tv The Profit CNBC April 15, 2019 1:30am-2:01am EDT
i'm not a man hater. lemonis: okay. amber: this is why no one's investing in her. i feel like she's gone "victim" written all over her. it's her whole presentation. lemonis: that's what i -- that's what i knew i could fix. good morning. christina: good morning. lemonis: how are you? christina: good to see you. lemonis: good to see you. first of all, i have to compliment you. the idea that you came up with is fantastic. christina: thank you. lemonis: you didn't walk in with a huge checkbook and a huge pot of money, and you have been able to do one hell of a job. christina: i really appreciate that a lot. i do have one quick question. i do know i'm not willing to negotiate on imports. lemonis: at any point in our time together, have you heard me talk about bringing flowers in from china? christina: no. lemonis: i haven't even talked about that. i think that the help that i bring to the table is different than you walking into a venture capital. it's just, "how much money can you bring,
and what do you want for it?" christina: yeah. i do believe that part of not being able to raise capital is because i'm a woman. amber: you've said that. christina: i have no bitterness over it. lemonis: but you have resentment. christina: you know what i have? i want to share my story. wanting to be a champion for women is part of me. lemonis: i care about you and me. christina: yes. lemonis: i'm a guy, and i'm interested in investing. i want to make an offer. christina: i know that you can definitely help. but i'm building this amazing brand, so my ask... is $1 million for 5%. lemonis: uh, excuse me? christina: i -- lemonis: did you say -- christina: yes. lemonis: did you say $1 million for 5%? christina: yes. lemonis: so you think your business is worth $20 million? christina: yes. amber: [ laughs ] lemonis: when you go onto the radio... ray: mm-hmm. lemonis: ...and you're doing your thing -- you said sexist, racist... ray: i put a humorous spin on everything. lemonis: what's funny about racism? i didn't want to have to say, "you're ignorant."
lemonis: mm-hmm. amber: well, it's not. it is not. no wonder why no one's investing. lemonis: 5% just -- just isn't interesting to me. i can't make a $1 million investment and feel insignificant. so my offer is a $1 million for 25% of the business. christina: 7.5% is the end. lemonis: you have no technology platform to speak of. why would you not want to bring on a partner who has resources, who is gonna respect your personality? christina: i can go 10%. that's double what i thought i was gonna come in here. lemonis: i am putting value on me, just like you've put value on you. i can't -- i can't just minimize this as if i'm just, like, a piece of [bleep] i just can't do it. christina: um... lemonis: and so my final offer is $1 million for 20% and a half a million dollar credit facility. amber: why'd you spend so much time on her here? at this point, aren't you just frustrated and want to get out?
lemonis: no, 'cause i really liked the business. amber: yeah, but did you really like her? lemonis: i liked parts of her. i don't feel like christina has character flaws. amber: no. lemonis: i don't find her to be dishonest. i found her to be jaded by the fact that other people didn't give her what she had expected, and she put them in a class. and i felt like i could change that. amber: right. lemonis: i was obviously wrong. christina: i'm sorry. i can't do it. lemonis: she didn't even meet me in the middle! basically, you just made it about money and not the partnership and not the resources, and to expose you to new things and to come up with new ideas. you didn't see any of that. christina: i'm really sorry it seemed that way. lemonis: well, it doesn't seem that way. is that way. nice meeting you. christina: you, too. lemonis: good luck to you, by the way. she's still open today. she's doing a killer business. amber: she is. lemonis: i missed out on a deal. i think she missed out on a deal. amber: you would've made a lot of money. lemonis: i would've sent you flowers every week for $38.
i would've put your card on file, automatically -- amber: my card on file. man: full speed. all right, guys, whenever you're ready. lemonis: which one is this? amber: this is another crazy one -- rayjus. lemonis: this is actually the truth. after we shot this episode, i used to refer to this episode... amber: i know you did. lemonis: ...as racist. amber: as racist. lemonis: let's watch it. amber: yeah. lemonis: in 2010, justin romines started rayjus with his fishing buddy, ray odom. justin: if you take the graphic stuff out of there, i bet you it's almost even. lemonis: as 50/50 partners, their goal is to bring professional-looking sports shirts to amateur fishermen. katie: we only need five small. justin: okay. but we're short this material for all this? katie: correct. lemonis: but fishing is a seasonal sport, and that means unpredictable revenue. ray: well, february, march isn't bad. april -- got our ass kicked. lemonis: and the slow months have led to a lack of funds while their debt continues to climb. justin: we also have no material here right now to get the lamb order done...
lemonis: sports apparel is a $35 billion market in the u.s. i have a massive investment in the outdoor space with my acquisitions of gander and overton's, and this could be a great addition to them. hello? as i go through the warehouse, i-i honestly thought i was in somebody's storage garage that was just holding boats in there. hello? cathy: hello. lemonis: how are you? cathy: good. how are you? lemonis: hi. and then i go into this area where i see all these women working, and, i got to tell you, it was -- it was hot as [bleep] in there. i went into another area that felt like an air-conditioned office. hello? justin: hello. hi. lemonis: hi. justin: how are you? lemonis: i'm good. justin: i'm justin. lemonis: justin, how are you? i'm marcus. justin: that's ray. lemonis: nice to meet you. ray: hi. lemonis: hey. how are you? i'm marcus. ray: good. nice to meet you, marcus. lemonis: nice to meet you. so is that what ray and jus is? ray: exactly. yep.
justin: that's right. lemonis: okay. you guys have, like, a boat dealership in your garage. justin: yeah, that's my boat and his boat. ray: my roommate-in-college's boat and then two other rentals. lemonis: you guys do a lot of fishing, obviously. justin: as much as we can. ray: yep. [ laughs ] justin: we are kind of geared towards the fisherman and the boater. sun-protection designed. ray: completely custom shirt. so, this starts as plain white fabric. lemonis: so a customer calls you and says, "i want to make a shirt for my fishing tournament." justin: mm-hmm. ray: on our website, they can actually go on and build their shirt. lemonis: so an individual customer that buys this, what does it cost? how many is the minimum they have to order? justin: one. ray: one is the minimum. justin: one is the minimum. lemonis: where does the bulk of the revenue come from? justin: essentially that. lemonis: and so your entire business is individual consumers going onto the website, making a custom shirt? ray: 80% of them. justin: 80% of it, yeah. lemonis: wow. pause. i wasn't saying "wow" like, "that's awesome." amber: no. that's a horrible business model. lemonis: what you had to factor into this process from a cost-of-goods standpoint is the raw material...
amber: right. lemonis: ...the artwork, the final design, the sewing process, the packing and shipping process. amber: a lot goes into one shirt. lemonis: a lot goes into one. what experience do you guys have in this space? ray: none. lemonis: oh. ray: i was a disc jockey. justin: i'm in management information. lemonis: disc jockey. justin: it guy. lemonis: what are the roles that you guys have? ray: i do design, product development. justin: and i do some sales work. lemonis: can you show me the factory? ray: sure. lemonis: well, how did you make that transition from radio to here? ray: i always built websites for myself and designed t-shirts for myself 'cause i was a disc jockey. lemonis: okay. ray: and i'm still on the radio now. it was always my creative outlet. lemonis: you're still a disc jockey today? ray: yeah. lemonis: and how often do you do that? ray: i go twice a week, but i'm on every day. amber: why did you talk so much about the radio thing? lemonis: well, in this moment, i wanted to understand how much time he was actually committed to the business. early on in the process, i'm trying to assess how much time, how committed, how much do they have invested,
what do they have to risk, how passionate are they. and hearing that he had a side job -- was it a side job, or was this the side job? justin: here's our factory, marcus. katie: katie groves. nice to meet you. lemonis: nice to meet you. katie: i'm manager in charge of special projects, so i'm over lamb and goat products, as well as... lemonis: wait. what? [ laughter ] katie: sorry. this is for goats. they are leg warmers. lemonis: these are for goats? justin: goats and lambs both. it stops them from biting on their leg. the seasonality of the business, this is to help us keep these guys working all year round. lemonis: how much will you generate in revenue from the lambs and the goats? justin: lambs and goats so far this year are at $80,000. lemonis: so how much revenue will you do in those custom t-shirts? justin: about $1 million a year. ray: about a million bucks. all right, guys. i'll -- i'll hang out here with them. i don't need you. justin: all right. lemonis: it's very important for me to always want to spend time with people that work there without the business owner. 'cause i'm almost positive that before we get there, they have a company meeting and they say, "okay, this guy's coming. don't say this." amber: i don't think every business does that.
lemonis: every business prepares their employees for our visit. amber: okay, sure. but i don't think every business says, "don't say this, don't say that." lemonis: wouldn't you tell somebody that, if we were coming to your business? amber: not if i truly, truly wanted your help. i would trust the process. lemonis: okay. holly: we're kind of, like, on our own out here. nobody really comes out here. it gets really hot in here. lemonis: no a/c in here. holly and katie: no a/c. holly: every friday, they're gone fishing. lemonis: they're gone fishing. holly: they go fishing all the time. lemonis: how do you make payroll through fishing? katie: yeah, well, those are questions we have, as well. the business is out of money. there's nothing left to pay anyone. we have payroll due, and there were at least three to five people who hadn't cashed their checks from last pay period. holly: they hold them. lemonis: you guys hold your paychecks? holly: yes. lemonis: have you ever had a check bounce? katie: yeah. amber: can you imagine going to cash your work check and having it bounce? lemonis: if your business is in trouble and you need my help, log on to...
katie: there were at least three to five people who hadn't cashed their checks from last pay period. holly: they hold them. lemonis: you guys hold your paychecks? holly: yes. lemonis: have you ever had a check bounce? katie: yeah. amber: can you imagine going to cash your work check and having it bounce? like, you work all week, you need to put food on the table for your family... lemonis: or rent. amber: ...or yourself, and your check bounces. i can't even fathom that. lemonis: and you got a bunch of boats in the warehouse.
amber: i think these women probably feel stuck. i don't know the job situation in morris, illinois, but i do know that there's other options than this. there's a ton of women on the set. girls? these are all women on our set. this is to all the women out there. you can do other jobs. lemonis: it's true. amber: you don't have to be stuck. you don't have to be working for men that are treating you like a piece of [bleep] and don't give you air-conditioning. lemonis: is it warmer in here than it was in there even? marci: oh, yeah. the thing is the press runs at 390 degrees. it's always hot. lemonis: yeah, but, i mean, they could pump some cool air in here. marci: it would be a little more enjoyable. lemonis: it's odd to me that marci is out in the warehouse standing and working with this very hot machine -- i mean, really hot. and right on the other side of the wall are a bunch of guys sitting in cubicles with plenty of air-conditioning. the girls inside were telling me that the business is somewhat disorganized.
marci: it is a little frustrating, though, to know that they're out fishing and then we might not be able to make payroll. i actually have a video on my phone of a friday afternoon i think you would probably find pretty interesting. so this is -- this is just me. it's a quarter after 1:00. let's go see what's going on in rayjus. let's see who's all here. ♪ lemonis: nobody. ♪ doesn't that piss you guys off? marci: yeah. lemonis: pause for a second. amber: that means multiple times, those guys have not been in the office and they've been gone for the day, fishing in their boat. whatever, right? and she videoed it. lemonis: so, one of the things that the viewer didn't see -- there's a number of scenes that we just didn't put in there. ray and justin were running a side business selling lures and tackle. so i took a few pictures. amber: how come you never told me this? lemonis: i don't know. i was so annoyed with them. but they actually have names for the different lures that they have.
so they had "big dude," "penetration," "sweet beamer," "pocket rocket," and [bleep] [bleep]. amber: we cannot say [bleep] [bleep] on national television. lemonis: why? what does it mean? hold on. i'm gonna google it. hold on. what? eww. amber: these guys are disgusting. lemonis: i have a really mixed emotion here because i like the potential for what this product could deliver, and i know where i would sell it. but you don't want to judge a book by its cover, but the first couple of pages aren't looking good. what is cool is that you have people here in illinois making a product, and you're designing stuff. that is why i came. so, if i look at the financials for last year, you did $1,282,000 in business, gross profit of $596,000, which is not a great margin, especially when you're selling direct to consumer. justin: we had, in the heart of our busy season last year,
both of those printers go down. and, that happening, it just absolutely killed our momentum, killed our -- ray: sales. justin: ...our sales, it killed our profitability. ray: yeah. justin: we lost, printer time alone, $254,000 last year. lemonis: so how much would it have cost to buy a new printer? ray: $30,000. justin: [ sighs ] yeah. lemonis: and what could you guys have sold personally to buy a printer? justin: nothing. ray: plasma? [ laughs ] justin: well, the company is on life support, and i know that. i've known it for several months -- several years, even. lemonis: how far do you guys think you are away from closing? justin: if some things don't turn around, within a month or two. lemonis: can you make payroll next week? justin: not yet. ray: not at this point. lemonis: how do you guys pay your bills? like, how do you pay your personal bills? this place makes no money. ray: i have the radio job. but that's why i reached out because it's time where we need to turn the ship around. i see the numbers, and they suck. i know that. lemonis: the numbers don't suck. the margins suck. ray: yeah.
lemonis: and your employees think you guys suck. they think you guys are more interested in going fishing than you are making sure they get their paycheck. justin: that's a shock to me 'cause i feel like i'm the one that tries to settle differences with them. ray: i'll be honest. i'm shocked. lemonis: [ groans ] ray: no, really, 'cause i think i have a great relationship with the employees. lemonis: okay. you're on the radio. ray: sure. lemonis: and you have the gift of gab. ray: sure. lemonis: so i doubt that you're shocked by much. ray: depends, yeah. mm-hmm. lemonis: okay? ray: but the character that i'm playing -- lemonis: do you understand what i'm saying? he can get away with it. ray: the character that i'm playing on the radio is not the character i am in real life. lemonis: i don't want you do be a character. ray: i'm dad in real life. i'm a guy that cares about my family, about my employees. on the radio, this is not me. i'm a sexist, egotistical, racist pig on the radio. ♪
amber: right. lemonis: in this moment, most people would be expecting me to get up and run. and i was like, "you know what? i'm gonna give this guy a chance to walk off the plank. i'm not even gonna have to yell at him." and the fact that these really spectacular, respectful women were working in a sweatshop, coupled with the fact that i had been in their bait and tackle room seeing these grotesque names, it gives business owners a bad name. i hate to admit this to you, but there was a side of me that was like, "i'm gonna put you out of business." amber: i can imagine. lemonis: what do you think a woman would think of your radio show? ray: that i'm a pig. i'm going to say what every other man wants to say that doesn't have the balls to do it. justin: i don't like sexist or racist things. absolutely not. lemonis: i'm just trying to understand this. ray: okay. lemonis: when you go onto the radio... ray: mm-hmm. lemonis: ...and you're doing your thing, and you said sexist, racist -- are the people that are listening also the same? ray: yeah, i think so because i put a humorous spin on everything. lemonis: but what's funny about racism?
ray: it's not the dick joke you tell. it's how you tell the dick joke that makes it funny. lemonis: pause. amber: you did ask him a lot of questions to make sure that he meant exactly what he said. lemonis: because i wanted him to clarify how ignorant he was. i wanted him to write the script for me. amber: and he did. lemonis: i am a big believer that you are who you do business with. and so the fact that you think i would do business with you because you do that, whether it's your personality or not, i just can't. i can get over business problems. fix the process. make it safe. put the air-conditioning in. figure out how to pay the taxes. create a better work environment. sell more. diversify the product. i can fix those. i can't fix you from being a racist and a sexist. but here's the good news. i won't have to fix it, 'cause i'm not gonna be here. nice meeting you. justin: nice to meet you, too. lemonis: i wish you guys luck. justin: all right. lemonis: thank you so much, okay? business appears, based online, that it's closed today. ray got fired from his radio gig before the show even aired.
so what people have to understand is when you have a particular perspective about women or about races or about anything like that, it just doesn't go away because you said, "well, i didn't mean it." amber: looking at all these failed deals we just watched, you think, like, this makes you a better investor? lemonis: uh, i'm disappointed that i didn't push harder on farmgirl flowers. i feel like that's a deal that i should've gotten done, and i let my emotion get into it. and i could've convinced her, but i didn't want to sell her on it. i didn't want her to feel like i was being desperate and selling her. i look at, uh, something like rayjus and i feel like i -- i did the right thing and i set the example for other investors -- that no matter what the business opportunity is, you have to go with what's right. and i think in the case of j and da lobsta, what my issue was is that j put himself in front of the business. so we had a guy that thought he was bigger than the business. we had a young lady who made it about the female-versus-male thing
and didn't really appreciate the value i brought to the table. and then we just had some straight-up racists. amber: right. right. lemonis: do i think it made me a better investor? i think it made me appreciate the people that i do do business with. amber: right. like all these people. lemonis: yeah. - [nfor lifelock with norton, ipaid for by symantec. angie harmon is known for her television roles as a lawyer and detective, but like the rest of us in her real life she's concerned about identity theft. today she's going to help us learn how it happens and how we can help protect ourselves. - look around, everywhere we go we're all on our phones and laptops, we shop, bank, fill out forms and applications all online. we give away our names, birthdays, passwords, even our social security numbers.