tv The Profit CNBC November 29, 2018 11:00pm-12:00am EST
amber: he's not a bad kid. no. he's not. lemonis: i thought he was just way out of his league. i thought he was trying to live in his father's footsteps, and there was no chance of that happening, none. ♪lways wear your gl? aristotle: i do. always wearing the product. lemonis: ... an entrepreneur has bet it all building his brand of high-end sunglasses, but while the business keeps gaining customers ... woman: your glasses are awesome. aristotle: thank you. i appreciate that. lemonis: ... it also keeps losing money. how much did you lose in 2014? lamar: one fifty-one. lemonis: okay, '15? ian: one thirty-seven. lemonis: '16? jeremy: one forty-nine. lemonis: their ceo, aristotle, has trouble moving beyond a personal tragedy ... aristotle: my mother. lemonis: you don't know if she's alive or not? ... and it's now affected every aspect of the business, from his branding ... aristotle: we set out to create a sunglass company that embraces a natural act of loss. man: but we're trying to sell something. we're not trying to have that be the main theme.
lemonis: ... to his employees ... you're so worried that somebody is going to get pissed off. you have this fear that if you push people, that we're going to walk out. ... leaving the company with no structure ... man: i'm the brand director for ellison. man: my role is corporate branding. lemonis: ... or vision. i've had a lot of patience listening to a lot of words. i still don't know what the vision is. just tell me what it is. if i can't get this owner to open up his eyes and look beyond what he's lost ... aristotle: you say tomato. i say tomato. i think it's ... lemonis: no, no, no. i say, "profit." you say, "i don't make any money." ... his company may be next. 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."
last year, aristotle started selling his branded glasses in my new store, marcus, a 20-store chain specializing in women's clothes and accessories. and what sort of feedback are you getting on your product? woman: he does get good feedback as far as the style. people like the brand. lemonis: they're nice. his brand is selling well, so i'm excited to meet him and learn more about the product and the company. how are you? aristotle: good. aristotle. lemonis: aristotle. i'm marcus. nice to meet you. aristotle: nice to meet you as well. lemonis: were you going on a trip? aristotle: no. this is my mobile office. if anybody needs shades, we do it on the spot. lemonis: very cool. i thought it was odd that when he came into the store that he kept his glasses on through the conversation. he was almost too cool for school. [lyrics] i wear my sunglasses at night so i can meet a new investor and not look him in the eye so do you always wear your glasses?
aristotle: i do, always wearing the product, absolutely. jenny: hi. i'm jenny, so nice to meet you. aristotle: aristotle. jenny: your glasses are awesome. aristotle: thank you. i appreciate that. lemonis: so i wanted to maybe take a look at where your product is over here ... aristotle: absolutely. yeah. yeah. lemonis: ... and sort of go through it. aristotle: so ellison is derived from the greek word helios, which means sun. lemonis: are you greek? aristotle: i'm 100 percent, yeah. lemonis: which means your family is really quiet and calm. they have no energy. aristotle: exactly. so all of our products are made from italian mazzucchelli 1849. lemonis: wait. slow down. aristotle: okay. lemonis: all the products are made from what? aristotle: italian mazzucchelli 1849. lemonis: i don't know what that is. aristotle: it's one of the best handmade acetates in the world. lemonis: what is acetate? aristotle: it's a plant-based plastic. lemonis: okay. aristotle: it's all recyclable. lemonis: and why did you choose that plastic? what makes it unique? is it more durable? is it lighter? aristotle: yeah. it kind of accomplishes both. lemonis: and the less expensive ones ... aristotle: do injected plastic. those won't really have the longevity that you're looking for in a product it can break. lemonis: i was pleasantly surprised about how they felt. they didn't feel like cheap plastic, and as you looked at them,
you see a lot of details. a lot of thought went into it. i feel much smarter right now, ready to do some business. did you design all these? aristotle: correct. the way it happened is, i went to greece for the first time, and i met my father at 18, and so when i went there for the first ... lemonis: and your father lives there? aristotle: in greece, correct. lemonis: okay. and you never lived with your dad? aristotle: never even seen a picture. lemonis: really? aristotle: getting off that plane was, as you can imagine, impactful. lemonis: wow. aristotle: so these are derived from my father. he used to be a navy seal in greece, so i found some old memorabilia, and that was an inspiration for one of our products, so i met two guys, and they owned over 2,000 of their own optical shops. i told them i wanted to export a product from greece, my home country to the american consumer. that would make sense, and i was one of their first manufacturer products. lemonis: really? you manufacture these in greece. i would have thought it would have been china or italy. aristotle: yeah. lemonis: what gives greece the advantage on manufacturing? is there something unique about the process? aristotle: so greece doesn't have it. that's why i learned how to manufacture, to actually start that.
lemonis: i think there's definitely the same risk manufacturing in greece as there is in manufacturing other places outside the u.s., which is it could slow lead times down, slow the design process down. it could have been more efficient to go to an existing manufacturer. aristotle: the benefit of greece is because we manufacture at chinese pricing. lemonis: but i'm open to it as long as the costs are in line. so take a pair of glasses like this, right? aristotle: mm-hmm. lemonis: what does this retail for? aristotle: one eighty is the highest. lemonis: and what does something like this cost to manufacture? aristotle: twenty-two point nine, including everything and shipping. lemonis: wow. aristotle: what was your name? jess: jess. aristotle: jess, aristotle. nice to meet you. jess: you too. so my goal here is to make sure that you get to try on something, and i fit over 5,000 people's faces, so i try to have my best judgment. what happens when you look at the symmetry of the face, you're able to complement it, right? if you are a more square structure, and you wear something more square, you're going to look like the terminator. lemonis: aristotle, can you do me a favor? i want you just to take, like, three breaths ... aristotle: okay. lemonis: ... and slow it down.
aristotle: okay. you got it. lemonis: talk us through price points so we understand that. aristotle: yeah. those will be about 180. jess: that's a good price point. lemonis: i mean, for me, if i feel like i look good in them, it could be 280, right? jess: mm-hmm. aristotle: then what really makes us different is we know customers lose or break their sunglasses, so as a club ellison member, with a $10 membership, you'll get your next pair of sunglasses at exclusive pricing, which is half off. lemonis: you spend $10, and you get half off? aristotle: for the ... yep. jenny: i just feel like giving a discount that large kind of takes away from the integrity of your brand. aristotle: this is more so as an insurance policy as a firm, and the reason for the price is you have to buy it full price one time. lemonis: i understand the idea of a loyalty program. i understand the idea of insurance on the product. i think you don't need to necessarily compromise the brand, nor do i think you need to undermine your retailers. the problem with the club is that ellison is almost promoting the fact that they're going to sell to the consumer for less than the consumer can buy it from a retailer,
the same retailer that bought it from ellison and is expecting to get a return on their investment. aristotle: thank you. lemonis: all right. i'll see you back at the office. aristotle: okay. lemonis: okay? aristotle: i'll see you soon. lemonis: after seeing the product live in the stores, i want to understand how this product gets designed, where its inventoried, and so i asked aristotle to meet me back at his office. hi, guys. aristotle: hey, marcus. how are you? lemonis: good to see you. aristotle: nice to see you again. lemonis: thank you. aristotle: this is going to be lamar. lamar: lamar, nice to meet you. lemonis: lamar, nice to meet you. i'm marcus. lamar: yeah, pleasure. ian: ian. lemonis: ian, nice to meet you. ian: pleasure. jeremy: jeremy. lemonis: jeremy, nice to meet you. jeremy: good to meet you. lemonis: so do you guys all work for ellison? jeremy: part-time. lamar: part-time. lemonis: what do each of you do? lamar: i'm the brand director and creative director for ellison. ian: i do operations so everything from logistics to sales fulfillment, the content and copy for all of our campaigns that we do. lemonis: the content and copy separate from the branding? ian: correct.
lemonis: and then what's your role? jeremy: my role is corporate branding, so like i like to say, the ... lemonis: so how is that different from what you do? jeremy: so i do the manufacturing side of it, so i'm the tangibles. i take his awesome ideas and his vision, and we put it to the tangibles like the packaging itself. lemonis: i'm not really sure this business needs a whole team like this. the jobs that they're performing are really project-based, and it's almost like they didn't know who was on first. one guy's in branding, and the other guy's... also in branding? how much inventory do you have? aristotle: about 100,000. lemonis: and cost? aristotle: it costs about 50,000. lemonis: can we look at the inventory that's back there? lemonis: yep. yep. absolutely. lemonis: come on, guys. aristotle: let's go look. lemonis: this is 50,000 of inventory? aristotle: well, when you look at it, this is about 500 units, so each unit is approximately about $100 full retail. lemonis: no, you told me it was 100,000 retail, 50,000 costs. aristotle: five hundred units, this would be 50,000 at full retail. then, you do 20 percent of that, so $30,000 if you want to do the actual cost.
lemonis: that's 20, 20, ... $100,000, 20 percent is $20,000. aristotle: yeah. yes. lemonis: do you not like math? aristotle: yeah, i guess right now it's back and forth, so ... lamar: i don't like math either, but guess what? i hire people to help do math for me. it's not because i don't like math. it's just because it limits my true potential because it's a construct. it's an idea. it's a framework. i know that he's fumbling, but i do have empathy. lemonis: don't worry. he'll get a hug at some point. do you have financials that we could look at? aristotle: absolutely. lemonis: all right. aristotle: okay. so this is going to be 2014. we launched in july 2014. lemonis: so 2014 total sales 36,000. aristotle: correct. lemonis: 2015 sales of 95,000, 2016, 109,000 total sales, 2017, $229,000 in sales, huge increase over '16.
lamar, how much did you lose in 2014? lamar: one fifty-one. lemonis: okay, '15? ian: one thirty-seven. lemonis: '16. jeremy: one forty-nine. lemonis: 2017's? aristotle: sixty-eight thousand. lemonis: okay. so overall, you lost more than your revenue. aristotle: correct. lemonis: i just want to make sure that you guys understand. you start a company. five hundred thousand dollars over time comes in. there's no money left of any consequence. people say, "well, where did the money go?" in each one of the years, the company lost money through payroll, through rent, through marketing, and now what's left is some glasses in an office and $30,000 in the bank. i think everybody has got to figure out what the business is really worth. it's down 500,000 in sales. it's lost more than it's actually generated in revenue. there's not much assets left. it's sunglasses in a relatively commoditized market, and so you got to really figure it out. aristotle: well, it's never been about the money.
it's about creating something important. then, money will follow, and i finally found a team that believes in that value. lemonis: mm-hmm. aristotle: and i don't want to see this thing go because, you know, me leading, that should have not been how i should have been leading, and for them to make the sacrifices to be here when everybody else has left ... lemonis: right. some other people walked out on you? aristotle: everybody. lemonis: just these guys stayed. people leave companies all the time. in fact, it happens every day, but i think i struck a nerve because a guy that crumbles this quickly has to have something going on. guys, thank you. i'll see you soon, okay? jeremy: thank you so much, marcus.
lemonis: thank you. it was great meeting you guys. ian: it's been a pleasure. thank you. lamar: take it easy. aristotle: hey, marcus. how are you? nice to see you. lemonis: hey. aristotle: nice to see you. lemonis: good to see you. well. aristotle: well, well, well. lemonis: what have you learned about yourself being in business for yourself? aristotle: you know, it's really about the team because while i've been burned in the past, i guess you could say, and it's forced me to be by myself, i've learned never be shy to open up the opportunity for other people. lemonis: you said a couple times that your trust has been violated. things have happened to you. are you referring to your personal life or your business? aristotle: that's happened in both areas: you know, loss of partners to loss of significant others or close people in my life, my mother. lemonis: she passed away? aristotle: i don't know. lemonis: you don't know if she's alive or not.
aristotle: you know, there was a falling out within my family and my siblings, and i wasn't there. i was at school, and my siblings decided to make her feel that she was unwanted. i was in contact with my mother via e-mail, and she's telling me kind of what went down, that everybody told her to basically f off, and i said, "mother, i will never leave you," and then one day the e-mails just stopped. lemonis: and you kept sending with no reply? aristotle: no reply. lemonis: and how long ago was that? aristotle: five years ago. lemonis: she has no idea that you even have this business? aristotle: no. nope. it happened after. lemonis: i'm wildly sympathetic to what aristotle has gone through, but if aristotle can't get his head right about his role in his family, his confidence, then the business is going to take on those characteristics. this issue with your family and your mother is definitely a roadblock for you because you're spending so much time trying to prove something to everybody else instead of just running your business. if he wears his emotions on his sleeve,
then the business is going to wear those same things. what's the business worth in your mind? aristotle: well, obviously, let's say truly if you look at the assets and everything, it would probably be $1 million, but if you look at the true opportunity ... lemonis: how do i look at the assets and get to a million? aristotle: well, it's not necessarily the tangible assets but everything else as a whole. given our market traction, $500,000 total, we could just say five times value of that, five times multiple. lemonis: well, okay, okay. you've lost 500,000. aristotle: yeah. lemonis: when have you actually done 500,000? aristotle: life today. lemonis: so you want me to pay you a multiple on what you've done since the inception of the company? aristotle: well, you know, traditionally, we do it five times the multiple of sales. lemonis: of earnings. i'm never going to get to a million-dollar valuation. i'm just not, but i do buy off on your product knowledge, your enthusiasm, and you have a little bit of street hustle to you. aristotle: yeah. lemonis: and i like that about you. i think the business is going to need $200,000. i'm willing to put up $200,000. i have to own 50.01 percent of the business
so i can control every single part of the business and coach you through this process. aristotle: i don't think it's enough. lemonis: okay. aristotle: my cover would be $500,000. lemonis: for 75 or 80 percent of the business? aristotle: for the same amount. lemonis: for the same amount. aristotle: for the same amount. lemonis: if your business is in trouble and you need my help, log on to theprofitcasting.com. aristotle: my cover would be $500,000. for decades banks have been getting away with it.
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lemonis: for 75 or 80 percent of the business? aristotle: for the same amount. lemonis: for the same amount. aristotle: for the same amount. lemonis: because i want this relationship to start off on the right foot, we'll split the difference, $350,000 for 50 percent, which is way more than i want to spend. aristotle: if we can have the contingency in place that allows ... like, i know that you've said it. lemonis: listen. i'm going to give you 5 seconds. aristotle: yep. lemonis: it's a yes or a no. aristotle: yes. lemonis: okay. thank you. aristotle: thank you, marcus. lemonis: i want to be clear about something. three hundred and fifty thousand dollars is going into the bank, and i'm going to control what we do with it. aristotle: yep. lemonis: we're going to develop new products. we're going to get out and figure out how we're going to sell. we're going to build the brand. we're going to build the business from scratch.
aristotle: let's do it. lemonis: okay? aristotle: yes, sir. lemonis: all right. okay. what i want to understand is, what's everybody's role? what are they contributing? when i met these guys initially, they couldn't even tell me what they did or what the other ones did, and so i felt like i needed to give them a clear path to success on what they were going to be graded on ... lamar: this is going to be so fun because quadrants are the best because now we're talking shop, and that's what i love to talk about, marcus. ian: you like to talk? lemonis: ... and the only way you can do that is to have defined roles with defined responsibilities with defined accountability. who is driving the division of the company right now? aristotle: i would say myself. lemonis: so the lack of clarity is because you're driving the process? aristotle: i would say ... lemonis: or because there is no process?
aristotle: i mean, you say tomato. i say tomato. i think it's ... lemonis: no, no, no. no. i say, "profit." you say, "i don't make any money," and we all collectively need to make money, and so it's not a tomato-tomato thing. who is managing the inventory and the cash flow? who is doing the projections, the sales and the growth? aristotle: as of right now, i would do the top left. i would be the top left. lemonis: you're doing this? aristotle: i would be the top left, correct. lemonis: okay. who is handling product development, prototypes and things of that nature? jeremy: i'll take a j, top-right corner. lemonis: logistics fulfillment, customer experience. ian: that's me. lemonis: okay. all right. who is setting the strategy, the marketing and the communication? lamar: i'll take a l, but then circle an l around all of it because smart marketing encompasses all of these four quadrants. lemonis: so you're not only handling this, but you're doing all of it? lamar: well. ian: it was sufficient enough just to say, "put an l in the bottom" ... lamar: totally. ian: ... "left-hand corner." lamar: totally. but we have to give construct to things. otherwise, then people will get lost, i feel like. lemonis: or they get offended. lamar: or they get offended. lemonis: we don't want anybody to be offended, right?
we want everybody to feel like they're equally contributing ... lamar: absolutely. lemonis: ... and that everybody's role is just as important as the next person's ... lamar: totally. lemonis: ... and that's what offended him. is it me, or does lamar think that he is the only one that can solve any problem in the world? well, here is the news flash, lamar: you're not the only guy with answers. if ellison had a retail store, what would you fill the store with? do you have enough glasses to open a store? aristotle: no. lemonis: so i want you to write up a 2,000-pair order. jeremy, what i'd like to see from you: easy add-ons product extensions that are going to be logical and obvious to the consumer, and i want to see more progress from your individual quadrants, okay? aristotle: okay. lemonis: awesome. aristotle: thank you, sir. lemonis: so i'm taking these guys to north bridge mall, and i want to take them to an empty space, and i want to challenge them a little and see what kind of ideas they have. ultimately, the reason i brought you guys here is we can come into a space.
you guys can put all your web pictures on one wall, your branding, and then you're going to show me what you would do with this space if this was a store. i asked them to print up images from their website because i wanted to understand in one clear picture what their branding looked like, and let's see what the cohesiveness is and what the theme is. aristotle: all right. let's use this just because it's ... lamar: yeah, [indistinct]. aristotle: yeah. while we do this, if you want to start conceptualizing. lamar: yeah. lemonis: i think he already began. is this the about ellison section on the website? aristotle: yeah. yeah. lemonis: so can you read this to me? aristotle: "we set out to create a sunglass company that embraces a natural act of loss. when we lose something as people, we often find something special in the process. fear of losing your shades should never limit that process. at ellison, we want to remove silly but very real anxieties about losing glasses while encouraging people to get lost in order to find something great." lemonis: the only time that i've ever heard a company market by using the word loss more often is an insurance company
where you're buying insurance to protect from loss. where else would you be excited about losing something? every time the word loss or losing is on that sheet, i want you to highlight it in green, any variation of the word. it sounds like a commercial for a funeral home, like "i know you've lost your loved one, but we have some amazing glasses to sell you." what is the vibe that you get from that? aristotle: the emphasis on loss. ian: loss is associated with a negative emotion. lamar: why can't it be empathetic? because aristotle has had some pain in his life, and that pain has been real, like, people abandoning him. ian: but if we're trying to sell something, we're not trying to have that be the main theme. aristotle: and that was definitely a risk. when i'm going into it, i wanted to do something different, i think all of us, and really taking something that people don't talk about, myself included. lemonis: i don't mind that you wear it on your heart, but i mind that you wear it on the sleeve of the business because that scares me.
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on their sleeves, and it takes the business in a direction that could confuse people or even depress them. the four of us have to figure out how to get you to see things differently because the loss that you have in your personal life is real, and i'm empathetic, but my fear is that taking on a space that you're going to build out in decor, i'm scared that it's going to have this feeling. now, i understand that personally he's hurting, and i want to help him through that, but i can't let that leak over into the business. so you're going to be responsible to find all the products? aristotle: yeah. lemonis: okay. you're going to do the execution of the space. jeremy: yes. lemonis: and you have the logistics of getting the inventory here and managing it and putting the system in place? ian: correct. lemonis: okay.
lamar: i'm going to pretend to be a 25-year-old girl and walk and understand what do i want to see here, and then once i do a good job at that, i should be able to be able to give jeremy some ideas and little details. lemonis: so you're going to handle the creative side? lamar: i'm going to handle the creative side. lemonis: we're going to come back here in 45 days, and the store is going to be either open or it's not. okay? what's happening? aristotle: what's up, marcus? ian: hey, marcus. aristotle: how are you? lemonis: everything good? ian: everything is good. aristotle: yeah. it's great. lemonis: what's all this? ian: we have some cool brand extensions for that store we discussed. lemonis: right. i tasked these guys with coming up with products that would have some connection to glasses. i mean, i was hoping for a ton of ideas. ian: so our extension from the sunglasses would be tie bars, cuff links, a wallet, business-card holders and some pens.
lemonis: zero. i wouldn't do any of it because i don't understand the extension, and i don't think you guys understand your customer just yet. what does a cuff link have to do with a pair of sunglasses? ian: so our tie-in is the fact that sunglasses are an accessory. lemonis: so tell me who your customer is today. aristotle: i would say young millennials between 18 and 35. lemonis: what percentage of your buyers are women? aristotle: the majority, 60 percent. lemonis: okay. well, they don't buy cuff links. aristotle: right. lemonis: so what are you holding? aristotle: i'm holding a pen ... lemonis: uh-huh. aristotle: ... and then a business-card holder. lemonis: so millennials walk around with business-card holders? aristotle: yeah. i would believe so. i would say the ... lemonis: do you have one in your pocket? aristotle: not on me. lemonis: do you? lamar: i don't have a business-card holder. lemonis: do you have a fancy pen like that? aristotle: no. lemonis: i'm sorry. i don't even know anybody that has a business-card holder, and i dress up, and i can't even remember the last time i wore cuff links, and i'm not saying cuff links are a bad thing, but how is that a natural extension off a pair of sunglasses? what are the things that made the glasses so successful? ian: the attention to detail and the beauty in the acetates.
lemonis: what kind of things could be made with acetate? ian: bangles, inlays on a belt buckle. lemonis: this acetate piece is what would make you guys unique, so what i would like to do in the next round is create three more products. they must be made of acetate, and they must skew female. okay. thanks, guys. all: thank you. ian: all right. lemonis: hi, guys. welcome to opto. aristotle: thank you. lemonis: thinking about the new store space, i wanted to get jeremy and aristotle all of the resources that they would possibly need, so i've taken them to opto, a company that builds floor and wall fixtures for companies to display their product on. so, jeremy, i really want you to explain to jamie your vision of what you see with the space. the layout of the store is specifically jeremy's task, but to be honest, he didn't do so well on the last task, and ultimately, it's aristotle's responsibility to manage the entire process, and so i'm having him here today
so that he understands he needs to hold his team accountable. jeremy, really, i want you to design the space, how you're going to lay it out. what are the materials you're going to use? i know you've thought about it a little. jeremy: uh, not too much. lemonis: you haven't thought about how you're going to lay it out? jeremy: no. no. and lamar knows the creative vision. lemonis: we talked about him working on some branding actually. we did not talk about him building out the store. aristotle: well, there's the component to the vision and the branding that plays into the store. jeremy: we know elements that we want to create and the feelings that we want to evoke of the excitement, so we catch ... lemonis: right, but we got 45 days to have feelings turned into open. they knew that there was a very tight time frame, and they're looking at me like, "we just thought you were going to do it all." so the way you have to think about space planning is understand how the traffic is going to flow, and then you'll create a fixture plan that actually navigates them through. what's that going to look like? jeremy: nontraditional style of a checkout, some sort of area into this connection. lemonis: so hold on. is this where the register is? jeremy: in this area, yes.
lemonis: so you would be looking at somebody's back? jeremy: so then, i guess not there. lemonis: what is it that you want the customer to see first? jeremy: in terms ... i mean, what do i want them to see first? i mean, i want them to see, like, the vivid of the acetates, the bright, the fun. well, there has to definitely be a flow in the process, which would come down to, in my mind, just part of the psychology on it would be what are the items? lemonis: jeremy. jeremy: i ... but it's part of it. lemonis: but you're giving me all these words. they walk in. jeremy: i got to talk with my words. what am i supposed to say then? lemonis: just answer the question. i wish for once i can ask a very simple question and just get a straight answer. what is the first thing you want the customer to see? jeremy: openness, being able to touch and feel, still having a warm inviting element of ... seating, have something that could entertain you. maybe it's a bar. maybe we have a display that converts into a bar so we can have a fun sort of pop-up event at our own pop-up per se. lemonis: just, like, the theme around here is always just talking and talking about nothing. there's a 900-square-foot box ... aristotle: yep. lemonis: ... that needs to be built out to sell glasses. aristotle: mm-hmm. lemonis: that's all. aristotle: yep. lemonis: no running through fields
with daisies and unicorns. what is going to happen with this space? because if you guys would rather have opto build out the space ... jeremy: opto doesn't know our ethos and vision. lemonis: you don't know your ethos. aristotle: you know, marcus, that the vision, you know, as we built this, you know ... lemonis: i still don't know the vision. aristotle: well, let me finish my sentence. lemonis: i still don't know what the vision is, so don't keep talking without answering the question. i've had a lot of patience listening to a lot of words. what is the vision? just tell me what it is. coming up ... aristotle: so the product is going to come out to 28.28 just for the frame. lemonis: you know that you told me 22.9. aristotle: yep. i did not tell you the right numbers. lemonis: just think about how ridiculous this is. i've had a lot of patience listening to a lot of words. (john foley) i was there in chicago when bob barnett made the first commercial
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world's best inflight entertainment. what is the vision? just tell me what it is. jeremy: we thought that we've lived the brand. lemonis: what is it? aristotle: the ethos is the dedication to the journey and the vision and to follow one's path, whatever that may be. lemonis: was there any effort at all put into this, or is this store going to be a giant waste of time? you are responsible to get this store open. aristotle: yeah. lemonis: ultimately, what i'm looking for is to invest in people who have a conviction, and you, you just shake your head, and you go with the flow because you're so worried
that if you push people that somebody is going to walk out. aristotle: there's a time and place when you need to push, and, yes, is there a lot more times where i could push harder, yes, there is. there are reservations i have, personal reservations, emotional reservations i have about pushing too hard. lemonis: what is an example of that? aristotle: you know, lost relationships, that comes through maybe in a negative way. lemonis: when you decide to be in business, you understand that rejection is part of the territory. aristotle: absolutely. lemonis: what i don't want to hear ever again from this day forward is that you don't want to push because you have this fear of losing something or someone, so today is the new beginning for you, okay? aristotle: i can agree to that. lemonis: i wanted to give the guys a local source for acetate so they can use that and develop new products for the store, all sorts of accessories, so i'm taking them to state optical, one of the largest glasses manufacturers in the area. that is cool. man: we're on par with any european manufacturer as far as cost.
lemonis: also, if we're going to open up a store a month from now, we need to put our best foot forward, so i'm meeting with aristotle to go over what the replenishment inventory is going to look like. aristotle: we're going to get them in additional colors because we're going to have the mold set up. lemonis: a wall of options. i think this business can sell 8,000 or 9,000 pairs of glasses a year, and i want to make sure that we have them in inventory, in production and in transit at all times. now that we have the order finalized, i sent aristotle to greece. i want him to put his eyes on the manufacturing process, and i want to see him come back with some new designs. hey, guys. aristotle: hey, marcus. how are you? it's nice to see you. lemonis: how you doing, buddy? ian: marcus. how are you? lemonis: what's happening? i been good. i'm heading over to aristotle's office to see what work he did while he was in greece. i want to see the new designs. i want to see new colors, and i want to see if he's getting really focused on the details.
so what is all this? aristotle: so when moms are purchasing our product, they're always asking if you have anything for kids, so i took this opportunity to explore what that possibility could look like. lemonis: i love the fact that you took the initiative to come up with other ideas, and i like the fact that you were clever enough to come up with some colors because kids don't want to wear glasses that are just plain. aristotle: yep. lemonis: it's fun. they seem flexible. they seem durable. i know that aristotle and i had never talked about kids' glasses, but i have to give him credit for going outside of the box and thinking on his own without worrying about the risk of failure. that's showing a lot of personal development for him. are these new ones? aristotle: yeah. absolutely. those are adult. went through this process. lemonis: this is gorgeous, man. look at the two-tone nature there. these are really nice. is that what you have on? aristotle: yeah, that's what i have on. lemonis: you designed this? aristotle: i designed that. lemonis: this is a cool design. this is gorgeous. aristotle: yep. lemonis: it looks like wood. wow, this is real cool. aristotle: i actually like the aesthetic look of wood,
but i don't like the functionality of it ... lemonis: yeah. aristotle: ... and the durability of it. lemonis: aristotle, i'm just going to tell you, this one is spectacular. this one is great. this color is fun. this one is really great with the layers of acetate. really great job. what i really like about what aristotle did with this order is he put more technical thought into it with fit and color and comfort, and he started working on designs for next season as well. aristotle: so these are going to be the new collection. lemonis: that's excellent. i love the design work. i love the color palette. this feels like you took the company to the next level, and so do you have your costs? aristotle: yep. so i broke that down right here, so the product itself is going to come out to 28.28 in dollars just for the frame. lemonis: that's more than you told me when i first met you. aristotle: well, i was telling you euro, which i should have been telling you in ... lemonis: what the heck do you want me to do with euro? aristotle: twenty ... lemonis: you know that you told me 22.9.
aristotle: yeah, so i didn't include the packaging. i didn't include shipping. no, i take responsibility. i did not tell you the right numbers, and i apologize. lemonis: just think about how ridiculous this is. coming up ... the assignment was to come back with things with acetate. jeremy: we never locked firm on that. it takes 2 weeks to get it. lemonis: what do you mean you never locked firm on it? jeremy: if you think a brand is going to recreate itself in 30 days, where's the realism in that? it would do more than haul. if i built a van, it would carry my entire business.
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no, i take responsibility. i did not tell you the right numbers, and i apologize. lemonis: just think about how ridiculous this is. i'm going to write it down, and you're going to walk me through this. can you get your calculator out, please? ian: sure. lemonis: cost of the glasses. aristotle: okay, 28.28. lemonis: what about your cost to travel over there? aristotle: six thousand dollars. lemonis: how many pairs of glasses will you make? aristotle: we'll do about 3,000. lemonis: so now i have to add $2 to the cost. aristotle: to each part. yes, sir. lemonis: okay, next. aristotle: white paper boxes, $2.71. then, we have the vegan leather pouches, $0.97. trifold inserts, $0.57. lemonis: okay. aristotle: microfiber cloths, $0.54. lemonis: okay. how much would the hard case be? aristotle: three dollars. lemonis: what else are you missing? aristotle: so these are actually considered medical supplies, so we have to get a certificate after the approval which is $6,000. lemonis: a year? aristotle: a year. lemonis: what's that total? ian: forty dollars and seven cents. lemonis: per pair.
that's, like, almost double what you said, so the margin that i thought was there doesn't really exist. these numbers just have to be driven down. this is a big mistake by aristotle, a huge one, and it really makes me wonder whether he could actually manage this business as it gets bigger. the cost has to be no more than $30 including everything. you definitely threw me off here. good job, though. aristotle: thanks, marcus. lemonis: good job. ian: thank you. lemonis: things are moving forward at ellison. jeremy is getting ready to present the new product lines i asked him to develop. meanwhile, ian and aristotle have put a new inventory management system in place. it allows us to know what inventory we have, where it's located, what we need to reorder, and it follows a replenishment model.
hey, guys. aristotle: marcus. lemonis: how are you all? lamar: marcus. lemonis: how you doing? lamar: good to see you. lemonis: i'm getting ready to sign the lease for the new store, and i'm excited to see all the new product extensions and the marketing plan that's going to support it. jeremy: let's look at some of the products. lemonis: this is everything? aristotle: this is everything. jeremy: we'll have a really cool concept of a valet tray, like, you know, when you come home, and you take everything off? we wanted to find something that can collect all of their items together, all of their ellison pieces. lemonis: it has to have acetate ... aristotle: right. lemonis: ... to make it interesting. jeremy: and this is a metal sunglass strap. aristotle: an alternative crokie. lemonis: it's like a leash for my glasses. aristotle: correct. it's protects your glasses. lemonis: it protects your glasses, or it protects you from misplacing them? aristotle: misplacing them, yes. the loss of glasses is a huge problem. lemonis: oh, my god. did he just say ... oh, my goodness. did you actually just say that? and is there acetate on here? aristotle: no acetate. lemonis: that was our whole thing. find things made of acetate. jeremy: all of these little finishing of the embellishments here
can be transitioned to taking acetate and making those the emblems on there. my bigger concern was the metals , clasps, things like that. lemonis: that looks [bleep] ridiculous. aristotle: what? you think so? lemonis: and the task was, find products that are made out of acetate. aristotle: yep. fair enough. jeremy: these pieces that sit here, with your direction, can be modified to become more on-brand, but the driving, deciding factor on all of this was timeline. lemonis: i don't know what i'm doing to improperly communicate to jeremy, but we're standing here a month later, and i got to be honest. i think the presentation is even worse. if i had done what i normally do, which is find the space, build it out, spend the money and surprise you guys with it, i would be totally screwed right now. jeremy: these pieces were ones that we knew could be brought to the store in the 30 days. if you think a brand is going to recreate itself in 30 days with items it doesn't have before on a long-term goal, where's the realism in that?
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jeremy: where? lemonis: the assignment was to come back with things with acetate. there's no acetate on these. the assignment was to come back with things with acetate. there's no acetate on this. jeremy: we never locked firm on that, and if there were the case, it takes 2 weeks to get it. lemonis: what do you mean you never locked firm on it? of course we locked firm on it. this is really directed at you as opposed to the other guys. aristotle: yeah. lemonis: i didn't expect it to be, like, the finished product, like, "ta-da." all i wanted you guys to do is come up with products that had it, and if i had the confidence, i'd be like, "okay," but that didn't even happen. does jeremy drive me absolutely crazy? yes. but ultimately, this is aristotle's responsibility. he was able to go to greece and get a bunch of stuff done, but the fact that he left these details slip through the cracks shows me that he's incapable of managing people, so how can i be comfortable with him managing a store? and so i think at the end of the day, like, i don't think it's appropriate for the company at this point to open a store because i don't know how we would generate the revenue. disagree? aristotle: no.
i mean, you know, to guide and to lead this was very difficult, right? lemonis: no, no, no. do you disagree with the business logic behind that? aristotle: i ... lemonis: would you open this store tomorrow? aristotle: no, no. lemonis: i'm really conflicted in this moment because while i'm frustrated with some of the things that he does, i'm also fascinated by his hidden talent, and i see glimpses of it, and i know that the potential inside of him is phenomenal. i mean, honestly, that is a [bleep] disaster. i'm not sure that these guys are are adding value. what did they really bring to the table besides he found some jewelry online, and he brought it to our meeting, and he bought a box? aristotle: what everybody brings to the table is loyalty, and they're ... lemonis: wait. aristotle: yeah, yeah, i understand. lemonis: listen, hold on. from a business standpoint, what was brought to the table, realistically? it's not a personal thing. aristotle: okay. okay. lemonis: from a business standpoint ... aristotle: it's nothing. lemonis: but i'm not advocating that you're not friends with them. aristotle: oh, absolutely, and that's ...
lemonis: i think you need to know that what happened here is a failure. aristotle: right. lemonis: that doesn't mean that i'm walking out the door, and you need to know that you don't have to keep people around that can't help the business move forward because you feel like you're going to be alone. aristotle: i understand that. i think there's ... lemonis: well, you're the leader ... aristotle: yeah, absolutely. lemonis: ... and so you're going to have to make the corrections ... aristotle: absolutely. lemonis: ... that preserve the friendship ... aristotle: absolutely. lemonis: ... and move the business forward. in the next couple weeks, we need to relaunch the brand. let's plan in 2 weeks, we're going to do a full product launch, and maybe we show up with some other product extensions. okay? aristotle: fair enough. thanks. lemonis: thank you. hey, hey. aristotle: what's up, marcus? how are you? lemonis: today is the day that aristotle is set to present me with all of the new ellison products. with the opening of my new store, marcus, in the meatpacking district in new york city, i wanted ellison to be able to also launch their new products at the same time.
well, this is new, this light and bright. aristotle: yeah. we're going to have about 10 different color variants just in the men's purple, blue, yellow, and what we wanted to do is we wanted to bring down the cost, so the way we've done that is we changed the packaging so it travels flat, and then we assemble it upon pickup. we're actually going to be able to bring it down another probably 30 to 40 percent. lemonis: everything you got actually has more personality. so what is this? that's kind of nice. aristotle: definitely. lemonis: at least i'm not talking about getting lost. aristotle: yeah, exactly, and so when you lose something, which one not the premise of this, what happens after you find a new beginning? lemonis: have you found a new beginning? aristotle: one hundred percent. you said, "i'm not going to leave you," and that investment in confidence is what pushed me to where we are today, and i appreciate that. aristotle: this is going to be our earrings. lemonis: okay. it seems like you skewed female like i asked you to. aristotle: yes, absolutely. this is going to be a beaded bracelet. lemonis: it definitely took him a while to get to this point, but aristotle on his own came up with a number of product extensions that quite frankly i'm even surprised by.
aristotle: this is, like, a gift box, so you could actually serve this as a sunglass and a ... lemonis: jewelry box. aristotle: ... jewelry case, correct. lemonis: i really like it. the prototypes that aristotle has developed that will now get put into production show me that he really understands his business better. it's geared towards women. it's made with acetate, and there's a process in place to bring new products to the market. this really all got done when you did it yourself. i'm proud of you, buddy. aristotle: thank you. yeah, i sold these out of the trunk of my car, got it to a point where i got some good attention from some high-level people, and now you guys are a part of that. lemonis: happy milestone. everything good? aristotle: it's awesome. lemonis: there's some customers that want to talk to you. can you do a fitting real quick? aristotle: oh, my god. lemonis: the measurement of success isn't always big store openings or huge products launches.
in this particular case, the measurement of a win is really in seeing aristotle's progress. for now, we're going to take baby steps, and if i could get a decent return on my investment, and he can make a solid living, i would consider that a pretty good lemonis: tois this my tiny home?... a colorado manufacturer of tiny homes has dreams of building an empire. the quality of workmanship is unbelievable. but the owner's finding out that the big business of little living is more than he bargained for. i want to help you be a better c.e.o.. 'cause right now, you're a nice man and a terrible c.e.o. he's put the business in over a million dollars of debt. do the people that work here know how bad it is? steve: the top managers do. the rest don't. bernadette: it puts a lot of pressure. lemonis: his lack of leadership has killed morale. steve: i avoid conflict and i have not done a good job at holding people accountable. lemonis: if i can't get him to change his mind-set...