tv The Profit CNBC February 15, 2016 5:00pm-6:01pm EST
>> all: cheers. tonight on the profit, amazing grapes is a wine bar and retail shop, the brainchild of a real estate developer who seems more interested in sipping than selling. this is ridiculous. even with more than $3.5 million grapes is operating at a loss and still can't pay down their mounting debt. this is a business without leadership or direction. i wish that you had passion for the business. you wouldn't be losing money. if i can't find somebody from within to take over amazing grapes and manage its assets, this business will be crushed. >> are you the grim reaper, or-- >> sometimes. my name is marcus lemonis, and i fix failing businesses. >> we're out of business. >> we were out of business before, we just didn't know it.
i make tough decisions. greg's not in charge anymore. i'm in charge. and i back them up with my own cash. it's not always pretty. >> every day's not gonna be like this? >> no, gonna get much worse. but this is business. cut your losses and go home. i do it to save jobs. things are going to change. and i do it to make money. this the profit. [theme music] ♪ nine years ago, amazing grapes opened its doors in the heart of orange county, a wealthy community about an hour south of los angeles. it was the vision of greg schroeder... >> this is good stuff. >> a wealthy real estate consultant who loved collecting wines and decided to turn his hobby into a business. >> we had to drive 35 miles to find the nearest fine wine store, and i thought, "just open a store closer to home." >> today, amazing grapes sells some of the finest wines in the world, and while the business generates about $3.5 million in revenue, last year, they lost money... >> we have never seen a profit
from this store in the nine years we've been open. >> and haven't even made a dent in paying down a debt that's well over $500,000. there are 17 employees at amazing grapes, but without a strategy to generate sales and increase profit margins, this business will be done before the end of the year. >> you're selling wine too cheap. >> let me stop you right there. >> i'm not done. i don't see myself walking away from amazing grapes. i'm trying everything i can to keep this alive. >> in the u.s., wine retailers generate over $9.5 billion every year. i think amazing grapes can be turned around, and i want a piece of it. all these boxes. i always believe that first impressions are lasting impressions, and my first impression of walking into amazing grapes is there's clutter everywhere. it's disturbing. live music in a wine store.
[laughs] ay-yi-yi. wow. i couldn't believe how much inventory was in this place. sometimes, too much selection is awful. how are you? i'm marcus. >> how you doing? brian, pleasure, welcome. >> nice to meet you. >> you too. >> it's a little bit bigger than i thought it was gonna be. >> 1,800 different skus of wine in this space. >> is that what's in here, 1,800? >> yeah. >> huh. no one has time to look at 1,800 varieties. i'd be willing to bet that half of it doesn't even sell. how long have you worked here? >> today's my second day. >> is it? >> yeah. >> look what you were signing up for. >> every day's not gonna be like this? >> no, gonna get much worse. >> [laughs] >> take a walk around, just check it out. is the owner here? >> um...not sure. [scanner beeps] >> your total today's gonna be $56.86, sir. >> i'm marcus. >> i'm daniel. >> what do you do here? >> i specialize in the beer, definitely. so i mean, i've been in--i've been in the scene for about four years now. >> the beer scene? >> the beer scene.
just kind of learning everything i can. i do a lot of research. >> how do you know what to pick? >> ugh, a lot of drinking. a lot of drinking and a lot of expertise. all i know in this world is beer. >> so who do you work for? >> i work for, you know, the owners, bill and greg. they come in every once in awhile. >> but they're not here every day? >> no. it's one of the issues that i think that we are facing here. >> huh. all right, brother, thanks. >> hey, no worries. >> who's hiding in the aisles? >> i'm dan. >> dan, what do you do here? >> i'm the wine bar, and i spend most of my time selling. >> how long have you been in the business? >> 22 years. >> whoa. >> what i brought to the business was a book of business that i had built over 20 years dealing with folks by selling to them directly via email or phone call. >> that's worth a lot of money. >> right, right. >> what's your favorite wine? >> uh, well, i mean, my true love are the wines from bordeaux, so-- >> do you have a lafite? >> okay, now you're getting to the top. >> nah, i don't want that. i can't afford it. i have a question for you. >> sure. >> why is there crap everywhere? >> too much inventory? >> exactly. >> who's responsible ultimately
for overbuying inventory? >> greg wants to be in charge of that. my approach to buying is, is i buy what i think i can sell within 30 days. >> and would you know how to liquidate it if you had to? >> yeah. >> and so why haven't you suggested that to greg? >> well, i tried, marcus. i'm not in charge. he's my boss. >> dan definitely knows what he's talking about. to take a guy with 20 years' experience and handcuff him seems silly to me. where are the owners? >> well, greg schroeder is the one owner that i think you've maybe met. >> i have not. >> boy, um-- >> i've been here a good amount of time, and i still haven't met greg. it isn't like he didn't know i was coming. all right, well, i'm gonna walk over to the wine bar. we can meet some more people. >> sure. >> the layout of the bar makes absolutely no sense. it's literally hidden in the corner of the business. and what else is odd is i feel like i'm standing in two different businesses. i mean, you're paying rent for the square footage, but you're failing to actually capitalize on the fact that it's there. are you mike? >> i am, yes. >> nice meeting you. >> nice to meet you. >> what do you do here? >> i oversee the kitchen and manage this--the bar side of the
operation. >> how much revenue will the bar and restaurant do here? >> the bar right now--gross sales for us this year would be a little under 500,000. >> okay. you're responsible for the layout and everything? >> that's greg's decision. greg is the operational piece. we never see him, so-- >> it's two different businesses under one roof really. >> it's odd when i walk into this place because i don't actually see the bar. it's kind of tucked over into the corner. we want our patrons at the bar to actually get up and buy a bottle or a case of whatever wine they were just drinking. it's common sense to have the bar help drive retail sales, but you can't do it if it's clear across the other side of the room. >> i'm marcus. >> matt. >> what do you do here, matt? >> i guess you can call me, like, the retail manager. >> you know what i haven't seen? where are the owners at? >> greg, i think--i mean, i'm not sure. >> how often is he here? >> about, you know, once a month, twice a month. it's kind of usually us on a daily basis. >> there's no leadership. >> no, not outside of me, mike, and dan. >> i really invest in businesses with absentee owners.
interesting thing here is that the employees have taken it upon themselves to do all the things that the owners should be doing. that's something you can't put a price on. these guys are clearly keeping this ship afloat. you know, you would think that if somebody called you and said, "hey, come help fix my business," they would be here. >> uh, yeah. seems odd to me too. >> [laughs] it's odd to you too. okay, good. can you give me a little tour of the place? >> of course. >> that's the kitchen? >> that's the kitchen, yeah. >> the whole kitchen? >> that's everything, yeah. >> how are you? i'm marcus. >> hi. hi, marcus, gerri. >> gerri, nice to meet you. [horn honks] this is the whole kitchen? >> this is the entire kitchen. >> this kitchen is tiny. i'm shocked by the size of this kitchen and the lack of equipment in there. i don't know how she even cooks anything, let alone contribute to the $500,000 coming out of her department. be nice if you had more space. >> it would be great to have more space. that's the biggest problem we have. when we're plating at night and a full bar of 75 people, it's really hard.
it's tight. [car alarm chirps] >> just hearing from some of the other team members about the place, i think the biggest thing is there is no leader. >> no. >> no? when i was called to come here, i think they assumed that i would just come in and just write a check. >> yeah. [laughs] >> and the reality of it is, is that i am not convinced yet. >> are you the grim reaper, or--[laughs] >> me? >> yeah. >> sometimes. i don't really know where the leadership is. i don't know who the owners really are. >> if there's changes to be made and sacrifice to be made, we're willing. >> okay. that's good to know. >> 'cause we care. >> what do these people that you work with mean to you? >> wow. it's not just a job, marcus, really. this is someplace i love, i love coming to everyday. i interact with so many people that i care about, and that door would close, and i wouldn't have that. this place just means a lot to me.
>> marcus, i'm greg schroeder. >> oh, hey, greg, how are you? >> nice to meet you. >> one of the owners? >> i'm one of the owners, yup. >> okay. nice meeting you. >> nice meeting you, marcus. thank you. >> you do a nice job, by the way. guess who decided to show up? finally. so what do you do full-time? this is--you don't come here every day. >> no, i come in here probably two, three times a week. >> two or three times a week? >> yeah. >> or two or three times a month? >> [laughs] these guys have been here for a while, and they know how to run things. >> uh-huh. how much revenue will you do this year? >> projected about 3.5 million. >> how much inventory do you have? >> about 350,000. >> you have any debt? >> yes. right now, 540,000 of that is for inventory, 90-- >> but you just said there was only 350 in inventory. >> yes. >> so right now, you'd be upside down... >> correct. >> couple hundred grand. this business is in real trouble. amazing grapes currently owes $540,000 in payables to vendors that they bought inventory from, but if they were to liquidate everything tomorrow, it would only cover $350,000 of that total debt.
that means we're $200,000 in the hole and no cash to cover it. i need to take a closer look at these financials. walk me through this again. >> and here's how it kind of breaks down on a monthly basis. >> so about 300 grand a month in business. >> correct. we're doing 65% of our business through email and internet, which is what dan does. >> of the 3 1/2 million of revenue, almost $2 million. so dan is really responsible for most of the sales. >> that is correct. >> and do you know the margin is on that? >> the bar margin's about 37% overall. >> okay. >> the wine on average, they're probably around 14% to 17% total. >> and is there a difference in margin between the walk-in business and the web business? >> no, they're all about the same, 'cause it's the same price for everybody on those transactions. >> not good. how much is your rent here? >> it's 14,000 a month, so-- >> so you're essentially giving the retail customer a wholesale price if the margins are that low, except on the internet, you have no rent. in here, you have 14,000 a month.
the fact that they do $3 1/2 million of sales a year is irrelevant because they don't make enough margin to cover their operating expenses. there's no way out of the hole other than money going in. no way. what's the most profitable part of this business? >> the bar. >> the bar's the best. very early on, what looks like to be the flaw in this business, too much floor space. you're not a wine discount depot. not enough tables. i don't know that the space is too big. i think the use of the space is wrong. you can cut the retail store in half. your margins would change so dramatically if you could do more wholesale over the web, a little less retail space 'cause you're not getting it anyway, and get to that bar easier. the bar and restaurant has the highest margins in the entire business at nearly 40%, and it makes up 14% of the revenue. the problem is, it only makes up 10% of the square footage. i want to focus on the high margin business, the bar and the restaurant, and minimize the amount of space dedicated to the
low margin business, the wine walk-in retail business. i know that if i can add tables and chairs, my margins will go up immediately. but as an owner, you have to be there to connect the dots. the problem that exists today here, there's no leader, and the owners are absent. and because of that, the business loses money, and because of that, the business is upside down. so what do you do? >> this is why we called you. >> when's the last time you guys had a staff meeting? >> we don't have them. >> i been here three years. there's been one. >> no staff meetings. how do you know what's going on? >> you don't. when the [bleep] hits the fan, that's when we learn about it. >> this--it's like--this is like the definition of insanity. how many total employees here? >> 17 employees. >> if the business does go out, that's 17 people that are on the street, and you guys lose-- >> a lot of money. >> i think bill, he doesn't even sleep at night. >> who's bill? >> bill gary's my partner. he's the one who handles all the financials and does all the book work. >> the one that doesn't come. >> he's not coming. >> and why didn't he were to be here again? >> they're business consultants themselves, and they just felt that it would be-- >> i'm not a consultant.
i write checks. >> right, they're consultants. >> there's a big difference between me and them. >> yeah, i know. >> so what they would probably worry about is, if they can't fix their own business, how are they gonna fix somebody else's? wow. shame on them. let's try to call 'em if you can. i don't know if you have any way to call him. >> yup. [phone ringing] >> hey, bill, how are you? you're on the speakerphone. i got marcus here with me. >> [on phone] how are you doing? >> hey, good, bill. how are you? >> good. >> i wish you were here. >> well, i wish i could've made it. i may try to swing by this afternoon, but i'm got some conflicts in my work schedule. if i can get out of here, i will try to make it. >> bill is a partner at amazing grapes, and in order for me to do a deal with this business, i need to talk to the guy who actually puts together the financials. i flew here from chicago, as you know. so what time can i expect you? >> yeah. how about 5:00? >> i'll plan on seeing you then. >> thanks a lot.
>> do you drink much wine? >> i don't drink much. >> no? >> it impairs my decision-making. >> [laughs] >> and i write checks that i shouldn't write. >> [laughs] glass of wine over here, please. >> hey, i'm marcus. >> nice to meet you, marcus. bill gary. >> hey, bill, how are you? >> how you doing? nice to meet you. >> hey, greg, good to see you. >> welcome. >> why don't we go sit down and kind of get down to business. >> terrific, great. >> is that all right? >> yeah, that'd be great. >> okay. how much money do you guys have invested so far in this venture? >> about $3/4 million, and then five silent partners who put in another 1/2 million. >> and how much are the payables today? >> all of our liabilities is about 575,000. >> almost 600,000. >> almost 600,000. >> are the other partners in addition to yourself prepared to write a check to get the business right? >> none of the partners are willing to do that. >> not even you guys. the math is very simple. they've invested over $1 million into this business, but they currently owe their vendors $600,000. i don't care that they do $3 1/2 million a year in business.
they don't make any margin, so there's nowhere to pay the bills from. here are the problems that i see: terrible communication. not having a leader in place is devastating to a business. people, process, and product is all i care about, and you've screwed 'em up. at this point, the business is essentially zero. so i don't know that i have a deal to make. i think unfortunately where we're at is cut your losses, liquidate your inventory, pay your vendors, work your way out of your lease, and go home. what is all that? >> it's greg's band. >> he's never here to work, but he has time to come have his band here?
>> i think unfortunately where we're at is cut your losses, liquidate your inventory, pay your vendors, work your way out of your lease, and go home. you don't have the time. the other scenario is--it's a little like a hail mary. you should let somebody else run the business, and hope that somebody else can execute it because you don't have the time. >> i grew up in retail. to me, this is second nature. i love this. i love coming in here and rolling up my sleeves. >> greg, i'm not sensing that you have really been involved to date. no one's ever here. who's in charge? i don't know. >> i'm not here every day. i readily admit that. i can't imagine not being involved.
>> and how about you, bill? >> i could be not involved. >> here's my offer. my offer is i'll put $300,000 into the business. i would own 51% of the business. the management team would own 25. and the current ownership would own whatever's left. >> i mean, i'm shocked by this quite frankly. it just doesn't seem to compute. >> you guys have any suggestions? >> what i'm seeing is 25%. >> i mean holy [bleep]. with all due respect, i would never do a deal where i would be less than 51%, and the reason that i'm not 100 is because i want the employees to have something. i can't do it without them, and potentially even having them be one of the general managers.
i don't know that. i can't make that assessment that quickly. what i love about these employees is not only are they knowledgeable, not only are they hardworking, but they have put up with a lot of nonsense. owners not showing up, no leadership, and despite all of that, they've stuck together, and they've allowed this business to still generate $3.5 million a year. >> yeah, what's different? what's the magic formula? >> going forward, and we're gonna put a leader in place. we're gonna put a process in place to buy inventory the right way so that we measure turn, so we're not sitting with hundreds of thousands of dollars worth of inventory. you got to show up, and you got to participate. >> look it, you know, if... if nothing else to take the pressure off, you know, and we can buy--we can pay our vendors, i mean, that's huge. >> so do we have a deal? >> we have a deal. >> i'm gonna write you a check. my offer of $300,000 for 76% of
the business is solely to go towards paying down the vendors. we knew that they were in trouble by about $250,000, and i wanted to make sure that all the vendors were brought current. going forward, after you take this check, i'm 100% in charge. do you understand that? >> yes. >> okay. >> thank you. thank you. >> let's toast. >> thank you for saving us. >> come on up. dan, shawn, ed. i was asked to come to this business because this business last year did $3.6 million, and we lost money. >> just silence. >> the owners here i think take most of the responsibility. they have been half-ass, absentee owners, and typically, i do not invest when there are absentee owners, but last night, i wrote a check for $300,000.
i now own 51% of the business. >> [laughs] >> people, for me, is the only reason that businesses fail or they survive. so the management team, the people that i believe are here for the long haul, will own 25% of the business. >> whoa. >> and the current ownership structure's gonna go along with whatever we decide. >> yes. >> knowing that i have ownership in this business now, it just really shows me how committed marcus is to his people. it's really a dream come true. >> this is gonna be hard on greg. you are more important. you now have more control and ownership and authority than he does. i want to fix this model, but we got to put a leader in place, fix our margins. we need to reduce the inventory because this is just cash sitting around. we're gonna learn how to make every square foot and every inch of this place generate
something. the wine bar generates the highest margin for amazing grapes at about a 40% margin, but with the current layout, we're limiting the amount of revenue the wine bar can generate to about $500,000 a year. i want to dramatically increase the amount of seating in the wine bar. my goal is to have the wine bar contribute an additional million dollars of revenue a year. at a 40% margin, that would result in $400,000 of additional profit. things are going to change. >> [laughs] [laughter] >> come here. >> guys, to a new beginning. >> new beginning. >> cheers. >> yeah. >> yeah. >> what's all this? >> well, these are just empty boxes. but why are they all kept here? >> because we don't have any place to put it. >> amazing grapes has hundreds of thousands of dollars of inventory. we need to liquidate the bad stuff so we can reinvest into the inventory that sells with good margin. i want to get rid of all this
stuff under here. we want to de-clutter this place big time. whoever this artist is, call them and have 'em pick it up. >> i will, yeah. >> here's what i'd like to do tonight. i want to have liquidation, any excess overstock, anything we have too much of. literally blow stuff out. do we have an email list or anything we could send out to people? >> absolutely. >> for, like, an alert. >> that's right. >> okay. >> in order for the staff to push the food, they need to know the menu, so we're having a tasting. what's the hottest-selling item on this bar right now? >> both: pizza. >> really? >> i'm not a bread person, so-- >> i only care about what sells and what the margins are, not about what brian thinks tastes good. >> the mac and cheese kind of looks glisten-y. i'm not getting any truffle on it at all. >> it's very subtle. >> it's very subtle. >> yeah. >> there's a right way and a wrong way of being helpful. brian is doing it wrong.
gerri, we think you do an amazing job. what is all that? >> it's greg's band. >> he's never here to work, but he has time to come have his band here? >> i guess so. >> how often does he do this? >> about once every month. >> sounds like more often than he actually comes. >> no comment. >> basically took over half the place. how does the rest of the team feel about this? >> it's just loud, and the customers are kind of put off by the atmosphere, and they kind of do a turn and walk to the door kind of thing. >> all right. i'll catch up with you in a little bit. >> all right, marcus. >> hey, man. >> hey, marcus. >> i don't understand. everybody's working inside, and you're driving around in a good humor truck with your music equipment. >> no, i'm work--i'm getting ready for working tonight. you watch, you see tonight. this place is gonna be packed. >> greg, i got to tell you something, this is ridiculous. this is a good example of what's wrong here. you're not focused on the right stuff. hey, gerri, this is nuts. >> little bit. >> i mean, this stresses me out. >> [chuckles] yeah. >> how many seats will we actually lose? how many--
>> i mean, at least-- >> that's 40 at least. >> at least 40 to 50. >> yeah. >> and what does an average customer spend on-- >> probably $35 a head. >> are you [bleep] me? how much do you pay this band? >> 350. >> how much do you have to do in sales to pay $350 on a band fee? $1,000? on 35% margins? >> yeah, probably, yeah. yeah, maybe, yeah, yeah. >> that just seems crazy. hey, greg, walk me through why you think this is a good business idea. >> because it packs the house. this place will be standing room only, and-- >> uh-huh, and how does that equate into dollars? >> it has proven to be the biggest nights. i think we've actually hit 4,000 in one night. >> and you have the empirical data to support that. >> yes, we do. >> i think the issue for me is that the employees are telling me something totally different. >> i don't think i'm mistaken. >> mike's telling me something different, and gerri's telling me something, this young lady's telling me something. they're not good nights for them. >> you're wrong. >> greg have you guys ever dialogued about this as a team? >> honest to god, marcus, i leave that up to mike. i don't have these meetings with them like he does. financial data typically isn't shared with employees, at least not in my opinion.
>> do you normally have a good night? >> not considering what we could do on a busy night. we could make 200 bucks apiece. >> and how much will you make on a night like tonight? >> 100 to 120. >> so half. >> for, like--yeah. >> i keep being told, "oh, no, this is a good night." you seem to be the only one that has an issue with it. >> i'm the only one who's speaking up. when you're not here enough to know what's going on, it's really honestly hurtful and insulting because we care about this business just as much as you do. >> i'm doing this as trying to help you guys to make more money. >> what it does is it creates animosity amongst the staff. i wish that over the last year or two, you had the same passion for the business. >> well, i have. >> no, you haven't. you wouldn't be losing money. are you the [bleep] police telling me what i need to do? greg's not in charge anymore. i'm in charge. [bassist] two late nights in tucson.
blew an amp.but good nights. sure,music's why we do this,but it's still our business. we spend days booking gigs, then we've gotta put in the miles to get there. but it's not without its perks. like seeing our album sales go through the roof enough to finally start paying meg's little brother- i mean,our new tour manager-with real,actual money. we run on quickbooks.that's how we own it. >> good morning. >> morning, marcus. >> good morning. >> how did we do last night? >> we got the totals here. >> greg the owner took over the bar with his band. he insists it's good for
business, but the staff says the band nights never make as much money as he thinks they do. i'll let the numbers tell the story. how do they look? 'cause when i talked to gerri last night, she said it was dead. what did you experience? >> dead. >> so the total customers we saw were 82. >> correct. >> what would we normally see on a saturday night? >> 40 more, 50 more. >> so 50% more. >> potentially. >> how was food last night? >> 741 was-- >> so how does that compare typically? >> typically 1,000 to 1,300. >> so almost half. that's terrible. >> it's the worst. >> i walked away with $11 in cash tips. >> $11? >> in cash tips. >> that's nutty. i mean, we lost money. by the time you pay the electric bill and the rent, 'cause we're not factoring all those things, you lose money. we are not here to lose money. so if you had to identify the single biggest problem from last night, what is it? >> the band itself. >> it's not the right venue for them. it doesn't fit. >> it's obviously not working
out. his band cannot play here anymore. do you know where greg is? >> i have no idea where greg is. >> mike, you seen greg? >> have not seen greg. >> has anybody heard from greg? >> no. >> okay. okay. it's the same old story with greg. i've made several attempts to try to reach him, but he doesn't answer. he says he wants to be involved, but i haven't seen that yet. oh, hey, guys. >> hey, marcus, how are you? >> how are you? so i brought in a contractor, and we're gonna start making changes immediately. the sooner we have a new layout, the closer we'll be to making money. i need to figure out how to change the look and feel of the place. it doesn't feel inviting. >> is there anything that you really want to keep? i'd like to keep the exterior walls. >> [laughs] okay. >> this is the kitchen. >> oh, wow. >> so ideally, i'd like to go that way. >> okay. >> in here, i really want to have this bar jut out into the middle of the store so that when i come in the front door, i'm seeing a really nice bar all the
way around. so i'd like to get started tomorrow. >> okay. >> we're all getting ready for one last night of business before this place gets a major overhaul, and we're not telling anybody our plans yet. >> marcus, the mayor was in here tonight. i told her that i thought there was gonna be some changes and that-- [people cheering] she asked about what those changes were. i said there was gonna be an expansion of the bar. we're gonna re-merchandise the retail. >> at the time that you opened your mouth, did you know what was happening? >> you're gonna expand the bar, right? >> no. this guy's been here less than a week, and he's off telling everybody what our plans are. that's not gonna work. are you the spokesperson of the business now? >> i had an idea, and i told her it was just an idea. >> did you check with these guys before talking to them? >> no. >> talking to the mayor about changes that are gonna happen here, yeah, that shouldn't have happened. >> i was trying to be proactive because-- >> but nobody asked you to do that. >> but it was an opportunity. >> but--let's go outside,
'cause i can't hear in here. brian may have had good intentions, but he doesn't even know what my plan is. he shouldn't have been communicating with anybody. that's not his place. why did you think that was the right thing? >> because you need to go through a process-- >> what, are you the [bleep] police telling me what i need to do? >> well, i'm telling you what-- >> i have people that are in place. who designated you as the person that needed to figure that out? >> nobody did. i was taking-- >> so then why did you take that upon yourself... >> because i took an oppor-- >> to communicate what you thought the plans were? you're talking out of your ass. >> that to me, in my mind, was the best thing for this business. there really isn't any direction. it is a rudderless ship. am i--am i talking out of turn on that? >> no, man-- >> you're talking out of your ass is what you're doing. you've been here a [bleep] week! >> all i'm saying is--and i think, you know-- >> i rarely lose my cool. >> well, and i don't want you to. >> you stepped way the [bleep] out of bounds. >> but i was trying to be proactive. >> who hired you? >> greg did. >> okay, well greg's not in
>> the next afternoon, everybody's clearing out the entire space so we can get ready for construction. and the fun part is letting out a little aggression. >> oh, my god. [laughs] >> that's some-- >> whoo! >> there you go. >> ahh! >> oh, ho ho! >> there you go! >> oh, my god! >> while the store is shut down for construction, i thought i'd take the staff out for a fun activity to teach them about margins. hey, guys. before we get started in here, i wanted to walk you through why i wanted to bring you here. this vineyard gives us the ability to have a relationship directly with them as opposed to through a distributor. i want to make sure that we're really thinking about ways to enhance margins. why don't we go meet these guys and see what's going on. >> marcus, can i get a minute with you? >> yeah. >> i just wanted to clear the air. you know, i'm trying to do what's best for this business, and i've been in it a long time, and i think i can bring a lot to the table. >> as long as you and i can have an understanding that if we're gonna have good ideas, let's
just communicate and collaborate about 'em. >> all right, let's go. thanks. hi there, i'm marcus. >> welcome, marlowe. >> marlowe, nice to meet you. >> nice to meet you. >> al paul. >> al, nice to meet you. tell us a little bit about yourselves and what you do here and how we can partner together. >> well, we're kind of unique here. we're an urban winery, and we source fruit from napa and sonoma regions mainly. and also included in there is our private label program. this is the pinot gris 2012 vintage, north coast appalachian. >> okay, so this glass here? >> 13 a bottle. >> what would we buy this similar wine for if we weren't going direct to the vineyard? >> the $16 range, so it's right there, it's right in the sweet spot. >> so there's some savings in going this direction? >> absolutely. >> and if you pick a portfolio of our wines, we can do better than that price. >> oh, no, we're gonna be in the nines. $9, $10. [laughter] >> by the time he's done. >> yeah. >> have you guys met marcus lemonis? [laughter] >> private label products like
this will dramatically improve your margins, but in order to make room for these kind of products, we need to clear out the stuff that's been sitting there for years. so when we get back to the store, i'm gonna have dan lower the prices and liquidate some of the slow moving merchandise. thanks, guys, appreciate it. >> thanks again, marcus, appreciate it. >> thank you. >> thanks, marcus. >> thanks, guys. all right, let's head home. >> this end's coming all the way out, correct? we're gonna move this all the way down? >> well, you want to move it out enough to accommodate for that. don't go any further than that. so i would be very technical in my measurement to not go past that. >> understand. >> yep. >> put a pedestal here-- >> hey. >> hi. >> how are you? >> i'm good, how are you? >> good. >> i'm a little shocked. we're out of business. >> we were out of business before, we just didn't know it. >> i believe we're still partners, correct? >> mm-hmm. >> partners should talk to each other, especially if we're making these kind of changes. >> right. >> i wasn't told, "hey, greg, we're guttin' the place." >> and i don't want to keep getting back to the same thing of, "well, you could've been here," but you could've been here. there are other partners now,
right, the employees are partners too, and mike and dan and the rest of the team, they were part of this process. >> but if there was a plan, you could've emailed it to me. you have my email. you have my phone number. >> 76% of the owners decided that we needed to move forward. >> i'm really starting to get annoyed. we're still partners, damn it. >> as long as you're here, i will include you in the process, but you weren't around. when someone calls me and tells me to come help them fix their business, you just have to be here. that's it. >> i'm here to tell you, it's not gonna work the way it's working right now. i'm tired of being disrespected. you been treating me like i'm a moron. i don't know what the hell i'm doing. i invited you into this place because i thought you could help me. ugh, it's just frustrating me is that i'm not an idiot. this has really pissed me off. >> if your business is in trouble and you need my help, log on to theprofitcasting.com.
>> when someone calls me and tells me to come help them fix their business, you just have to be here. that's it. >> it's just frustrating me is that i'm not an idiot. this has really pissed me off. [bleep]. we got to be better partners than this, period. >> i know that you feel left out, and i sense that, and i think the only way to fix that going forward is for you to be present. >> i have one condition. >> oh, i'm not--you're not gonna give me-- >> no more disrespect. >> you're not gonna give me conditions. >> no more disrespect. >> i don't function well with conditions. >> one more request. >> no problem. >> we have a mutual respect for each other. >> great, then you just have to be here. but if you're not here, the train's gonna leave regardless. >> fair enough. >> and as long as you understand that, we're good. all right?
my goal with this renovation is to integrate the two businesses that are here. i'm moving walls to make the kitchen larger... and extending the bar and making it a beautiful centerpiece. i'm also putting in new flooring to enhance the open space we've created. in all, i spent a lot of money in this renovation 'cause i really wanted to get it right. [laughs] [claps] >> hey. >> oh, my gosh. how are you? >> both: good to see you. >> good to see you. >> looks great. >> unbelievable. >> i am blown away by the transformation of this space. i've spent well over $300,000, but i wanted every square inch of this place redesigned so we can focus on high margin business. our cluttered retail wine space has been cleaned up.
we now highlight all of our offerings in display cases around the store. the new display makes it easier to navigate and find wines, especially the high margin ones. the new kitchen is great. i've given them the necessary space and equipment to produce more. the biggest change of all is the wine bar. it's no longer hidden in the back of the business. we now have a beautiful, two-sided wine bar, and i've even tripled the amount of seating and added lounge chairs to create an open floor plan that finally unifies the retail business and the wine business into one, allowing us to serve more food and wine to our customers, ultimately increasing our revenue and our profits. i actually think it came out better. >> has the family style feel. >> yeah. it's just hours before our soft opening, and dan is re-pricing the wine to make room for our high margin items. >> hey, dan. what's up? >> pricing all the wines that we are blowing out. >> i know we're trying to reduce
inventories. i'm just raisin' the flag that it's been an issue for as long as i've had this place. we've never made a profit because we've never charged enough for our product to outrun our expenses. i think we sell too low. you know, like, something like this, 9.98. we can go up a buck. >> it's competitively priced. >> i feel that i should have the final say on the pricing of wine for the mere point of check and balance. otherwise, without a check and balance, you're free to do whatever you want. >> okay, look, i refuse to have to come to work and feel this way anymore. going forward, i'm in charge. >> i don't give a crap if you think you're in charge just because you've been anointed all of a sudden. if you're wrong, i'm gonna tell you you're wrong. >> it's not your place anymore. >> yes, it is my place. >> you're done. >> but i'm not done. i still have a percentage in this, dan. that does not mean done, not done done. >> your percentage now is silent. >> no-- >> we don't want your input. >> i'm not gonna be silent. >> stay out of my business, okay? >> it's our business, dan. >> buying and selling and pricing wine is my business now. stay out of my business. i'm done.
>> greg was completely disrespectful. he told that i am basically not following direction. the way i took it, marcus, was, is he was trying to beat on his chest of--he's the watchdog and--he's gonna address it with you. >> well, let's go talk to him about it. >> sure. >> yeah. our soft opening is tonight, and dan and greg are fighting. this is not something we need right now. >> hey, greg, got a second? >> yeah. yes. >> you guys had an issue? >> the issues are that the margins are still performing the way they've always performed for the last five years. >> right. >> which is why we've survived. >> no, it isn't, dan. that's why we're in the position we're in today. >> you are just so clueless. >> we still have a problem. we don't have high enough margins. >> we don't have a problem, greg. >> yes, we do. >> no, we don't. >> 19% of margin isn't gonna get it done. >> marcus doesn't think we have a problem. >> greg continues to play monday morning quarterback. he's had eight years to figure this out, and all of a sudden now, he wants to complain about the fact that the margins aren't good enough. but i know this isn't about margins. greg is just frustrated that the
business has slipped out of his control and he's not in charge anymore. >> this part's doing well. this part isn't. >> not doing well according to you, greg. >> margins--dan, this isn't my first rodeo. >> i gave dan the direction to take certain things that we have excess of, and just blow 'em out. it's ultimately his decision how we buy wine and how we do all that stuff. >> okay, listen. i tell you what. thank you very much for coming in. >> you're gonna apologize. i'm not gonna shake your hand, man, you owe me an apology. >> see you later. >> i'm not gonna apologize, dan. >> i know you're not, 'cause you're a narcissist. i've had too much history with this guy. he treats me like [bleep] and i'm sick of it. >> well, so here's what i think i would do if i were you. >> [bleep] off. don't tell me this stuff anymore. this bale of hay almost derailed the ranch. when a wildfire raged through elkhorn ranch,
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>> okay, listen, i tell you what, thank you very much for coming in. >> you're gonna apologize. i'm not gonna shake your hand, man, you owe me an apology. >> see you later. >> i'm not gonna apologize, dan. >> i know you're not, 'cause you're a narcissist. i've had too much history with this guy. he treats me like [bleep], and i'm sick of it. >> let me let you guys talk. >> greg, where you going? >> home. >> why? >> i'm clearly not wanted or needed here. >> no, i don't think that's the case, greg. >> oh, clearly it is. >> no, it's not actually. there's got to be something more. what's really bothering you? >> i don't like the fact that my employees have kicked me to the curb. that's what's bothering me. and their attitude and their responses? dan is saying, you know, basically, "[bleep] off, don't tell me this stuff anymore." >> i think what we want to do is we want to let people do their job, right, hold them accountable, and if they fail, we'll deal with it. >> i got it now. >> all right, well, come on back in. >> i didn't get it-- >> come on back in, come on. >> i'm not gonna go through any more of this crap. >> okay. well, then just stay away from him. so come on.
>> no, keep him away from me. >> [laughs] okay. >> i don't see myself walking away from amazing grapes. our employees are fantastic. quite frankly, they're the backbone of this business. even though marcus doubts my personal commitment, i'm gonna prove to him that i'm still very much committed to this business. [indistinct chatter] >> mike, it's crazy... >> yeah, it's--yeah. >> how busy it is. >> it's been unbelievable. the response has been tremendous. >> what's happened with the actual revenue, the sales? how have they been? >> off the chart. off the chart. our best saturday night if we were lucky, we may do 3,000. we're seeing almost 8,000. so it's-- >> in one night? >> in one night. >> that's just bar and restaurant. >> just bar and restaurant, exactly. crafted beer, the draft beers, we would normally do maybe $200 in sales. we're looking at, like, $4,000 in sales. >> oh, my god. >> it's like--it's unbelievable. >> you know what i'm most excited about? when i look at how much business
the company used to do and how much more it's doing it now, and i see the margin improvement. i mean, we're making money already. >> we're making money already, yeah, and it'll only get better. it'll only get better. >> i'm proud of you. >> thank you for the opportunity. >> absolutely. >> it's been outstanding. thank you. >> absolutely, thank you. >> dan, give me an update on what's happening. >> the numbers are great. it's been around 8 to 10,000 in sales. >> is that better than it used to be? >> yes, it's--yes, it's actually better than it used to be. >> how much? >> i'd say by 10% to 15%, and i just see it growing from there. >> how are you feeling about the cross sales, and now that people are eating here, are you noticing people buying bottles to go more often? >> you know what's amazing is, they're not only buying bottles to go. we're selling more bottles to be enjoyed in house, and we're seeing people actually get up and come over here and peruse because it just--it's presented in a clean, easy-to-look-at display now. >> yeah. all right, great job, buddy. >> thank you so much. >> great job. i wanted to grow our margins any way we could, so i created a private label house wine,
amazing grapes wine. you guys, you know, we went to that vineyard... >> yeah. >> um, and we talked about improving margins, and so we had these bottles made, and we'll essentially be not only serving these at the bar. >> mm-hmm. >> we'll have 'em available for sale as well. >> oh, nice. >> and it allows us to sell wine at the bar, get a nice margin by the glass, and keep everybody happy. >> i love it. >> so congratulations. you guys can break it open. >> yeah! [laughter] >> this was one of the better experiences i've had in fixing businesses, 'cause i got to work on the front lines with the people that actually make the business run. in the last several weeks, they've been averaging $80,000 a week, just under $4.2 million a year, a $700,000-a-year increase in business. we are well on our way to making a lot of money, and these employees are gonna get a nice bonus check.
-you're steven, also? to-steven: yes. profit"... lemonis: three generations right here. steven: right here. lemonis: a multigenerational custom-furniture business... do you and your dad have blowups here? steven: all the time. lemonis: ...struggles to stay up with the times... [ screeching noise ] steve: some of the machinery here are 50 years old. lemonis: ...and a father who won't give up control... steve: do you have a packing list? steven: are you really gonna micro me again right now? steve: please. lemonis: ...leaves a son struggling to make his mark. steven: oh, my god. lemonis: if i can't bring these two together... steven: when it's done, it has a sticker. if this doesn't have a sticker, is it done? -steve: no, it's not done. -steven: okay. lemonis: if he can't do the job, you fire him. ...there may not be a next generation of grafton furniture. your grandfather was here. now your father is here.
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