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tv   The Profit  CNBC  July 13, 2019 12:00am-1:01am EDT

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it's time to run a business. cory: wahoo! lemonis: okay? lisa: thank you. thanks. ♪ we got an office ♪ we got an office, we got an office ♪ cory: oh. mom, look. headphones. ♪ a new york fashion designer was once a phenomenal success... what's the biggest year that you've had? susana: 13 million. lemonis: ...but today, she finds herself under siege. susana: there's no respect here for me at all. there's no respect. where's the respect? lemonis: customers are deserting her label. anna: honestly, we didn't make any money since 2009. lemonis: friends and family are demanding a piece of her business. susana: the brothers think i owe them their birth right. lemonis: i feel like you're being kind of, like, shaken down. and instead of standing up for herself and fighting for her brand, she's letting it fall apart at the seams. susana: this is bull[bleep] it's total bull[bleep] lemonis: if i can't help her regain confidence and harness her incredible talent...
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susana: it's really stressful to... lemonis: ...susana monaco's best days will be behind her. 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's going to change. everything. but i do it to save jobs, and i do it to make money. this... let's go to work. "the profit." in 1996, susana monaco launched her namesake label, a collection of women's apparel marked by clean and contemporary designs. susana: the front is narrower than the back. lemonis: she had grown up working at her family's cut-and-sew factory and then engaged them to help her with manufacturing. before long, she was in thousands of retailers across the country with revenue exceeding $10 million.
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anna: this is the best-selling for holiday. they love it. lemonis: but the great recession dealt the label a severe blow, and susana has been unable to reverse the damage. susana: stay in business or not stay in business -- that's the choice. lemonis: today, sales are off more than 50% from their peak. susana: this is devastating. lemonis: and the company is bleeding money. i'm looking to grow my fashion business, and despite susana's troubles, i'm impressed by the success she's had in the past. if i can help get the brand back on track, i'm confident she can have an even brighter future. anna: hi. lemonis: hi. anna: how are you? lemonis: how are you? i'm marcus. anna: anna. lemonis: nice to meet you, anna. anna: nice to meet you. lemonis: is this the showroom? anna: yes, please come in. lemonis: okay. anna: marcus, this is susana. lemonis: oh, hi, susana. susana: hi. lemonis: marcus. susana: hi, marcus. nice to meet you. lemonis: how are you? nice to meet you. susana: yeah. lemonis: don't be nervous. you guys manufacture your own stuff? anna: yes. susana: yes. anna: we manufacture in our new jersey factory. sue is responsible for design,
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and i'm responsible for all operations and sales. lemonis: so you handle production and sales? anna: yes. i'm very capable. lemonis: that's interesting. susana: the front stuff is too emotional for me. anna: sue is the creative engine of the company. susana: yeah. anna: so we don't want to expose her to all the -- you know, all the unpleasant stuff. susana: i don't like to be in the front of things. lemonis: okay. susana: i like to be in my world working. lemonis: you're the artist. susana: yes. i just... anna: she's very -- takes everything very close to heart. and, you know, in operations, every day there is a problem. there is -- i mean, every second there is a problem. not every day -- every five minutes. lemonis: right away i noticed this very interesting dynamic between the two of them. anna's the employee, but she's dominating the conversation, and susana, who's the owner who has her name on the door, she's standing there like a bystander. why don't we look at the product? susana: okay. lemonis: let's do that. what's the demo? susana: i would say that it's a cross section. there's the young girl in there. there's a middle girl. there's a working girl. there's a lot of girls in there. lemonis: is that code for saying it's all over the place?
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susana: um, maybe. lemonis: look, you would expect a company like this to have a core lineup, a clear direction on exactly what they were selling, and there would be some consistency to it. who's your customer for this? anna: well this is a young doll. susana: 20s, 30s. anna: 20s, not even 30s. lemonis: but when you look at her lineup here, it's all over the place. there's a dress made of this material and pants made of that material, and there's no story to the lineup, no collection. i'll tell you what's interesting about this rack. this is a very easy crossover to somebody who likes to live in athleisure wear. susana: yes. anna: yes. this is supplex, which is our base fabric. lemonis: okay. that's how susana started the company. lemonis: it has a spandex feel to it. so it helps people with shape and curves. susana: shape is great. lemonis: but that's a very different fabric than this. 'cause this is not supplex. what's the problem? susana: it's a little dry. the economy crashed, our price point changed, so we had to work accordingly. anna: supplex fabric is unaffordable. susana: the supplex is almost $10 a yard.
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that's the kicker. lemonis: so this fabric is how much a yard? both: about $4. lemonis: what are the overall margins? susana: the overall margin of the company is... you know, not great. it's in the 40s. lemonis: in a business like this, your margin should be no less than 50%. and what's even more surprising is they should be even higher, considering that they're using low-quality materials. what it really tells me is that there has to be terrible inefficiencies in their process that i'll have to look out for. anna: okay, so this is the pattern-making area. everything is done on the computer, all patterns. lemonis: and you're literally making to order. susana: yes. lemonis: sell an order, cut, sew it, and ship it. susana: yes. lemonis: and so, when it goes to the cut and sew shop, they work off this pattern. susana: yes. my dad's manufacturing plant. lemonis: oh, you're at your dad's building. susana: yes. lemonis: so you're paying your dad rent. susana: yes. lemonis: so i should think about the factory as a shared building... susana: yes. lemonis: ...where your employees make your clothes. susana: yes. lemonis: ...and his employees
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do third-party manufacturing for other people? susana: yes. lemonis: how often do you -- how much time do you spend there? susana: i don't spend any time there. lemonis: you don't go see what -- you don't inspect what's happening? susana: no. i used to, um, go, not... lemonis: when's the last time you were there? susana: the last time... lemonis: last week? susana: no. no. no. anna: no. lemonis: last month? susana: i would say, months. lemonis: do you go, anna? anna: i don't go. they don't like us. lemonis: your employees don't like you? anna: her brothers. lemonis: what do the brothers have to do with your dad's building? susana: they're running the factory. anna: they're running the factory. lemonis: so you have no interaction with the people that actually make your clothes? susana: yes, no contact. lemonis: so this is a business relationship, contract labor, where you're paying for all the employees and all the work that's done. that's your only source of manufacturing the products. but susana never actually goes to the factory that she pays the employees in? because she's got some problem with her family? i'm gonna spend a few minutes with susana so i can get to know her. anna: yes. mm-hmm. lemonis: why did you get into this business?
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susana: i was born in this business. lemonis: you were how? susana: my dad moved here from italy in the late '50s, early '60s. he started manufacturing clothing. i grew up in that factory. worked there through high school. i did the designs. lemonis: and he manufactured. susana: he manufactured. lemonis: and then what do you do next? susana: i worked with a few really great companies. mm, didn't really feel... i don't know, fulfilled enough, so i created the collection and it was going incredibly well. lemonis: what's the biggest year that you've had? susana: $13 million, then my father decides that i should split the stock of my company with my brothers equally. lemonis: why? susana: because he wants his family to be secure in life. this is old-school way of doing things, 'cause all of my -- lemonis: okay, hold on a second. susana: yeah. yeah. lemonis: he walks up and says, "i know you started this business by yourself, you're doing amazing, and i want you to take two-thirds of the business and i want you to give it away." susana: yes. lemonis: to your brothers? susana: yes. lemonis: who are not in the business?
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susana: they're actually working at the factory. lemonis: and so their payroll is coming from your production. susana: yes. yes. paying them a salary. lemonis: and did your brothers put any money in your company? susana: no. it's not fine, but... lemonis: so, i feel like you're being kind of, like, shaken down. anna, what's your biggest worry? anna: the problem here is that we afraid that the brothers, they're gonna screw us, you know? because we don't trust them at all because they think that they deserve stock in the company, that this is their birth right. lemonis: they deserve in stock in the factory. anna: no, in susana monaco. lemonis: why would they deserve stock here? anna: well, good question. lemonis: now, are you with partners with susana in this business? anna: no. and the thing is that it's really upsetting me, because i think it should be 50/50 because i carry a lot of stuff. lemonis: you get paid as well or no? anna: yes. lemonis: you do get paid. anna: yes. lemonis: similar to what susana makes? anna: no, i'm paid more. her salary is $100,000.
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my salary is $175,000. i feel why should i cut my salary when i'm doing all the work, and i don't have partnership papers? and i said that to her straight out. i said, "it's one thing if i have 50/50." but now, i -- i mean, technically, i'm an employee. lemonis: so anna either gets twice as much as susana makes or she gets half the company? it feels like susana is being run into the ground all over the place. her family wants a piece of the business. her employees want a piece of the business. it's ridiculous. what's your biggest concern about the business? anna: well, biggest concern is, of course, we're not making money. i mean, honestly we didn't make any money since 2009, so... lemonis: no money. anna: yes. there's no cash flow in the company. so what happens is we ship in the world, we ship in the world, there is no cash, so this is super stressful. lemonis: so, you know, when i met with anna individually, she told me she thought she should own 50% of the company. susana: yes. she's making a lot of decisions here.
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i'm not, you know, the pit bull. she's the pit bull. i need a pit bull. lemonis: yeah, but your pit bull isn't supposed to bite you. susana: no. lemonis: they're supposed to protect you. susana: yeah, but -- lemonis: the purpose of a person like that is to protect you and... susana: yes, but she does in every other sense. it's not about bullying, it's about... lemonis: but i feel like you're giving me a rationalization... susana: i'm not rationalizing, it's the reason. lemonis: ...of why you let her behave that way, though. even when we're talking, she always talks over you. she's not gonna take a cut in pay and she wants 50% of the business. it's like, "okay, okay, hey, just slow the [bleep] down." susana: i just -- i don't know how i feel about that. it's a very, very mixed-feeling thing. lemonis: what i want to do is i'd like to have you bring your financials with you and i want to go to the factory. holy cow. this place is huge. all these people work for you? this is gigantic. susana: yeah. mario: susana. susana: hi, pop. mario: please, go punch the timecard.
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susana: this is my father, mario. lemonis: mario, how are you, sir? i'm marcus. you have a wonderful daughter. a lot of -- how many people work here? mario: maybe 85, 90. lemonis: wow. can i have a tour? mario: okay. lemonis: all right, let's go. let's take a tour. how many pieces a year come out of here? susana: with us, it's about 75,000. lemonis: holy [bleep] susana: yep. lemonis: what is all this? susana: this is just old inventory. lemonis: so does all this inventory sit on your books? mario: look how much stuff she's got around here. susana: yeah, but it's -- it's not a lot. lemonis: i'm sorry? susana: well... lemonis: i already knew from the showroom that their collection was all over the place. but this, there is product everywhere, rejected by customers. were you drunk or something when you did this? this is what happens when you don't have a clear focus on your core product.
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mario: in each department, we have a foreman. in the cutting department, we have a foreman. lemonis: where are your boys at? they off today? mario: uh, no, they're budging around. i don't know. they're very -- very busy. lemonis: i'd like to meet them. can you take me to them? mario: uh, you know what? susana: i already know what's going on here. the brothers think i owe them their birth right. lemonis: so neither of them will talk to me. susana: no. mario: supposed to be equal partnership. lemonis: and so, the only way that they would agree to meet me is if susana gave away two-thirds of the company? mario: well, originally, it's what you're supposed to do. lemonis: whose business is it? who's selling? who's designing? the boys are designing? mario: well, it's not the point. susana: they think that i owe them more than i owe them. they -- there's no respect here for me at all. there's no respect. where's the respect? and what did i do? i created a business, made a lot of jobs, and now everybody hates me. i'm never gonna be in business with them again. and i'm not gonna have them as my brothers, because this is bull[bleep]
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it's [bleep] total bull[bleep] excuse me. lemonis: you got to get those boys down here. go ask them one time. mario: i already asked them. lemonis: one time. one time. for me. just -- you know, i won't go up there. you go ask them one more time. there's a very simple reason that i'm asking mario to bring his sons down. if i'm gonna be in business here and i'm gonna have all the products made here, it's not unreasonable that i want to meet them. mario: mario left. dominic, he said, "no." he don't want to come down. lemonis: mario left? mario: yeah. lemonis: okay. and dominic said "no." mario: no. lemonis: wow. look, it's clear to me that the situation here is not ideal. the dynamics are really off. and if i'm gonna move forward with susana, i'm gonna have to put a lot more thought into it. but before any of that happens, i have to dig in and see if there's anything even here. did you bring your financials with you? susana: yes. lemonis: why don't we sit down and go over them and we'll see?
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okay. start with the balance sheet. so $545,000 of inventory? susana: yes. lemonis: all right, so you could liquidate all that and generate some cash. susana: yes. lemonis: how much debt is in the business? anna: just the payables. lemonis: are there any bank loans? anna: we don't have any bank loans. lemonis: so the accounts payable are the real problem? anna: yes. susana: yes. lemonis: and that's $719,000. anna: yes. lemonis: so $545,000 of inventory, $700,000 of debt. so how much of this $700,000 is a problem? anna: i would say half a million. lemonis: is a problem. anna: yeah. lemonis: so if your payables are paid and all you're doing is selling the inventory, you're gonna have a lot of cash coming in. anna: yes. lemonis: let's look at the revenue. so last year, $6.5 million in business. gross profit of $2.6 million, which is less than 50% and not good. $3,000,000 in expenses, and the business lost $361,000. if the margins were just what they should have been at 50%, it would have been $3,250,000 in gross profit,
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a difference of $650,000. instead of losing $361,000, you would have made a couple hundred. 'cause $6 million in business, that's a lot. this is a margin game. make a good product. have a good supply chain. have good margins. control your expenses. survive. i have enough financial information to at least understand it better. and maybe you and i can get together tomorrow. thank you very much. okay. let's go forward. the financial statement, last year the company lost $361,000. that's a lot. some of that is attributable to the fact that you had low margins. what i like about the company is that the primary product, the supplex product, is timeless. it works for everybody. so i'd like to make an offer.
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$600,000 for 50% of the business. it pays all the bills, it brings the vendors current, we get back to producing, we get back to selling. with a lot of inventory where you can have enough working capital to do sampling and product testing and trunk shows. and we're moving down the road, okay? susana: i am not sure how i feel. i need to know how anna's going to be played into this, because she's a really, really important part of this component. lemonis: she's not gonna get 50% of the business, like she thinks she's entitled to. that's never happening. susana: oh, my god, no. it's gonna be bad. i think this is gonna be a problem with her. lemonis: then she can quit. susana: oh. anna: unlike you, respect means more to me than money, than anything else. you know what i'm saying? i want to see you in my position. susana: i'm already in your position. anna: i don't think so.
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lemonis: you are not the owner of this business. anna: i didn't say i was the owner. lemonis: and your behavior is unacceptable. yeah. you got your yeah?ork? hey, give me a kiss. [ kisses ] announcer: what's the role of a car company? go! announcer: to take your kids to and from school? mari... yes? what are you doing? don't forget your science project. announcer: we think it can be something bigger. announcer: this summer, during our drive bigger event, announcer: volkswagen is supporting america's teachers.
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susana: i need to know how anna's gonna be played into this. lemonis: she's not gonna get 50% of the business. susana: oh, my god, no. i think this is gonna be a problem. lemonis: then she can quit. susana: oh, my god. lemonis: because she gets paid almost double what you get paid. susana: yes, i know, but... i know.
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lemonis: we got to take these steps. we have to solve the first problem before we can solve the second. so, $600,000 for 50% of the busins. susana: i mean, this sounds like a... a great opportunity. lemonis: and you got the talent for it. and i have the distribution for it. you know that i'm 100% in charge, right? susana: yes. lemonis: do we have a deal? susana: yes. okay. lemonis: hey, guys, we're gonna have an employee meeting. yesterday, i made a deal to invest $600,000 into this company. the money's gonna pay the bills, and we're gonna invest in product development. and then we're gonna look at our business model. the goal is to shrink the line and get rid of the things that don't sell and get out of the business of losing money. even though there are issues with susana's brothers, i've decided to stick with the factory,
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because i want as little disruption with the manufacturing process as possible. and while the brothers are still refusing to meet with me, they're at least staying out of the way. it's the father's factory, and he and susana seem to have a really good working relationship. so that's good enough for me. it's important for everybody to know that there's a bright future ahead and that we're here to save jobs and make more money. [ cheers and applause ] all right, let's go to work. thank you. so let's think about this for just a moment. if i wanted to see the entire susana monaco collection... susana: oh, there's thousands and thousands. lemonis: there's thousands? susana: thousands. lemonis: i already know that susana's collection lacks focus, but before i work on that, i want to look at how susana manages her inventory, how the retailers order product, and how the company actually fulfills those orders. if there are inefficiencies in any of those processes, that could explain why the margins are low. so where can i see one finished garment of every style...
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susana: most of them would be in the showroom right now. anna: yes. whatever's finished is packed immediately and gets shipped to the customer. susana: is sold. and shipped. and they wait till last minute to place orders. anna: yes, exactly. everybody's waiting the last minute to place orders because we know -- they know... susana: they can get it. anna: but at the same time, us as a company, it's very hard. lemonis: you can't forecast. anna: exactly. susana: no, no forecasting. anna: we sitting there, like, "are we gonna get the dollars, because they're not prebooked?" lemonis: you don't know. that's the worry. anna: yes. lemonis: and so this garment, i can get this on-demand in two weeks? susana: mm-hmm. lemonis: what is my price if i pre-buy it three months before? anna: it's the same. lemonis: it's the same. so why would i -- why would i do it? what you could do is you could build a pricing model that would incentivise them to pre-order versus order on demand. we're gonna create three pricing strategies. quick ship will have one price, pre-buy will have a price, and then custom is gonna have a slightly elevated price. moving forward, we're gonna offer our retailers three ways to order products, thus eliminating inefficiencies,
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improving margins, and improving cash flow. first we're gonna give buyers a way to pre-order product, allowing us to buy fabric in advance, lowering our costs, and giving predictability to our manufacturing process. secondly, we're going to have a quick ship line. that will allow retailers to order product that's already in stock, improving our cash flow. third, there's custom on demand, the historical way susana sold products, but they'll pay a small premium for it. now we just need to decide what products we're offering. i want you guys to pick the top 100 best-selling styles. anna: yeah. lemonis: and then once we do that, we're gonna narrow the whole line down to 30. we're gonna produce it and we're gonna stock it and we're going to sell quick ship. anna: no. lemonis: why do you -- why do you not like shipping quick ship? anna: yeah, but what if it doesn't sell? lemonis: if it doesn't sell, then we liquidate it. you okay, anna? anna: i need to step out. you can sit here.
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lemonis: all of a sudden, anna just darts off and susana goes scurrying after her. and before i know it, they're just arguing. anna: that's [bleep] [bleep] i'm always getting pushed to the side. susana: you're not getting pushed to the side. anna: i just did. susana: can you please... anna: the problem with me is that i need to respect, which i don't see. lemonis: i was like, "wait a minute. i thought we were just talking about inventory here, guys." what's the issue with anna? susana: she wasn't given any type of recognition. i think she -- i think she should get recognition. lemonis: what's the recognition she should get? she makes more than everybody else. you are the owner of the company. you got to have a backbone. is that hard for you? susana: yeah. lemonis: why? susana: it is. because i've never put myself front and center. lemonis: why? susana: being beat down from, you know... lemonis: who? susana: anna. i'm just saying, just the acknowledgement and, you know... lemonis: this is not your issue. this is her issue, and you're being her mouthpiece right now. let's grab her and i'll meet you up there. susana: all right. anna: i don't have to comply to this abuse anymore. susana: nobody abused, nobody said anything. anna: yes, it is. susana: what do you think that is gonna happen now?
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anna: you always need to stand up before anything. susana: i don't understand what your point is. anna: respect means more to me than money, than anything else. you know what i'm saying? i was busting my balls for 11 years to get this business up, without staff, by myself, working to 12:00 midnight. i'm working all weekends. the minute i get home, i'm working, because it's 12 hours difference. lemonis: you are not the owner of this business. anna: i didn't say i was the owner. lemonis: and your behavior is unacceptable. i'd like you to go inside. this is gonna be about putting you in the forefront. susana: this is very difficult. it's really stressful to... to...
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and on select natural reflections ladies' tops and bottoms. your adventure starts here. hilda, i like the new do. got some layers in there, huh? the more, the merrier. got to have this stuff in the morning. oh, that's too hot. act your age. get your own insurance company. carlo, why don't you start us with a little bit of cereal? you can spread it all around the table. and we're gonna split the warm hot dog. and i'll have a glass of grape juice to spill on the carpet. oh, uh, do you want some to spill? act your age. get your own insurance company. oh, uh, do you want some to spill? wearing powerful sunscreen? yes! neutrogena® ultra sheer. unbeatable protection helps prevent early skin aging and skin cancer
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everybody. and so, we're gonna stick together and we're gonna move forward. this was the task of coming up with 100 best-selling styles. i actually want to build a core catalog, so how many pieces are actually here roughly? susana: 70. lemonis: 70. so, susana, why isn't there 100 here? susana: we -- we just were not talking. anna: i just wasn't talking to her. not talking. susana: she wasn't involved yesterday. lemonis: so you had to handle this on your own, and we ended up with this. susana: yeah. yeah. lemonis: are you guys talking now? susana: we just started, like, this moment. lemonis: right now? susana: yeah. anna: yep. mm-hmm. lemonis: okay. stephanie: hi. lemonis: hey. stephanie: how you doing, marcus? lemonis: this is stephanie. stephanie: hi, stephanie menkin. nice to meet you. anna: hi. anna. nice to meet you. lemonis: stephanie is a woman that i partnered with a couple of years ago. she was one of the original owners of courage b. and she runs my entire fashion group. she's gonna be very involved in the process
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not only today, but going forward. so let's clear the back wall and let's -- let's move the process along. susana: all right. lemonis: this is what we know as the best-selling unit in the company, and the best-selling unit is black. next the tube top. this is like one of your best sellers ever, right? susana: yes. stephanie: great. lemonis: how many units did you sell? stephanie: almost 3,000. lemonis: 3,000. anna: and everybody's retailing this. lemonis: ultimately, the products that we choose here today will build a collection of core products. stephanie: fantastic. susana: yeah. stephanie: great basic. lemonis: and this'll give us a clear way to have products at a great price and always in stock. quick ship? stephanie: how does this sell? anna: it's not great. stephanie: no. lemonis: quick ship? stephanie: yep. lemonis: all right. stephanie: no doubt. lemonis: we're gonna finish the pool, and we're gonna look at what our margins have to be and we're gonna figure out how we're gonna get these made at these prices. so you guys go through all these and keep sorting, and i'll be back. lemonis: good morning. susana: good morning. lemonis: so i want to really spend more time thinking
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about the quality of the fabrics and amping up the details. today i'm taking anna and susana to premiere vision in new york, a global fabric expo where manufacturers come from all over the world. it's a great place to negotiate directly with vendors and find fantastic fabrics. this is nice. it's got a lot of stretch. susana: yes. i love japanese fabrics. i really do. lemonis: this is really pretty. can we get a sample of these? woman: sure, of course. lemonis: okay, and what's the price per yard? woman: this one is about $6 to $7. lemonis: okay. susana: when you make these in dresses, it fits really well. lemonis: are all these fabrics synthetic? man: yeah. lemonis: typically price per yard? man: $10. lemonis: $10? man: yeah. anna: plus they're too expensive. susana: the conversation always is, "we can't afford it." never? really? anna: some stuff is too expensive. susana: all the time, fabric costs are too expensive. anna: yes, because you look at fabrics like $20 a yard. susana: no, it's not $20 a yard. anna: yes. susana: she dismisses every single thing that i ever tried. i get so excited, and then i go, "can't use.
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can't use. can't use. can't use." and now i have to re-design and really pull out some magic out of nothing. that's not where it started. that's not where the joy starts. i've lost my feel to do beautiful things, you know what i'm saying? lemonis: i can't fault anna for always trying to improve margins and drive down costs. that's her job. but it's also her job to help susana bring her visions to life. and i'm not sure she's always on the same page. i can see susana's point that you are aggressive. anna: you are also very aggressive, by the way. lemonis: i'm aggressive 'cause i want to sell some [bleep] i want to make money. anna: yes, me too. lemonis: and i want the clothes to be right with the right fabrics. and so we're gonna build an infrastructure so there's less crisis. this company is never gonna succeed if susana feels stymied, like she can't afford the fabrics that she really, really wants. well, never again is that gonna happen. can we get these? woman: sure, of course. lemonis: and you want these as well? susana: yeah. lemonis: the money i'm investing in this business is gonna go into resources, like fabric. we're gonna buy in bulk and lower our costs
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and ultimately save money and give her the products that she wants to be creative. design what you love without compromising too much quality. susana: mm-hmm. lemonis: i want her to love everything. anna: it's not -- yes. susana: i want to love everything. lemonis: so do you. anna: yes. lemonis: can we go look at some other stuff? oh, i need to find some zippers. today i'm gonna hold the liquidation soon, and i have two goals -- clear all this dead inventory so that we can get some cash back, but also make room in the warehouse for the core collection that we're establishing. let's just get this stuff out. there's some dresses. but more importantly, i want susana to stay front and center with new customers getting to know her brand. okay. susana: okay. i really don't want to go in... lemonis: why's that? susana: the store. because when i'm designing, i'm trying to be in the creative bubble right now. lemonis: are you designing right now at 4:00? susana: no. lemonis: anna, can i spend a minute with susana? anna: all right.
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lemonis: i know it's a big deal for you, but this is the last thing you got to get over. here we go. say "hi" to this woman. hi, there, ma'am. susana: hi. woman: hi. susana: how are you? lemonis: this is susana monaco, the designer. she's having her sample sell. honestly, if you take two minutes and let her just show you the product. how are you, ma'am? we're having a sample sale, 90% off. woman: what's the name of the company? susana: susana monaco is the company name. woman: is that you? susana: yes, that's me. there's a lot of cute stuff here. we use a lot of different styles. woman: okay, i'll look around. susana: okay. i mean, this is hard. lemonis: what's the real issue here? susana: this is very difficult. lemonis: why? susana: to deal with. you know? you know, with all these years working under this kind of stress. i mean, i -- i don't know if you believe it or not, but it's really stressful to... lemonis: if your business is in trouble
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lemonis: what's the real issue here? susana: this is very difficult to deal with. you know, with all these years working under this kind of stress, i mean, i... i don't know if you believe it or not, but it's really stressful to... lemonis: come on. come on. it's okay.
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susana: i'm not used to anybody being there. lemonis: but i'm here. susana: i know. i know. lemonis: that's why you called me. and i'm not gonna let anything bad happen to you. okay? susana: yeah. lemonis: this is the last hump in the road. so i'd like you to go inside, i'd like you to work with me, let's get some people in. you're giving a lot of women the opportunity to buy your product that maybe normally they couldn't afford to. susana: yeah. yeah. lemonis: think about it that way. susana: yeah. yeah. lemonis: i don't think susana is used to really being out front and having this be about her. historically, it's been about her family or anna or everybody else. well, this is the day that susana's gonna be out front, and she's gonna be proud of what she's done. how are you folks? woman: good, how are you? susana: hi. lemonis: welcome, this is susana monaco's sample sale. can she show you some of her stuff inside really quickly? woman: yes. absolutely. lemonis: how are you, ma'am? we're having a sample sale. 90% off. susana: like 50 or 60 designs, tops, and dresses generally. woman: very cool. lemonis: everything's $20 inside and out.
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susana: this is one of my other favorite dresses. it's a fall dress. this is all our design. everything is us. i'm the designer. woman: oh, nice to meet you. susana: you're picking very nice stuff. i'm glad you stopped by. thank you. thank you. lemonis: where you guys at, about $38,000 for the day? man: yeah, $38,000. susana: it was a really good turnout. huge. lemonis: i'm going to have them run this for a couple more days and my guess is that we clear probably $100,000 out of here. susana: yeah. i got to see how everyone was trying on all the different products and seeing what people were attracted to and hearing some old stories about people who actually had been customers for many, many years, which was a great thing. i'm more relaxed now. i'm not crying now. it was great. lemonis: susana, good job. morning. anna: hey, how are you? lemonis: good, how are you? first thing i wanted to knock out was the core products.
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did you finalize the final core pieces? susana: yes. lemonis: these are all the best bodies. we have them in stock at all times. susana: mm-hmm. lemonis: so that if you get a rush-in order, it means it's actually delivered, okay? anna: okay. lemonis: i feel really good about what was done with the core collection. i'd like to actually do a fashion show. i'm gonna invite journalists. i'm gonna invite magazines. i'm gonna blow this thing up. like any other fashion company, in addition to our core products, we're gonna have new products that come out every season. so what i really want susana to do now is focus on next spring's collection. i've bought new fabric, and i want to have a fashion show to create some buzz. this is gonna be about putting you in the forefront. anna: i don't think that she needs to be subjected to that, because there is not enough time. and your problem is that you never finish anything. lemonis: this is the moment where the owner of the business, person with the name on the wall, has to be crystal clear. susana: step off. anna: okay, but i do. my opinion is that she does not express herself clearly. susana: this i can't deal with actually.
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that, you know, i don't -- i'm not clearly representing what i want to say. i don't like it. i don't like it. whether you think i, you know, can clearly represent myself or express what i'm saying or not, i don't care. this is bull[bleep] anna: that's not bull[bleep] susana: it's bull[bleep] anna: no, it's not. lemonis: i was annoyed that anna continues to try to bully susana around and tell her what to do. there's nothing new about that. but what was new is that susana was standing up for herself. now, that's progress. i think you have to try to be more helpful in pushing her to the forefront. anna: some things i disagree with you. i think that like i said to you -- lemonis: some things you disagree with or most things? it's still susana's business. that's still the name of the company. anna: i talk over people, but it's not on purpose. i'm not trying to be disrespectful. you know what i mean, sometimes it's just like -- lemonis: tell her that. anna: yes, and she knows that sometimes i have an idea and i just have to say something. susana: no, but it is disrespectful. this is something that you do all the time. anna: i'm sorry it's disrespectful to you, but i did not mean to be disrespectful. maybe i can be more mindful about it and change this, you know. lemonis: okay, well, should be a great show.
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so you need to get your head around being at the front. with the core collection finalized, we're heading into production to build the inventory so that retailers can get those items all year long. but more importantly, the fashion show is quickly approaching. and what i want susana to do is to focus on that and getting the spring line done. susana. susana: hey, marcus. how's it going? lemonis: good. i wanted to check in on the drawings for the new collection. have you historically had products this long? susana: um, not generally. lemonis: but what prompted you to do that? susana: because the fabric has a really great drape. it's got a really great hand. lemonis: can you print some out, because i'd like to see some of the colors. susana spends a lot of time and money printing out different designs, and so i went out and i bought her a new epson printer. it doesn't have a cartridge. and it's mobile. you can move it all around the office. not only is the color vibrant, but it also comes with an eco-tank
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and up to two years' worth of ink, so i'm not wasting a ton of money. you know how you buy a printer and you're like, "i spend more on cartridges than i did the printer." susana: the colors came out really great, and it's fast, too. lemonis: i love it. susana: yeah. lemonis: i thought the three of us could just spend a minute chatting and find out how things have been going. susana: i want to be partners, but not in the terms of her telling me what to do in my own business. anna: i'm not bossing anybody around, because it's her company. if it's her company and it means that she doesn't need to produce line on time, that it bothers me, you understand? if she doesn't like my opinion, okay, fine, but -- susana: i don't like when you have this impression, "well, she..." this kind of sort of push me on the side kind of thing. i don't like it. i have to be able to say my opinion and say what i feel. i'm the owner of the company. my name's on the door. lemonis: i just feel like this is gonna continue for years. how does this resolve itself? susana: i don't know. lemonis: do you want anna to be part of the company going forward? susana: if there's a change. if there's a change, yes. if there's not a change, then we can, you know, part ways. anna: she cannot face things by herself.
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susana: can you please shut up? i just want to clean this up, do you understand? anna: instead of waiting for you to say all those things she told me she wouldn't, you know what i mean? she would have had this conversation -- susana: 'cause you know why? i'm done. i'm done with this relationship, how we work. i'm done with it. lemonis: this is a big night. susana: yeah. lemonis: have you seen how many people are up there? susana: no. lemonis: "allure's" there. "vanity fair's" there. it's packed. has been excellent. they really appreciate the military family
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[ kisses ] announcer: what's the role of a car company? go! announcer: to take your kids to and from school? mari... yes? what are you doing? don't forget your science project. announcer: we think it can be something bigger. announcer: this summer, during our drive bigger event, announcer: volkswagen is supporting america's teachers. announcer: join us, announcer: and drive something bigger than yourself. like.. pnc easy lock, so you can easily lock your credit card when its maximum limit differs from its vertical limit. and clover flex, for when you need to take credit cards when no one carries cash. or requesting a call to help get a new credit card- one that hasn't followed the family goldfish. pnc - make today the day. anna: she cannot face things by herself.
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she could not talk -- susana: what do you mean face things by yourself? you know why? i'm done. i'm done with this relationship, how we work. i'm done with it. lemonis: do you guys realize that the two of you really argue about nothing? anna: sometimes, you know, i can be aggressive, and i do get upset. susana: i want it to work. i've always wanted it to work, but there has to be mutual respect. that's what needs to happen. lemonis: we have a big presentation. i'm excited about it. i've spent a lot of money. do you think you guys can work together? susana: i think we can work together. lemonis: do you think you can work together? anna: yep. lemonis: it's a busy time at susana monaco. i've invested $100,000 into creating the new core line and building up the inventory. and in just a few days, we're gonna be unveiling our new spring line at the fashion show. susana: oh, that's cute. anna: oh, that's cute. very cute. what do you think? lemonis: it needs to be clean, but i actually like the fact that it's slightly frayed. i like the fact, susana, that you put sheer all the way around. it really makes it dressy. the outside fabric feels just slightly too short.
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we're making improvements overall. but most importantly, the line is looking very promising. fabric feels much better. and i like the laser cut. susana: the laser cut's really good. anna: and that is very pretty. lemonis: i like what you did down here. remember how uneven it was at the bottom? susana: yes. yeah. i mean, it fits really good. lemonis: just a couple more details to iron out, and we should be good to go. nice. really nice. i think the collection looks great. today we're gonna be having the fashion show. i invited bloggers and editors and buyers to create a buzz. fashion show is a different form of marketing that not only puts susana monaco's new line on display, but hopefully it puts susana on display, as well. susana: just memorize where you are space wise. oh. hi, marcus.
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lemonis: hi. do your thing. i'm not even here. susana: can we try it one more time? when you guys start, everybody, your starting point is when the girl in front of you hits that corner. let's try it again. lemonis: obviously i want the clothes to get a huge reception. and i spent a lot of money putting on this show. but what's more important to me is that i want to see susana getting out in front of people, being proud of her work and who she is. susana: everybody has to stand. this is standing. this is power position. shoulders back. you own this. lemonis: this is a perfect night for you to get a fresh start. tonight's about susana. anna: yes, absolutely. lemonis: and i want you to really support her. truce? anna: that's a hard mission. i was there front and center holding her hand for years. lemonis: but, anna, don't let your attitude get in the way of your talent. anna: no, no, no. lemonis: do we have a deal? anna: yes. lemonis: let's get back in there and support her, okay? susana: all right, ladies, let me take a look, please. you all look incredibly beautiful. mario: if anybody need help, i can do this.
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lemonis: ladies look amazing. this is a big night. susana: yeah. lemonis: this is like the rebirth. susana: it's crazy. lemonis: what's crazy about it? susana: just unbelievable, actually. lemonis: are you nervous? susana: yes. lemonis: do you see how many people are up there? susana: no. lemonis: it's packed. "allure's" there. "vanity fair's" there. susana: okay. don't miss your gto experience our most advanced safety technology on a full line of vehicles. now, at the lexus golden opportunity sales event.
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lemonis: it's packed. "allure's" there. "vanity fair's" there. there's, um... susana: okay. maybe i shouldn't know that. lemonis: this is where you were always meant to be. susana: yay. very exciting. let's have a show. come on! whoo! lemonis: folks, it's a big night. i have the pleasure of being a new partner in a business called susana monaco. tonight, we're gonna be showing you a brand-new collection that susana has designed herself, and it is the spring/summer collection for 2017. the new spring line is manufactured
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with high quality supplex, giving it a cohesive, unified look. if it sells as well as i think it will, then i'll consider putting it in the core collection. but it all starts with the buzz we get created today. don't shake. it's okay. this is what you worked for. susana: yeah. lemonis: and you know what? all of this is your talent. i invested in what's inside of you. okay? [ cheers and applause ] susana: i'd like to thank marcus for giving me this opportunity to revive this company. and i really appreciate it. thank you so much. thank you. and this is my dad. lemonis: i was really touched by the fact that mario came out to support susana. he's really been encouraging through this whole process. it also seems like the family dynamic at the factory has really, really improved. you feel like your relationship with your brothers is getting a little better?
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susana: they were happy. i think it's great that we went through that whole process, and i think they're getting past it. lemonis: and with the manufacturing process for this line going off without a hitch, well, it shows me that real progress is being made. susana: she's a confident, chic, a strong woman who feels good about herself. lemonis: so you'll be able to buy it at bloomingdale's, nordstrom, saks, rue la la,, shopbop. throughout my journey with susana, i had one real goal in mind, and that was seeing susana comfortable with putting herself at the forefront. people like to buy from people. now that she's not hiding anymore, her sales are starting to follow that same path of growth. i think the sky's the limit. anna: congrats. susana: thank you so much. anna: you know we do love each other. susana: yes. anna: and we are really good friends. susana: yes. we have to move forward now. anna: yeah. lemonis: i'm very proud of you. susana: thank you so much, marcus. lemonis: you know, one thing that i think is important for you to remember
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is that you can't lose your backbone anymore. susana: no. i think this whole experience has been an incredible turning point, a change. it's not gonna go back. lemonis: good luck. susana: thank you, marcus. lemonis: i'll see you tomorrow. susana: okay. courage. bis: is a family-run clothing company with seven stores across the country, but they have stumbled badly over the past two years. lousy decisions... noemi: i never approved this design. -nicolas: you approved this. -stephanie: are you kidding? lemonis: ...and poor execution... i just see cash. ...have put the company in a deep financial hole. that's created a ton of family drama. nicolas: you want all of the accolade without doing any of the work. lemonis: if they can't figure out a way to iron out their differences, there won't be a business to fight over. stephanie: nicolas, i don't want him to walk out that door because of this. lemonis: my name is marcus lemonis,
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