tv The Profit CNBC December 17, 2018 3:00am-4:00am EST
during business hours. this is cool. ...a manufacturer and a retailer with a unique product... is everything in here cork? amanda: yes. lemonis: ...experienced early success and expanded to four locations, but owner amanda dailey's poor communication... amanda: [ chuckles ] we moved. lemonis: i don't remember ever talking about moving. ...and her reckless spending... credit-card fees -- $257,000. ...is putting this once-buoyant business at risk. amanda: if we don't stop this cycle of borrowing and not having enough money to repay things, there's no way we can survive it. lemonis: if i can't teach amanda how to put a cork in her mounting debt... it's almost like everybody has just gotten comfortable
with a huge space and [bleep] collecting, and it doesn't really matter because julie will just write another check." ...then this business... what the [bleep] ...may just crumble. please help us make money. please help us make money. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not going to wake up every morning wondering if we have a job. we're going to wake up every morning wondering how many jobs we have to do. it's not always pretty. everything is going to 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." ♪ new orleans is one of those cities that always stands out, and whether it's the food, the music, the architecture, it's just a really fascinating place, and it doesn't look like anything else in the states. so when a local business reached out
and even their product was unique -- everything they make is from cork -- i headed to the french quarter to check it out. amanda: hello. lemonis: hi. amanda: i'm amanda. lemonis: i'm marcus. amanda: nice to meet you. lemonis: nice to meet you. amanda: so welcome to queork. lemonis: this is cool. is everything in here cork? amanda: yes. there's bags, jewelry. lemonis: hats, place mats. what is cork? amanda: it's the outer bark of the cork oak tree. it grows mainly in portugal and spain. lemonis: are there cork trees in...? amanda: california, yes. i actually tried to bring one back here. actually, julie told me not to. lemonis: are you julie? julie: yep. julie. lemonis: i'm marcus. julie: hey, marcus. very nice to meet you. lemonis: nice to meet you. julie: welcome to new orleans. lemonis: thank you. how long have you guys been in business together? amanda: since 2012. lemonis: okay. what did you do before? julie: i'm a lawyer. i still am. that's my day job. lemonis: okay. uh-oh. julie: yeah. sorry. sorry. amanda: i was a builder. i built townhomes and condominium developments. lemonis: how many stores do you guys have? amanda: four. lemonis: really? amanda: yeah. so two here. julie: two here. amanda: we have one in santa fe, new mexico. lemonis: oh, you do? amanda: and then we opened one in santa rosa beach, florida. lemonis: well, first of all, is that how you spell "cork"?
amanda: no. [ chuckles ] julie: she was so obsessive about it. i was like, "you are the queen of cork." lemonis: because phonetically, it's said almost the same, quee-ork or something. amanda:
yeah. that's what siri said. lemonis: that's what siri calls it? amanda: mm-hmm. julie: yeah. lemonis: hey, siri, where can i buy cork in new orleans? siri couldn't find any matching places. lemonis: am i saying it wrong? is it "quirk"? amanda: maybe she thinks it's... lemonis: how do you -- siri: i have everything i need in the cloud. lemonis: i get it, but not cork. amanda: yeah. lemonis: can you find quee-ork in new orleans? amanda: [ laughs ] siri: here is what i found. amanda: is it there? lemonis: yes. julie: yeah. see? [ laughs ] lemonis: can you take me through some of the products? because i'm honestly fascinated. i know nothing about the product. so there's hats, place mats, messenger-type... amanda: bags. lemonis: ...bags like an ipad. amanda: travel. yeah. it's hypoallergenic, waterproof. lemonis: it's waterproof? amanda: yes. julie: yes. amanda: it floats. lemonis: really? amanda: oh, yeah. lemonis: oh, yeah. i guess that makes sense. julie: yeah. we get that question all the time.
it's, like, it's a bottle stopper. amanda: scratch-resistant, stain-resistant, it won't ever smell. lemonis: so it's good for your feet. amanda: yes. lemonis: makes your feet not smell. amanda: this is actually the ax that
they use to cut the tree. lemonis: this is it? amanda: uh-huh. yeah. lemonis: oh, yeah. amanda: they put it into a tree, and it knows just about where to go. lemonis: this is how i feel when i meet a small-business owner that doesn't know their margins. amanda: [ chuckles ] lemonis: it's a pretty store. it's well-merchandised, but literally every single thing in there is made of cork, and i was hoping that i would see some diversification of materials, maybe a little canvas or a little leather mixed with cork, and while the products are beautiful, i wanted to see a little more pizzazz. how much have you guys invested since you started? julie: close to 200 grand. lemonis: $200,000? amanda: yeah. julie: yeah. so... lemonis: and have you put any money in? amanda: no. lemonis: okay. amanda: i just work the store. lemonis: and where do you office out of? amanda: out of where we manufacture. lemonis: and you have a manufacturing facility? amanda: mm-hmm. lemonis: and you have all this for 200 grand? amanda: oh, yeah.
lemonis: that's not bad. julie: well, we do -- amanda: there's more debt is the thing. julie: there's debt also. lemonis: how much total capital has been invested in the concept, whether you borrowed it or put it in? amanda: i mean, probably around $400,000. lemonis: does it lose money? amanda: yes. this last year, it did. lemonis: do you wholesale any of this product? amanda: no. lemonis: how come? amanda: our biggest problem in the store, in these stores, is keeping it stocked. we're always running out of the most popular products. the problem is just having the manpower to be able to make more. julie: neither one of us had any experience whatsoever in any sort of retail. amanda: when i started it, it was just me. then i went to julie and asked her to partner in. lemonis: was she your lawyer, or is that -- you were like, "i'm going to get a contract"? amanda: no. we're a couple. lemonis: you guys were already together at the time? julie: yep. amanda: yes. lemonis: how long have you guys been together? julie: seven years. amanda: yeah, eight years. julie: seven, eight years. lemonis: so longer than the business has been around? amanda: yes. julie: yeah. lemonis: and your relationship has lasted through the business, no problem? amanda: yes. julie: no problems. lemonis: none? amanda: well, i mean, honestly, like, because she doesn't have much to do with the business at all.
lemonis: except she's got money in it. i'm noticing an uncomfortable dynamic between julie and amanda, and you often find that when there's two partners who are owners of a business and one put up all the money and the other one put up all the work. how has it affected your relationship? julie: amanda is very competitive and she wants to do everything herself, and it's too much. and then things happen, and she gets herself in a bind. we've gone up and down in our relationship because of, you know, the arguing about it. so i just learned the other day from amanda that the debt was around $400,000, and i was just like, "really?" lemonis: you didn't know that? julie: no, and if we were not life partners, then i'd be calling her and have that -- lemonis: that's the challenge in getting in business with somebody you're in a relationship with. julie: yep. yes. [ chuckles ] i agree. lemonis: how do you take feedback? julie: she is very open to, like, learning and -- lemonis: from you? julie: not from me. amanda: she just doesn't know much about the business, and so we don't talk much about it. lemonis: what would you like her to know?
amanda: everything, and so i've asked her to help me. julie: that's untrue. we talk about it every single night. you know, she's so stressed out, and i'll be like, "amanda, what's the matter?" "ugh, you know, it's just so [bleep] up, and you don't want to hear about it," and i'm just like, "okay. i'm going to go quietly to bed because it's going to just continue to snowball," and it's not worth it to me. lemonis: almost looks like amanda keeps julie at bay, gives her not too much information to maybe expose some of her decisions. when you look at it from julie's perspective, she wants to be supportive of her partner by putting money in, but it almost feels like she's burying her head in the sand and doesn't want to know too much, either. i would like to see the factory. amanda: yes. lemonis: so can you take me there? amanda: absolutely. okay. lemonis: okay? ♪ amanda: hey. lemonis: hello. this is awesome. amanda: so this was the space that really you can't keep cool. lemonis: it's hot in here in the summer? amanda: yes. lemonis: i legitimately did not know that cork came,
like, in these sheets. amanda: yeah. lemonis: and so is this essentially a cut-and-sew operation? is that how i should think about it? amanda: yes. mm-hmm. lemonis: and who runs all this? amanda: jackie. lemonis: really you're sort of doling out the jobs, keeping people on task. jackie: yeah. yeah. amanda: and we found a local not-for-profit called the yep locally here. lemonis: yeah. what does yep stand for? amanda: youth empowerment project. lemonis: i like that. amanda: mm-hmm, and so mimi went through their program. frank and ashante went through their program. i mean -- lemonis: what's the program for? mimi: it's for youth who are looking for something to better their future, basically. lemonis: they basically give you different trade skills? mimi: yeah. you either go through sales, graphic design, or, like, the business route. they set you up for success, basically. lemonis: here? wow. what i like about what queork provides the yep kids is an opportunity to learn a skill and a trade. that's a business plan as long as it makes a profit that i can buy into.
♪ you've really done nothing that added a little bit of life to the bag, and so when i look at, like, the stitching here, like, if you did that in red or if you did it in purple and gold... have you tried to do stuff like that? jackie: amanda has certain tastes. she's not really into color. amanda: this is safe. jackie: yep. lemonis: i want to give the artists and the workers there the freedom to put their own stamp on things. we know that a basic product will sell 8 times out of 10, but i want those extra two sales. delivering the same product, making brown shoes all the time isn't going to work. also, the zippers suck. jackie: yeah. all of our hardware sucks. lemonis: really bad. jackie: yeah. one of my most frustrating things. lemonis: it just feels like you took a really good-quality construction and a really interesting fabric, and you just took it down pegs. how did you learn how to make all this stuff? astra: trial and error. jackie: trial and error. yeah. astra: we don't really know what we're doing.
lemonis: have you been to a leather manufacturer before to sort of see -- amanda: i've never been to any kind of manufacturer. lemonis: you haven't? amanda: no. astra: that would be cool. amanda: yeah. lemonis: who's responsible for all the inventory here? like, what -- amanda: that's not inventory. that's, like, the bags that we either took apart or returns. lemonis: where are all the raw materials? like -- woman: in there. lemonis: you have to keep going back and forth? when i look at this facility and the talent that's in here, it seems like a really cool way to be a market leader, a trendsetter. you can't because doesn't seem like there's much of a process here, like, no inventory management, no workflow, nothing like that. i feel like i'm in somebody's garage of things they collected over a series of years. you want to run it like a lean, mean machine, and that includes what it looks like, how it's organized. it's details, and i don't think amanda understands that. i'd like to hear from you sort of what your objectives were in calling me. amanda: well, before we started, i was in real estate, and it was a bad time for me. lemonis: personally? amanda: financially. that was kind of my identity, too, you know, and i was successful in that up to that point.
i filed bankruptcy, and more devastating than just filing bankruptcy was losing who i was. now i feel like i'm kind of failing again. i don't want this to all be for nothing. if we don't stop borrowing and not having enough money to repay things, there's no way we can survive it. it's been six years now, and we've never made any money. i've never been able to give julie a check, and that's why you got to ask for help. lemonis: you feel like your relationship would be in jeopardy if the business closed? amanda: yeah. it scares me to death to think of that. lemonis: so i would love to be able to meet tomorrow morning if that's okay. amanda: yeah. lemonis: i would like julie to be there, and i think part of you overcoming these fears that you have of the business are understanding that you have to share information even when it's bad, and maybe you don't have to bear the brunt of all the solutions on your own. amanda: yeah. lemonis: all right. have a good night. i'll see you tomorrow. amanda: all right. thank you. lemonis: yep. ♪
good morning. amanda: hi. lemonis: how are you? amanda: good. how are you? lemonis: good to see you. how are you? julie: good. lemonis: so i thought it'd be good for us to go over the financials. sales, let's start with that. in 2017... you have $1,491,542 in sales... amanda: mm-hmm. lemonis: ...which is a high-five on that one. i didn't know that many people actually bought cork. amanda: yeah. lemonis: okay? amanda: it should be higher. lemonis: cost of goods is $466,835, so you had $1 million in gross profit, an unbelievable margin, spectacular. so the way to think about it is, with that, about $1,024,000, you have to pay all your bills -- $231,000 of rent, utilities at $35,000. supplies -- $25,000. furniture, equipment and improvements -- $40,000. payroll at $507,000 for the year. advertising is $125,000.
credit-card fees and loans -- $257,000. amanda: so that's principal and interest. lemonis: you're spending more than you're generating, simple, so the cash that came into the business is the amount of her original capital, $200,000, plus all the debt, $463,000. that totals $663,000 of money that has come into the company. so let's talk about this $85,000, taxes payable. when is that due? how old is it? what's -- amanda: it's past due. [ sighs ] lemonis: that is something that scares me to death because the shareholders of the business are personally responsible for that. did you know that? amanda: no. lemonis: you can't hide from taxes. i can't fund into a situation where i'm going to have any risk
that that's going to happen to me. i just can't do it. ♪ amanda: i didn't know it would do -- i didn't know at the time that this is what would happen at all. [ clears throat ] lemonis: i just don't want to do it. ♪ if your business is in trouble and you need my help, log on to theprofitcasting.com.
i can't fund into a situation where i'm going to have any risk that that's going to happen to me, and so... julie: i can pay that off. i can pay off the $85,000 and just becomes more of my equity share. you know, it's a way forward. i know it's scary, but don't let fear hold you back. lemonis: i'm not sure that amanda necessarily recognizes the magnitude of julie making this decision. your partner stands up and solves a huge $85,000 problem that potentially could've blocked the deal from happening. i mean, maybe it's stand-up-and- give-somebody-a-hug time. i'm willing to go in for a couple of reasons, but it's largely driven by julie is just like, "i'll continue to help," which means she believes in it
and she believes in you, so i'm willing to invest $150,000 into the business. but i'm going to want to own 50% of it. you're going to need more resources than money. you're going to need distribution. you're going to need to find out how the wholesale market works. amanda: i think my biggest hang-up is the percentage, is 50%. i feel very obligated to make sure you get paid back. i think if you bought in at 1/3 and we all could be 1/3 partners... lemonis: okay. amanda: ...i'd be great with that. lemonis: okay. then i'll put in $120,000. amanda: okay. are you good with that? julie: yeah. amanda: yes. lemonis: and this gets cleaned up? julie: yes. lemonis: we're going to make sure the taxes get paid so that we're not exposed. you will not be able to have control of the financial decision-making like you did before. amanda: please. lemonis: okay. [ trombone playing ] really? amanda: yeah. lemonis: only in new orleans. julie: i know. amanda: i know. that's why i didn't even look, because i'm used to it.
lemonis: honestly. we have a deal? amanda: we have a deal. lemonis: okay. julie: thank you, sir. lemonis: thank you, and thank you for believing in her. julie: tear up. ♪ lemonis: i thought it'd be a good idea to just get as many people from the team as we could together. so i decided to invest $120,000. i would say that the program that you guys came through -- i would say that was probably my single biggest motivation. if you wanted to hire two more workers tomorrow from the yep program, could you find them? jackie: for sure. lemonis: let's find people that need a chance, that want to make money, that are super talented and have them join our team. so we're going to get in the wholesale business. jackie: yes. astra: you guys might lose me from the factory if you do that, though, because i have a sales background. i'm warning you. lemonis: if you love selling and you're the -- astra: i do. lemonis: ...and you're part of making it, then you're going to come with me when we go wholesale it. we're going to make dramatic changes in the stores. i don't feel like the stores do a really good job of telling the story of what it is
and how it works and what are the attributes of the product, that it's handmade in new orleans by really cool people. you have a lot of education to do for consumers. it's just a much bigger story. candidly, i'm questioning the quality on some of the items. in order to go wholesale it, you're going to have to make it a lot better. amanda: right. lemonis: and the warehouse honestly was a disaster. it looked unkept. it looked unorganized and should have the proper equipment. it should have the proper inventory system so they can grab from stuff. also, i want to see if there's a way to add a couple more textiles to the mix. jackie: i've been waiting, waiting for the chance. lemonis: if it's leather, canvas, or something, i want to try to break out of everything just being so one-dimensional. ready to go back to work? man: oh, yeah. jackie: yeah. lemonis: okay. i'll see you at french quarter. amanda: yes. ♪
lemonis: so let me tell you what i want to do. i want to understand sales conversion so number of people that walk in and the number of people that leave with a bag. it's a real big deal for me. customer conversion is increasing the level of information or enthusiasm in the initial stages of meeting to increase the possibility of converting to a sale, how to take a lead and transact through the register. all right. so, you guys, work the store. i'll work the door. amanda: okay. lemonis: okay. you ever seen cork? man: not quite like that. lemonis: this is actually what cork is. it's a layer around the tree, and then you'll see what they do with it inside. come on in! caitlion: we source all of our cork from portugal -- best quality, biggest industry. lemonis: come on in. everything inside is made of cork. do you know where cork comes from? man: cork? no. lemonis: okay. do you know where it comes from? woman: from a pig. lemonis: from a pig? woman: you said pork. woman: from the tree. lemonis: cork. woman: oh, okay. lemonis: amanda... amanda: yes?
lemonis: ...come on out. amanda: all right. lemonis: come on over here. what does amanda need to do better to get people in the store to understand about queork? woman: maybe stand out here and talk to people as they're walking by and get them to feel it. amanda: right. lemonis: on that idea, i'm going to grab an apron. woman: nice. lemonis: would you like to feel my apron? woman: yeah! i know. lemonis: anytime you can engage with a customer, a little bit of enthusiasm may actually turn into more sales. so how would you describe your selling style? amanda: i'm not a bubbly sales person. julie: she's way more quiet and introverted. she wouldn't go out there and drag somebody in here. amanda: i don't like being pushy. lemonis: i'm not asking you to be pushy. amanda: right. lemonis: it is true that you'll have to come out of your shell, but i need you to have enthusiasm. amanda: right. lemonis: we saw a lot of people in one hour. amanda: mm-hmm. lemonis: how much do you think we did in an hour? amanda: probably -- lemonis: is there a way to look? julie: yeah. amanda: yeah. lemonis: let's look. what is the sales for the day? $6,193. what does this store normally do on a day like today? amanda: $3,000 would be good. chance: mm-hmm. lemonis: so a good day? amanda: yeah.
lemonis: and so i think part of what we learned today is, what's the missing element that would drive conversion up? woman: knowledge. lemonis: education, right? knowledge. woman: yes. lemonis: tell people what the heck this is. okay, guys. thank you. amanda: all right. ♪ lemonis: it's been two weeks, and i'm back in new orleans. and i'm excited to see what improvements to the warehouse the team has come up with. joey: welcome back. lemonis: thank you. this looks like new stuff. joey: yeah. i made those for you to see. so this is all scraps that we have, and there's suede and leather and cork, and i just kind of mixed them all together. lemonis: these are awesome. joey: thanks. lemonis: really good. don't you think? amanda: well, you know i'm not a color person. lemonis: who made this? joey: jackie. lemonis: this is solid. jackie, my only feedback on this is straps. they're too short, and then back to the hardware issue. it's just really junky.
where are, like, the zippers organized? like, where is everything? astra: in there. lemonis: and why -- so you have to just keep going back and forth? astra: yeah. lemonis: and so why wouldn't you have it over here close to where you're working? joey: this whole place needs to be reorganized. i think we all agree on that. astra: definitely. joey: yeah. lemonis: what is all this? amanda: well, that's scrap. lemonis: all of their accessories are all over the place. there's no one place for the finished goods to be. you're asking the folks to be more efficient and be more profitable, but you're not giving them the tools for success. i guess the frustration that i have with you is that if you guys had a limited amount of space, what would you do? and if you had a limited amount of resources, what would you do? and it's almost like everybody has just gotten comfortable with [bleep] collecting, and it doesn't really matter because julie will just write another check. ♪ that's how it feels. i don't want to put all this pressure on you, but right now, you're trying to sell a commodity and the story doesn't resonate.
lemonis: it's almost like everybody has just gotten comfortable with [bleep] collecting, and it doesn't really matter because julie will just write another check. frank: i think it's lack of communication, though. like -- lemonis: is it? from who? frank: from, like, us as a team. we're not communicating with one another on, like, "man, here, put this up." let's stop looking at this and organize this this way. lemonis: well, let's get everybody else and talk about that. what i'm noticing in amanda early on is that while she may internally possess the qualities to be a good leader, she doesn't have the ability to express those things. it's confusing to me why the place looks the way it does. it's in total disarray. it feels like nobody really gives a [bleep] astra: i feel like there's no rules structured around accountability. stuff doesn't get put away. nobody is in charge. lemonis: so how do we move the ball forward today? astra: let's get rid of all those little,
tiny zippers and all those bins. lemonis: we're going to get rid of everything. ♪ ♪ amanda: oh, this is scraps. we need that. lemonis: amanda, they need leadership. who's leading them? this is more on you than you think. amanda: you know, i'm being pulled in so many directions. i'm not doing a good job of it. every day, i do tell them, "it needs to be cleaner. it needs to be more organized." lemonis: yeah. i can sense that you're feeling overwhelmed. we need to translate how hard you're working into just working smarter, good inventory management, good raw-material management, good production flow. amanda: i'm all for that. i definitely am. lemonis: but let's all-for-it to the truck. amanda: right. let's go. ♪ lemonis: after meeting the kids that work at queork and hearing so much about the yep program, i asked amanda to set up a meeting at yep. my goal in this company is to have the bulk of the workforce
come out of the yep program. we need website redesign. we need logo improvement. we need packaging. we need a tag. we want to have a combination of design works, bringing people on to work under frank on the floor. man: i can tell you is this -- where you at now is going to lead to something else like that. it's crazy because i didn't know how much i was into sewing until i got in front of a machine. lemonis: who's interested in getting involved? let's get the buses moving. man: let's do it. lemonis: thanks, guys. we'll see you soon. [ chatter ] we got everybody? i also wanted to take the team to new york city for one of the coolest field trips ever, and our first stop is botani, one of the greatest resources for hardware in the entire city. i wanted them to see not only what was available to them, but i wanted the resource to be available. buy whatever zippers you guys want, whatever hardware you want, and then take it back and put it on product. man: these italian-made zippers -- you're not going to get any better than this.
♪ lemonis: i also wanted to take the team to unionwear. woman: oh, my god. lemonis: it's a large-scale manufacturer in new jersey that specializes in a similar-type manufacturing that queork operates in today. i want the kids and amanda to see if we grow big enough, this is what's possible. man: you notice everything is really organized here. we got our setup time down from about three hours down to about 15 minutes on embroidery, just looking for thread. amanda: wow. man: it would be way, way easier, son. frank: yeah, yeah. lemonis: we're improving the process and the quality of our products, but i want julie and amanda to understand how critical it is to enter the wholesale market, so we're flying across the country to meet with a potential customer that could be huge for business. so the reason that i brought you to ferrari-carano is, they're one of the biggest vineyards in all of northern california. is there a way to take the product that you make and penetrate wine country and really see if there's a way to expand the business?
in order to grow our wholesale business, we need more lines of revenue, and when you think about cork product, the first thing that normally comes to your mind, of course, is the cork on a wine bottle. and having been to wineries, i know that all of them have gift shops. i also want to see how you explain to the people that are here what your business is and why you're in it. amanda: okay. lemonis: so let's go in. amanda: all right. oh, it's beautiful. patrick: this is a cork tree. lemonis: holy moly. amanda: they cut into it, and these guys, usually the grandfather who planted the tree -- lemonis: and it doesn't kill the tree? amanda: no. lemonis: i want to be a tree hugger. please help us make money. please help us make money. candis: hi, amanda. amanda: very nice to meet you. candis: nice to meet you. julie: i'm julie. candis: hi, julie. julie: hey, candis. nice to meet you. lemonis: this is a big gift shop. patrick: this is a big gift shop. candis: this is my baby. amanda: and so what is it that you find people... you know, you have your best sellers in here or...? candis: yes. yes. lemonis: candis, did amanda tell you what she does for a living? amanda: i'm sorry.
lemonis: i don't sense that they really understand what's at stake. amanda: we specialize in cork fabric and make everything from cellphone cases to handbags. candis: okay. lemonis: we need the business. we have to have it. the program with the kids depends on it. amanda: if you went to another winery, would they have a lot of the same things in here? candis: we try not to. amanda: okay. lemonis: i mean, it's like, "want to buy some cork product? no? okay." like, hello. candis: but every time they leave the store, we want something to go as a memory. yeah, and what i feel the customers will, you know... amanda: buy. candis: ...buy, enjoy. yeah. lemonis: are you bored? candis: but... lemonis: why, yes, i am. amanda: is it important to you guys to have things personalized with your winery name or...?
lemonis: honest to god, i can't even stay [bleep] awake. look, my problem with amanda -- it's a confidence issue, and i'm really struggling in my confidence with her as our company's leader. what is amanda going to do when i'm not here? candis, let me make it a little easier. look at their shoes. candis: cute. lemonis: look at their bags. candis: cute. lemonis: look at their belts. candis: i love your shoes. julie: thank you. amanda: thank you. lemonis: i think what the ladies failed to tell you is they employee people from a program in the city that gives people an opportunity to fix their lives. well, the two of them are giving them a chance to put their hands and their minds to work. candis: love that. lemonis: huge social impact. candis: real cool. lemonis: real cool. okay. candis: i love it. yeah. lemonis: okay. lemonis: these are some samples of things. candis: i love this. amanda: this is actually one that's new. candis: this is fun. amanda: it's very popular. candis: i love these. lemonis: what do we retail that for? amanda: $39 is what we retail it for, and it sells very well at that. lemonis: and you may be able to buy it for $10. candis: i like it. amanda: yeah. candis: i can see these flying out of here. lemonis: and so we're looking to make a reasonable margin so we can keep these young folks employed.
candis: yes. lemonis: and we're looking to make sure that you're able to make the kind of margins that you want to make but also know the story behind it. candis: i love your story. lemonis: thank you, candis, very much. candis: thank you. lemonis: we really appreciate it. so how did you think that went? amanda: i thought it went well. lemonis: julie, you got to help me here. julie: if her job is to sell product, you got to tell the whole story. the story certainly is, if nothing else, a selling point. lemonis: the story doesn't resonate. i don't know the people that made it. i don't know why the factory exists. this isn't a cork business. this is a business around a social program, and if she can't really figure out the difference between the two, then i have no idea what i'm doing here. their livelihood and the viability of the company is ultimately going to rest on your shoulders and your ability to tell that story. amanda: right. i just don't think i realized how important it is to everybody else. it's everything to me. lemonis: is it? because you don't really -- it doesn't really roll off naturally for you.
amanda: it really does mean everything to me, and it's been something that i've fought for because when you watch what happens to somebody becoming confident like that, and, you know, to me, they're like my kids. lemonis: that is really important to you, and so let that out. think about that, how strong that pitch is. "do you want to change the life of some of these young kids?" "yes, i do." "well, great. let me tell you how." julie: yep. lemonis: okay. ♪ after being gone for a couple weeks, i wanted to make a quick visit to the store in the french quarter. oh, hey, julie. julie: hey, marcus. lemonis: what's happening? and i wanted to see what has been done since i left. did they make the new tags? did they do everything that i asked for? what's the progress look like? caitlion: with all of our new equipment, now we can make bags like this. lemonis: and these are the new zippers. julie: right. caitlion: new zippers, yes. lemonis: they're the ones we got in new york, i think. caitlion: yeah. julie: yuh-huh. lemonis: wow. look at the difference.
caitlion: isn't that nice? lemonis: a lot better. caitlion: yes. julie: like butter. lemonis: that's totally different. caitlion: yeah, and the inside, frank did that bottom. lemonis: so the quality has gotten better? caitlion: oh, yeah. lemonis: it's awesome. i'm surprised that none of the products have all the new tagging on it, and then where's all the messaging about the product, the history, the tree, how it works? julie: it will happen. lemonis: it's disappointing. i want the customer and the staff to be able to understand the story of why we're making and selling these products. amanda didn't do any of it. i want to make sure we're on the same page, so while i'm here, i'm going to check in with amanda. ♪ [ horn honks ] ♪ ♪ what the...? ♪
♪ [ ringing ] amanda: it's amanda. lemonis: amanda, marcus. amanda: hey, marcus. lemonis: where are you guys? amanda: what do you mean? lemonis: i'm at the warehouse, and it looks like you guys got ransacked. amanda: [ chuckles ] we moved. lemonis: i don't remember ever talking about moving. amanda: i started looking, and i found another space, basically the same price. our lease is coming due there and so -- lemonis: when is the lease up here? amanda: august. lemonis: so it's 2 more months. amanda: yeah. lemonis: can you text me the address? amanda: yeah. lemonis: okay. amanda: all right. lemonis: okay. bye. amanda: bye. lemonis: i think for me more than anything else is the way she left the place. it's the lack of communication and the lack of respect for the goods. i don't like it, not one bit.
♪ what the...? jackie: right? lemonis: i didn't know you guys moved. why did you think it was a good idea to move that quick? it just, like, didn't happen with a plan. amanda: it did, though. lemonis: well, when you go back and you look at the warehouse, it doesn't look like you left with a plan. it looks like you left in the middle of the night
because there's [bleep] everywhere. amanda: i had a builder come out and bid to get the space to be air-conditioned. lemonis: right. right. amanda: it was $129,000, so i went to the landlord, and she said that she would want to raise the rent. lemonis: the landlord wanted us to put the $120,000 in, and she wanted to... amanda: and raise the rent. lemonis: ...raise the rent? uh-huh. amanda: so we started looking for other spaces. we've got a place that is the same price. lemonis: i'm not arguing with your business logic. i'm arguing with the process to get there. your argument is solid. it's just that you made that argument, in my opinion, without me. in this particular case, it is hard for me to be tough on her because the final product is good, but i want her to understand that there can be a process to do both, make good decisions and be a good communicator. can i get a quick tour? amanda: oh, yeah. lemonis: okay. hey, you got a nice break room. amanda: yeah. lemonis: it just feels -- amanda: and even up there, they all love it, you know? lemonis: how much is the rent here? amanda: $4,128. lemonis: $4,128? amanda: mm-hmm. the other one was $4,119.
lemonis: i mean, it's a better space. amanda: mm-hmm. lemonis: i'll give you credit for finding it. amanda: yeah. lemonis: and you did a nice job finding it. amanda: now everything is laid out so that they can get what they need quickly. lemonis: this is cool. amanda: that's an automated sewing machine, one of the new machines. we're going to use it for all the box xs, the zipper-tab pulls, all the little things that have to be perfect. lemonis: what does this do? amanda: scrap would run through here. it gets painted, and it goes immediately into a dryer. lemonis: amanda and the team have continued really bringing this business up to the right standard. they've laid out the equipment in a way that allows for an assembly-like production process, and they've bought new equipment that will dramatically improve the quality of the goods. amanda: want to take a peek in the hardware room. lemonis: oh, my god. look at this. different widths, different colors -- it's the way it's supposed to look. you guys are kind of legit now. amanda: so this is inventory. we've been doing what you told us, manufacturing where we do a whole bunch at once. lemonis: stuff looks good. we've put an inventory system in place. all of those things combined will result in one thing --
increased capacity and the ability to take on a huge order. we have a meeting set up with wine enthusiast. it's a huge account opportunity. everybody has an opportunity to grow their career and make more money, so we want to have some samples ready and some products ready. make sure everything looks flawless, visual presentation so they understand the story behind the company. what is the company? what is it? how do you say it? what do we do? why do we do it? amanda: okay. lemonis: okay. astra: got some work to do. ♪ lemonis: i set up a meeting for amanda and astra at wine enthusiast in new york. wine enthusiast specialize in selling products to people that like and live the wine lifestyle. if you're going to get a way to sell into wholesale, this is it. we're meeting with the owners and their buyers. i think the most important thing that i want to see out of you is enthusiasm for the people like i've never seen before.
the wine enthusiast catalog today gets circulated to approximately two million people. if we succeed, we could take the business from a small business in new orleans to a legitimate business in the united states. amanda: so, my name is amanda dailey, and my nickname is the queen of cork. sybil: [ laughs ] amanda: and we basically make and sell any usable product that we can using cork fabric. we do that by training and empowering some very talented but underserved new orleans youth that -- sybil: fantastic. amanda: yes. there's a whole big problem in new orleans with the youth not having opportunity, and so i just feel like there's so much more that can be done. watching their transformation, you know, people who were dishwashers and didn't have a chance, they've got a trade that they're very proud of, and to see who they've become over the last few years is just -- it's something i hope everybody can experience because it works. it really does. so this is a lot of our most popular products.
astra: our customer is very interested in authenticity and sustainability. there's not a cork shortage. the cork tree can be harvested every three years. sybil: well, this is very interesting that you presented this because travel with wine, bottles specifically, has been a huge trend for us. nancy: but there's some product development involved there because in order to hold your wine bottles, you need protective inserts in which, you know, the customer can divide their wine. they're not just going to throw this in here. how can we tie the marketing of it back to our customer? lemonis: anytime you go into a pitch meeting, you expect the seller to be prepared for any objection that the potential buyer may have. glenn: have a lot of success with used corks. how do we sell this to the wine enthusiast customer just that, okay, it happens to be the same material? lemonis: this is that moment, and my biggest fear is can amanda actually handle it? sybil: we would only carry -- if we were to carry anything, we would only carry one or two products.
cameron: are these margins sustainable? because that's, like, the worst-case scenario is, you come back to us and say, "actually, you know, we didn't have the infrastructure in place," so do you really feel like you can maintain this with the production you have now? amanda: definitely. it comes down to the equipment that marcus invested in, and so that's where we are right now. lemonis: i'm really impressed. every time wine enthusiast is throwing an objection at amanda about customization, about volume, about delivery, they had an answer for everything. sybil: so if we were to revise this bag to accommodate three bottles, which is the magic number for us, i would forecast that we would sell about 1,500 pieces in 8 weeks. how much notice do you need? amanda: for that kind of volume, the lead time is four weeks. ideally, we're the only one selling that product. glenn: exclusivity? sybil: exactly. amanda: yes. sybil: that's key for us. amanda: our goal is to obviously educate the world and sell as many cork products as we can.
sybil: this has been one of the most interesting stories i've ever heard. it's fantastic. your passion -- it's so exciting for us because that's not very common these days. amanda: sounds like all the things that you guys want. sybil: i think we can certainly do something together. lemonis: after getting that reaction from the buyer, i don't want to say that i got goose bumps all over, but i did. i thought you did a significantly better job than the first time we ever talked to somebody. amanda: for the most part, you know, i feel like they got the gist of who we are and that we're passionate and that we, you know, have a little more than just a product. lemonis: i thought you did amazing. astra: thanks. lemonis: i feel like it's a completely different business today from a mind-set standpoint. astra: all of the changes are exciting, positive, and they're really going to propel the business into the future. lemonis: good job to both of you. amanda: yeah. lemonis: good energy, good excitement. you want to call the team and let them know how it went? actually, you should call julie.
amanda: she's in a trial. lemonis: oh, she is? you think she's going to be happy about this? amanda: yeah, for both of us. this is fantastic. lemonis: while i'm happy that the meeting with wine enthusiast went great, i'm glad that amanda has done a much better job of communicating with julie not only as a partner in life but as a partner in business, but what i'm really happy about is how the youth empowerment program has really grown inside the company. we've hired more kids, and they're working on creating new messaging, new tagging, new point-of-purchase material. we're giving these folks the chance to tell their story. do i think amanda has made great strides? yes. do i think i'm still going to have to push her and get her to be focused? you bet, but i do feel like she now understands what's really important in this business, and if she does that, she'll make a very good profit. lemonis: good job to both of you. ♪
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