloomingdale's is one of the biggest. ♪
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patrick: have you seen the t-shirts yet? kelly: oh, no. -patrick: what? -kelly: no. patrick: i'm gonna have an aneurysm if they didn't send the t-shirts. -kelly: [ speaks indistinctly ] -patrick: sucks. lemonis: who's fired up? who's excited? -patrick: hi! lemonis: who's excited to be here?! patrick: so excited. how are you? -lemonis: look excited! -patrick: look at you. -lemonis: we need enthusiasm! -kelly: good morning. -lemonis: morning. -kelly: good morning. lemonis: did we just take these out of the box? -patrick: yep. -lemonis: these piles look... patrick: they're not done yet. lemonis: did these come out of a suitcase or something? kelly: patrick, really, you need to fold the t-shirts. -patrick: i know. -kelly: yeah. ♪ lemonis: patrick, is everything here? -patrick: yeah. -lemonis: is something missing? patrick: yes. we're missing a couple of the graphic shirts. lemonis: why? patrick: they went to connecticut to get tagged with the three-in-ones, and that box never arrived at my hotel. lemonis: so the shirts that they actually wanted, we don't have? -patrick: none.
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lemonis: okay. and did you call anybody? patrick: no. lemonis: he didn't call anybody? this is like the old patrick. instead of him dealing with the problem and solving it, he runs away from it. lemonis: i mean, i think, at the end of the day, you get one shot to have a trunk show, and then we show up and we don't have everything. it makes us look like we don't -- and we're not set up, and it's like... we look a little half-assed right now. so, what else is missing? -patrick: that's it. -kelly: that's it. patrick: and the three-in-ones in heather gray. lemonis: those aren't here, either? -patrick: no. -lemonis: how come? patrick: 'cause they're in the box -- they're in the same box. lemonis: dude. ♪ if your business is in trouble, and you need my help, log on to...
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♪ lemonis: patrick, is everything here? patrick: we're missing a couple of the graphic shirts. lemonis: so, the shirts that they actually wanted, we don't have? -patrick: none. marcus, honestly, i know i should have -- i [bleep] up. lemonis: patrick made a huge mistake, and what's worse, he didn't do anything about it. he just stuck his head in the sand. it's like the old patrick came back, and we still have to work on that. but right now, we have a trunk show, and we need to sell some product. welcome to our trunk show. brooke: my favorite t-shirt on display. -patrick: i know. yeah, i tried. -lemonis: good morning. -brooke: hi. -lemonis: how are you? -brooke: how are you? -lemonis: good to see you. brooke: good to see you again. i'm, like, looking. i see a colored, even, tie on the shorts.
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patrick: i changed all the color, yeah, for you. brooke: we talked about that. i actually love the blush with the gray. it's one of my favorite color combinations. it went from being a little masculine to, "those are cute. i want to buy those," and have a more emotional response to it. patrick: yay. lemonis: what i will say about patrick is that he stepped up. he made all of the changes that bloomingdale's asked for, and that shows me that he's now open to other people's ideas. and what i feel best about is it confirms my investment in him. our new women's line is more than just novelty screen-printed t-shirts. we have v-necks, shorts, hoodies, and lots of other athleisure wear. kelly: this is our new collection. this is dilascia. patrick: you can take the sleeves off, so it's also a vest. -woman: oh, wow. lemonis: what do you think of the cut? woman #2: it's perfect. it drapes nicely. -lemonis: yeah. -patrick: we call it athleisure. woman #2: this is so cool. i will totally get this. lemonis: we now have a process in place that only makes things that people want to buy. we're not making every idea that pops into patrick's head.
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woman #3: your prices are awesome. patrick: yeah, i make everything in l.a. woman #3: that's crazy. kelly: she's taking our lax/jfk t-shirt. lemonis: and once we have our line in bloomingdale's, we can expect a minimum of $250,000 a year in sales, just from one retailer. woman #4: awesome. thanks so much. lemonis: you thought i was gonna change the name. patrick: 110%. lemonis: but that's your family's name. patrick: yeah, i know. -lemonis: and people know it. -patrick: yeah. lemonis: because family is really such an integral part of the dilascia business, i wanted to surprise patrick, so i brought his father down from upstate new york. what i wanted his dad to see is how far patrick has come. patrick: it's a relief it didn't change. lemonis: it's a family business, you know? patrick: it is. -lemonis: hey, dan. -dan: hey, marcus. -lemonis: how are you? -dan: how you doing? patrick: [bleep] off. are you serious? -dan sr.: hi, patrick. -patrick: hi, dad. how are you? -dan sr.: i'm good. patrick: what are you guys doing here? dan: just wanted to stop by and say hello. -dan sr.: how are you, sir? -lemonis: good. i'm marcus. mr. dilascia? -dan sr.: yes.
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-lemonis: nice to meet you. -dan sr.: same to you. lemonis: did you bring us any baked goods today? dan sr.: no, i'm done with that. lemonis: you're done with the bakery. dan sr.: i did that for 43 years. lemonis: aren't you proud of your son? dan sr.: yes, i am. yes, yes. lemonis: i see a lot of families working together, and i think it's a testament to you and your wife how dan and kelly have really taken care of patrick. how does it feel to have everybody together? patrick: it's so nice. it's -- i love it. lemonis: is it any better working with patrick now, kelly? kelly: i was thinking about this yesterday, 'cause we drove from upstate together with not one fight. -patrick: yeah. -lemonis: was he sleeping? [ laughter ] now that patrick has a process in place, he won't need to be saved by his family every time. patrick: i cannot believe you guys are here. this is, like, crazy. lemonis: he still has some growing up to do, but he's made progress. i'll accept baby steps. patrick: thank you so much for everything. i appreciate it. -lemonis: i'm proud of you. -patrick: thank you.
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♪ jeff: my son, taylor. tonigtaylor: taylor.it"... lemonis: taylor. how are you? behind the father-son team behind the texas tea chain, the only thing brewing is trouble. how much do you owe? jeff: right around a million. lemonis: they've failed to fully think through the concept. there's no coffee, there's nothing to eat. are you guys trying to kill this store? they've left their franchisees to fend for themselves. ryan: just struggling to make a living down there. dawn: we've been subsidizing this business for over 18 months. lemonis: and with their relationship steeped in mistrust from the start... jeff: how can i believe anything that comes out of your mouth at this point? lemonis: ...tensions have come to a boil. taylor: i never felt like you're my father. jeff: i don't care if we're in front of that [bleep] camera. i won't be disrespected. i'll put you on your ass.

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