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tv   The Profit  CNBC  October 15, 2019 10:00pm-11:00pm EDT

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majmundar: lori believe in me and believed in my product, and lori and i are gonna make this the best product it will be. whoo! at a family-owned men's apparel business on the coast of california... john: this is our brand. it looks great. it's tankfarm. it's really high quality. lemonis: ...the tie that binds is about to unravel completely. mike: you want to be my boss sometimes, where i'm like, "dude, we're partners." john: no, you want to talk real? let's talk real. lemonis: brothers mike and john found early success selling to big stores like nordstrom and urban outfitters. but after they opened up two locations of their own, profitability never followed. mike: is it the product? is it a merchandising? why doesn't this store make money? lemonis: now the brothers are clashing more by the day. john: so it's all my fault the stores didn't make as much money? mike: you sometimes act like you know best. john: oh, my gosh. lemonis: even as mistakes pile up...
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ashley: we might want to spell "barbeque" correctly, though. lemonis: ...and morale withers away. jackie: if i had another job opportunity, i would take it. amy: it's just mind-blowing sometimes. lemonis: if i can't mend their fraying relationship... both of you, get your [bleep] together and figure out how to co-exist and have mutual respect. ...their beloved brand will go bust. that store is closing, unfortunately, no matter what. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not gonna wake up every morning wondering if we have a job. we're gonna wake up every morning wondering how many jobs we have to do. it's not always pretty. everything's gonna change. everything. but i do it to save jobs, and i do it to make money. this... let's go to work. "the profit." [ applause ] ♪ mike and john anderson founded tankfarm back in 2003, and today, they have two stores --
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one in huntington beach and the other in their hometown of seal beach, which is where i'm heading right now. i have a number of investments in the fashion space, and if this one goes well, it could fit in very nicely. woman: hi, how's it going? lemonis: hey, how are you? woman: good. thank you. john: what's up, man? lemonis: how you doing? john: [ laughs ] i'm john. lemonis: john, how are you? john: nice to meet you, man. lemonis: nice to meet you. mike: mike, awesome. lemonis: mike, how are you? can you guys give me a tour of the store? i'm trying to understand the concept. john: absolutely. so, tankfarm is supplies for gentlemen of sport and leisure. our strong demographic is male 25 to 45. that's our audience. this is our brand. fits great. it looks great. we buy the blank. mike designs the graphic. it's really high quality. this is seal beach. this is the seal beach pier. lemonis: all $29? all your t-shirts? john: they are. lemonis: cost? john: about 6 bucks. lemonis: killer margins. good quality. john: great quality.
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lemonis: and the product is well done. mike: thank you. lemonis: you guys understand color. you understand quality of fabric. you understand design. are these all your house brand, or is there a combination? john: we have about 65 brands. a guy comes in, and he can get everything from his socks, boots, to sunglasses. lemonis: exceptionally high margins or average margins? john: i would say the non-tankfarm, our average is 40% margin. lemonis: the margin expectations that should be in that store should be north of 55%, maybe even north of 60%. these third-party brands should actually add fuel to the retail business, not drag it down. what's this store do in revenue? this location? john: about 540-ish. lemonis: 540 out of this store. john: and about 560 out of the other store. lemonis: huntington beach store make any money? john: $15,000 last year. lemonis: this store. john: i mean, like, what, 5 grand? lemonis: okay. mike: but also we have a private label design business that we do on the side. lemonis: oh, really? john: the prime label is a different company. lemonis: and that's designing and producing for other people. john: the anderson brothers design and supply --
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lemonis: how much revenue? john: last year, $1.7 million. lemonis: wow. what kind of profitability does anderson have? mike: 2017, after $1.7 million, about $200,000, after we get paid. the stores don't pay us. lemonis: wow. so, wow. as i dig into john and mike's business a little bit more, i'm learning that there's actually two separate, distinct companies. tankfarm, which has the two retail stores that are struggling, and anderson brothers, which is basically an apparel company that helps other companies manufacture goods and products with their name on it. a bit of a private label apparel company. it's clear to me that these guys really understand how to design and manufacture and distribute products. but running two stores? not so much. who does the planning? john: i do that part. lemonis: oh, so you're the "buyer"? john: i'm the buyer. mike: but i do the hands-on graphic design. john: i buy the best of the best. lemonis: are you 50/50 partners?
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john: yes. mike: yeah. lemonis: how did you start the business? mike: we're third-generation printers. john: our grandfather, he started the print shop in the '70s, and that was paper goods. and then in the '80s, our dad started doing t-shirts. mike: he still prints our stuff. john: yeah. lemonis: oh, that's cool. john: so, yeah, ink's in the blood. mike: where we grew up, orange county, there's a three-mile area of these big oil tanks. lemonis: okay. mike: and that was called the tankfarm. john: we kind of claimed it since we're from there. hey, let's start a record label and call it tankfarm. we were both in bands. mike: we had to make merch for the shows. john: we were really good at merch, and all the t-shirts sold, but the music didn't. mike: wife's, like, you should put up your own store. john: everyone told us, "make your own." lemonis: you're married. mike: married, yeah. i have three boys, little boys, and he has two girls. and my wife owns the women's boutique across the street. lemonis: oh, very cool. mike: that was fun, it was a blast. singer, and younger brother played guitar, wrote a whole bunch of stuff. lemonis: how many brothers? john: there's three. lemonis: so there's one more. mike: he passed away. john: yeah. lemonis: oh, he did? mike: yeah, so about almost two years ago. john: almost two years, cancer. lemonis: oh, man, i'm sorry. both: that's our brother, ricky. john: he's the talented one.
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mike: yeah, he was the singer/ songwriter, super talented. we have his record here. john: there's a pain that goes through cancer. hard thing to talk about. mike: when things happened, and it kind of went to, like, stage four and all that, we're like, "this is not making sense. this does not add up. this doesn't happen to us." john: yeah. mike: the andersons. you know, vacation every year in the mountains for snowing, up north for water skiing. john: we don't vacation anymore together. we don't do a lot of things because it's just too -- lemonis: as a family. john: yeah, because it's too painful. mike: our family just, like, broke apart. this back area is a little too cramped. lemonis: because you're trying to run two businesses out of 'em. mike: exactly. john: so this is the office. lemonis: hi, there. val: hi. lemonis: i'm marcus. val: val. nice to meet you. lemonis: val, nice to meet you. what do you do? val: i'm the office manager, and i take care of finances for tankfarm. i do -- lemonis: the stores? val: the stores. i do, like, the deposits at the banks. i do payroll. lemonis: and are you guys all paid through anderson? val: correct. lemonis: okay. john: this is amy.
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amy: i'm the production manager for anderson and tankfarm. lemonis: okay. amy: and then i do finances for anderson, as well, too. lemonis: are you on anderson's payroll, or are you -- amy: yes. john: we know. mike: anderson's paying the bills. lemonis: but anderson does not produce product for tankfarm. amy: they can't pay on time. john: tankfarm can't pay on time. lemonis: is that the truth? amy: yeah. lemonis: so, i never like the brand on the door to be the brand on the product inside that store. the idea of creating brands and doing what you do inside of anderson is great, but what i would prefer to see is anderson on the door, and then inside of the store, other brands that you may own in your back pocket. when the brand on the door and the name on the product is the same, the customer is gonna see that as almost a house brand, like generic cereal. and the high margins that you were actually going for, they may not come to fruition. what's it like working for these two guys? val: the way that they treat us, they're fair. they're nice. i will say that they are kind of spread thin. amy: usually, it's pretty stressful, and you know, john is going,
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"give me the new art, new customer, new business, sales." and he's just very pressured and wanting to make sure we're doing our jobs. sometimes i feel like they just need to focus on one thing. lemonis: are they late with their deadlines? amy: sometimes. lemonis: and who's late? mike: me? john: and i'm like, "get this done so we can shift the goods." lemonis: bye, ladies, thank you. amy: bye. thank you. lemonis: thank you for the honesty. [ laughter ] we should just -- you guys should just change the street to anderson way. mike tells me that his wife's in the apparel business, and so i wanted to get a flavor for how her store would look. i was just curious. mike: my better half, candi. candi: hi. lemonis: how are you? candi: i'm good. lemonis: nice to meet you. candi: nice to meet you, too. lemonis: what a beautiful store. candi: thank you. lemonis: maybe you guys should come over there and teach us something. candi: hey, i will. [ laughs ] lemonis: what will this store do in numbers on an annual basis? candi: this one did $1.3 million. lemonis: she's basically doing more than the two stores combined in one store. what do you think their store looks like?
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candi: i always tell 'em it looks like a museum. i tell them, let me merchandise, but you know, so... john: i don't really agree. woman: i think it's a little in there, a little maybe too cool. john: i don't agree with the too cool thing. i don't agree with it at all. candi: i don't want to step on any toes. lemonis: i was surprised how quickly john got, like, really defensive. why'd you get all whacked out? john: it's hard for anybody to go in a place, like, "this is amazing. you guys are terrible." that's not easy. lemonis: nobody said that. john: it felt that way. lemonis: whose motorcycle? john: mine. well, it's ours. mike: mine is actually right there with the side car. lemonis: i'm riding in that thing. john: oh, 100%, yeah. [ engine revs ] lemonis: yeah, buddy. what i really want to do now is go to the dad's print shop. whoo! which is ultimately where it all started. john: [ laughs ] lemonis: whoo, that was fun. john: hey, dad. lemonis: mr. anderson. nice to meet you, sir. rick: nice to meet you. lemonis: oh, wow. it's a big shop.
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rick: this is the screen printing side. lemonis: okay. how much could you crank out of here? rick: the other day, we did 2,600 shirts. lemonis: in one day? i honestly was surprised with how big the screen printing shop was. mike: angle, good pressure all the way in. lemonis: what i like about what i see here is it's connected to the family, so i know there's good pricing. oh. rick: slick. lemonis: come on with the gold. and this business could really grow. there is a ton of capacity. rick: mike, he's a great graphic artist. john is the sales guy. he gets the sales. he's very determined. i can't think of any better. mike: thanks, dad. john: thank you, pop. rick: we've been through a lot with my son. [ sniffles ] lemonis: yeah. mike: we could show you a video. a video he did for his daughter. lemonis: i would love to watch that video. did he write this song? mike: he wrote it and sang it for his daughter. ricky: ♪ don't ever stop loving ♪ don't let anyone take your crown ♪
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♪ i'll always look out for you ♪ rick: [ sniffles ] lemonis: wow. his voice is amazing. mike: he loved to have a good time. we don't want to just always be sad about it. we want to remember -- john: celebrate his life. mike: celebrate his life. lemonis: you can tell by the way they feel about their father and their brother that they have character. and any time you meet people that are rich in family tradition, those are the underpinnings of good business partners. guys? john: hello, again. mike: hey, marcus. lemonis: how does this store do? mike: we're not hitting the numbers that we thought we would. lemonis: what did you forecast for this store? john: a million a year. we're doing -- lemonis: half of that. john: half of that. lemonis: how much is the rent here? john: about $10,000 a month. where it's about $6,500 in seal beach. lemonis: when's your lease run out? mike: next month. john: next month. lemonis: did you bring your financials? john: we did. lemonis: let's sit down and go over 'em. john: okay.
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so this is tankfarm seal beach. lemonis: seal beach, $530,000, and the store made $16,000. 56% margins. 56% for a store is slightly less than average. you got huntington, $539,000 in business. this store shows that it made 13 grand. very little return. anderson brothers. $1,742,000 of revenue. 40% margins. total expenses are $544,000. business made 155,000 bucks. between all the entities, $2.7 million in total revenue, $184,000 of profit, $530,000 of real, tangible assets, $511,000 of liabilities between payables and loans. so you're not upside down. so why'd you call? john: here's what i'm gonna say. mike: hold on. john: wait, no, hold -- mike: wait, no. john: let me say it. stop. mike: geez louise.
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john: i gotta say something. just let me say it. okay. something's off. tankfarm should be a bigger brand. lemonis: i think where this business has potential is largely in product development. i think whatever i offer, it's gotta just be everything in a pot. i don't like money moving like this. it scares me. okay, so here's what i want to do. john: okay. lemonis: my offer is $2 million. a million dollars in equity, and a million dollars in a line of credit. the million dollars of equity, i want 50% of the business for it. 50.001. i want to have more than a seat at the table. i want to have a seat at the table, and i want to have a rubber stamp. mike: let me ask. where do you see tankfarm in this? lemonis: i don't know. i like the idea of tankfarm, but i do not like the idea of the name on the building is the name on the product. john: this is something i've always been thinking about. so we said, "hey, we're gonna do something called anderson brothers. it's gonna be for our family.
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it's gonna be for my little girls. it's gonna be for our nephews, ricky's kids. it's gonna be for his sons. we're gonna build this thing, and they're gonna work for us." that's our dream. that's my dream. and i want to give them equity in this thing. that's why i'm -- it's harder for me to be, like, "sure, yeah." mike: there's not a lot there. john: i'm struggling with that because there's not a lot left over. that's where i'm struggling. could we be 33, 33, 33? then we could have something. lemonis: it could be. whether it's 33 or 50.1, i'm gonna have full control. john: got it. lemonis: so, if 33, 33, and 33 is more comfortable for you, then great. i'll back my number down to a million. $500,000 and $500,000 instead of a million and a million. it's a better deal for me financially than $2 million for 50.01. john: that is, i was just -- i think we should stick with the $2 million, and i think we should do it that way, and i think you and i should -- lemonis: unh-unh, that deal's off the table. my first offer's my best offer, all the time. john: let's call it $1.5 million. let's go a little bit more.
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let's get back to the first -- closer to the first deal. come on. let's go closer to the first deal that we should have done. lemonis: yeah. no. john: [ laughs ] that sucks. lemonis: if your business is in trouble and you need my help, log on to... (alarm beeping) welcome to our busy world. where we all want more energy. but with less carbon footprint. can we have both? at bp, we're working every day to make energy that's cleaner and better. and we see possibilities everywhere. to make energy that's cleaner and better. i'm christina stembel and i chose the spark cash card from capital one with unlimited 2% cash back on everything i buy why wouldn't i get this card?! i redeemed $115,000 in cash back, which doubled our marketing budget last summer. what's in your wallet?
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come on, let's go closer to the first deal that we should have done. lemonis: no. john: [ laughs ] that sucks. lemonis: my final offer is a million dollars. $500,000 in equity. $500,000 in a line of credit for 33.3%. 100% control. john: [ laughs ] well, then, that's the deal. lemonis: do you guys need to take a walk for a minute? john: yeah, yeah. mike: no, no, no, no. no, i don't step. change it again, dude. sit down. let's freakin' do this thing. john: oh, man. okay, you got a deal, marcus. lemonis: okay. what do you think your brother would say right now? john: he'd be -- he'd be giving you a high five, and he'd be saying, "good job, guys." mike: [ voice breaking ] he -- [ clears throat ] he'd be very, very stoked for us right now. lemonis: boom. john: thank you. lemonis: okay, guys. john: thank you, partner. lemonis: you got it. all right, guys.
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what's happening, everybody? john: yeah, what's up, marcus? lemonis: yes! john: so excited. good to see you. lemonis: how you doing, buddy? can we just get everybody together so they know what the heck's happening? john: yeah, absolutely. lemonis: so let's talk about what's -- what's actually gonna happen. we made a deal for me to invest a million dollars. there isn't really anybody out there creating men's fun, cool, trendy things. and when there are, they do really well. we shouldn't be doing things that don't make us money and that are distractions. are the two retail stores profitable? andy: no, sir. lemonis: what does that lack of profitability, what pressure does that put on the other business? amy: a lot. i mean, because if they need financial help, then anderson is the one that has to help them out. john: i don't feel it's that -- that much of a, you know, of a burden. amy: i have to, you know, scurry and figure out who am i maybe not gonna pay to support the retail stores. mike: our lease is up in huntington beach. lemonis: that store is closing, unfortunately, no matter what.
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[ cellphone ringing ] mike: this is a client... john: it's a pissed client. mike: mariana? no problem. i wasn't sure if you got my e-mail. i've been doing this for 20 years, and i'm super frustrated with myself because i sent the printer a mix-up on the art. it's just inverted. mariana: ugh. mike: it still looks cool, but i was, like, 440 shirts printed. we can no problem, you know, of going back, but... john: hey, mariana, this is john. mike: wait, let's -- john: well, look. so real quick, what i was hoping for is that you could take these shirts. it's hard to even see the difference. you could take these shirts at a small discount. mike: yeah, yeah, i'm -- yeah, there's two things. we're gonna fix it. not a problem. awesome. thanks, mariana. we'll talk to you soon.
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lemonis: what do you think i'm gonna ask you right now? john: just reprint the shirts 'cause they're wrong. lemonis: why are you involved in his situation? if he made the mistake, whatever it is, he was working on it. john: i felt like he wasn't gonna give her an option of, like, "hey, you want these at a discount price?" that's all. mike: but i told you, "please let me handle it." trust me, i will always do what's best for the business. i want to make anderson brothers as big as possible, tankfarm as big as possible, but i have to convince you, i'm all-in. lemonis: as broken as their process is, they're able to attract really good accounts. i mean, kona is a legitimate company. hooking the customer is one thing. you have to now execute on it. and the attention to detail, that's gonna actually ensure that you're gonna get the customer back a second time. john: marcus, we took what you said to heart about creating different brands, and so we did "outsiders," and we did some research. lemonis: does anybody have it trademarked? john: no, so we actually call it the outsider collection. it's great. it's not motorcycles and switchblades.
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it's going outside and being outside and doing surfing, rock climbing. it's everything. lemonis: get outside. john: it's get outside. it's go do something. lemonis: i think it's spectacular. anderson brothers is the design firm and the manufacturing company and the apparel company. that's the -- that's the umbrella. underneath it, you have different brands. tankfarm is a brand. outsiders, great. what's the product gonna look like? what's the assortment gonna look like? john: i mean, we'll design -- our team will design it in this room. lemonis: okay, guys, awesome. good job. ♪ hey, john and mike? john: yeah. lemonis: i want to understand what sells and what doesn't sell, so i'd love to see the sales report by product and brand. john: okay, okay. lemonis: so this is basically here. between the two retail stores, 34,838 items were sold. 22,181 of them were tankfarm.
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the next brand sold 1,132. so the whole store is filled up with stuff that you can make. we're not gonna have a store where we sell other people's [bleep] mike: yeah. lemonis: right? mike: right. lemonis: by the way, guys, i hate to say this to you, but your whole store could be right here. john: and then make the rest of it offices. lemonis: you want to have a storefront that doubles as an office, that doubles as a creative space. let's get everything that's tankfarm to the front. let's merch it the right way. let's get some extra help. can your wife come over and help? mike: yeah. lemonis: let's call her to see if they can come just help for 10 minutes. mike: got it. lemonis: all right? cool. there's two real key issues that exist in this space. number one, there isn't enough space for everybody to work in. and when i think about the entire space, and i look at the revenue that's created with socks, t-shirts, hoodies, well, you don't need an entire store to do that revenue. so i want to give the creative part and the manufacturing part more space. okay, here's the deal.
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this yellow line, can't cross it. if you can't fit it in the front of the store, and it doesn't turn, it doesn't stay. john: got it. lemonis: this is the new section right here. candi: do you want me to go back and get it? wait, wait. i stole all my plants from my store. lemonis: i like that cactus. candi: what can we do? lemonis: we want you guys to help john remerchandise the front area. we love your ideas. candi: all right. lemonis: because your store is perfectly merchandized. do your thing. candi: we have less space. we need to make it feel really, like, maximizing, you know, but set the floor plan, and then merchandise. john: no, no, andy -- let andy do this part, and then we'll move things around, but let andy help you. lemonis: actually, let's do this. i'm gonna take you out of the equation for just a second. john: okay. lemonis: let her provide the direction. you guys will work together. john: okay. candi: we need a table this size. half this size. mike: where do you want the cash wrap? candi: i would do it right at the end, way over here. mike: so you want the cash wrap here? candi: yeah, because i don't want to, like, lose this space. john: i wouldn't put a cash wrap here if that's the front door. there's no way to get through.
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candi: let us -- let us, like, play with it, and then we'll see, 'cause it's so hard -- and what we're gonna do is, we're gonna balance it. we're gonna put your bread and butter in the middle. all flannel. john: i actually don't agree with that. i think we should do all the t-shirt walls 'cause we sell tons of t-shirts. candi: i know, but you want them to buy the flannel and the t-shirts. i want t-shirts, flannel, flannel, and then denim. mike: let's move it over, okay? yes, we're gonna move it, okay. john: this is all wrong if this is all we have. that corner's wrong -- mike: no, but we have lots of pieces -- candi: i think that's perfect. i don't think there's anything wrong with that. lemonis: [ laughs ] john: we have to rethink -- we have to rethink the whole thing. mike: john, okay, slow down. john: mike, i'm not upset. mike: you're not -- like, let's have a conversation. john: i'm not upset, but what we have here isn't working. we need to get rid of these. candi: i promise you we're gonna make it work, though. i envision it. it's gonna look good. mike: john, can you just let her do her thing? john: we brought some new ideas, and we wanted to show you some of the artwork that our team put together. because your logo pops out here, i say, why don't you make that a guitar? it's always that little extra thing that makes a shirt pop.
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cascade platinum. the number one recommended brand in north america. we need to get rid of these. candi: i promise you we're gonna make it work. i envisioned it. it's gonna look good. mike: john, can you just let her do her thing? john: okay, let's -- let's play legos and redo it tomorrow. i told you this is the part i didn't want. lemonis: all right. john, i'm just gonna have a moment of truth. john: let's just throw stuff all against the wall and see what looks good. lemonis: maybe they have a better way that we haven't thought about. john: we -- i don't think we need their help.
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lemonis: i felt like i needed to take him out of the room and sit down with him and really understand what's driving this reaction. what's going on? john: all these people, all this stuff. i just would rather plan it out. i don't like having outsiders come in and be, like, "no, do this, do this, do this." we talked about how we aren't doing the right things in our shop. those are hard things to talk about. lemonis: um, i think you really have to work on letting things roll off your back a little more. john: totally. but i'm good. i'm good. i truly am. i appreciate you. lemonis: did the tequila make you good? john: it did. it actually calmed the nerves a little bit. lemonis: all right. let's go. john: okay. lemonis: so, when i come back, what i ultimately want to see is this store finished. i'm gonna give you time, so you guys have to figure all this out. all right, guys. i'll see ya. john: okay, thank you, marcus. lemonis: you got it. as we begin construction on the seal beach store,
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the huntington employees are beginning to wind the store down and to liquidate it. with the huntington beach lease coming to an end, we'll be able to get rid of the cash drain and take all that money and focus on growing anderson brothers. today, i'm taking the brother to lucille's, which is one of the biggest regional barbeque places in all of california. if the company's gonna really start expanding the number of businesses that it designs and manufactures product for, well, this is a great one to start with. john: well, right on, guys. we brought some new ideas. and i wanted to show you some of the artwork that mike and our team put together. mike: this is kind of a fun concept to bring your flying pig. john: when you use interesting-looking shapes, it's just -- people are drawn to it. mike: it has a really cool music motif here. what about doing like rhythm, blues, and barbeque? he threw that out there. that's pretty cool. john: because your logo pops out here, i say, why don't you make that a guitar?
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ashley: we might want to spell "barbeque" correctly, though. john: you know, mike did this earlier. "barbara"? mike: dang it! john: what does it say? lemonis: look, i love you, mike, but you whiffed that one. i mean, it wasn't like you misspelled "onomatopoeia." you misspelled "barbeque" at a barbeque restaurant. who proofed this? john: i did not proof it. mike: my fault. lemonis: okay. we talk about attention to detail. we sort of missed the most important detail. [ laughter ] john: so, is there anything about this that you liked? did you like the concept? ashley: okay, this one i don't like mostly because we're trying to move away from this pig. it's too aggressive. john: got it. and how about rhythm, blues, and barbeque? i just thought that was really a great tag line, and a lot of fun. brad: i really like this one. ashley: i like it, too. brad: it's eye-catching. it's got the spirit of lucille's kind of in the design. john: sounds good. mike: so we'll put that together for you. lemonis: we're leaving with some redeeming value where they like the item, but to say this meeting was a home run, i would say it was more like a bunt.
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we barely got on base, and it was by accident. how'd you think that went? john: i think i rushed it. lemonis: you step on him constantly. john: okay, sorry. lemonis: and i don't think you realize it. mike: he just took over, and -- and -- john: [ laughs ] i didn't mean to. mike: but then the problem is, people read that, and they're like, "dude, why can't they just -- what's up with these brothers?" it's funny sometimes, but after a while, it's not professional. i knew we could do better, and i -- lemonis: it's about making yourself better, too. mike: exactly. lemonis: and so if you strive for always making sure that you proof stuff before you come. somebody looks at every last detail. john: good. lemonis: all right. you've got some work to do. john: all right. good stuff. lemonis: what's up, guys? in order for them to really expand their horizons and create new lines and diversify the product offering, they're going to need to have additional resources at their fingertips. so, i'm taking these guys to a cut-and-sew factory.
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how are you? i'm marcus. robby: sir, how are you? pretty good. nice to meet you. lemonis: nice to meet you. robby: so here we do cutting, pattern making, design, development, production. everything mostly we do is u.s. cotton. lemonis: that's really nice quality. anderson brothers is a manufacturing, design, and sourcing company. and so you have to think about different bodies and different fabrics, being able to live in different brands and different price points. john: okay. lemonis: good, better, best model. mike: yeah. john: gotcha. lemonis: do you have different price point shirts here? can you bring us three levels? robby: sure. this will be one level, which is mass -- mass market. lemonis: why don't you guys work on that? bring things that you think are good, better, best. the key behind the good, better, best model is to really explore all avenues of revenue and all price points. in the good category, we're looking for entry-level price points. maybe something that's under the $39 range. in the better category, you're gonna try to stay under $55, $60. and above that, the best category, you're gonna stay under $80,
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maybe even $100, capturing all of the available market. so, who is the outsiders for? mike: what is more elevated? tankfarm or this? john: i would say that outsiders would be the elevated brand. lemonis: that's the best. john: that's the best. lemonis: what's the better? john: the better would be tankfarm. lemonis: what's the good? mike: we need to develop something new, like grit and gravel. lemonis: mm-hmm. you want to go to another meeting, and you want to have a chance? i want you to make the presentation. john: uh-oh. lemonis: john, hang on. mike, i know you're just as capable, even though maybe not everybody else thinks that. mike: he doesn't realize that certain things come down to respect. that's like you saying, "i don't trust you, i don't resp--" it's, like, you want to be my boss sometimes, where i'm like, "dude, we're partners." john: no, you want to talk real, let's talk real. you gotta look at the things that you're being lazy on. 'cause i'm like, "hey, man, i'm gonna spend $3,000 on shoes, come look." and you did not care.
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mike: i did look sometimes. you sometimes act like you know best, and i should have been a little more involved, then maybe the stores would have actually made more money. john: so it's all my fault the stores didn't make as much money. if you would have done it... mike: no, if i would have helped. john: and i asked you to help me, you didn't do -- you say you want to avoid a con-- you're saying two separate things. mike: no, what i'm trying to say is -- john: you're trying to, like, push it off. mike: no, john, come on. john: oh, my gosh, man. john: we're all the same. we're all the same. jackie: i'd like to think that we're all the same, but that's not how everybody is treated here. amy: i've never had a boss mock me to my face, behind my back. it's just mind-blowing sometimes. mike: i should have been a little more involved, pain happens. saturdays happen. aleve it. aleve is proven better on pain than tylenol. when pain happens, aleve it.
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then maybe the stores would have actually made more money. john: so it's all my fault the stores didn't make as much money. if you would have done it... mike: no, if i would have helped. john: and i asked you to help me, you didn't do -- you say you want to avoid a con-- you're saying two separate things. mike: no, what i'm trying to say is -- no, john, come on. john: oh, my gosh, man. lemonis: i feel like both of you -- both have some responsibility in the store's failing. you both have responsibility in mistakes. he thinks you're lazy, and you think he's controlling. what does matter is that you guys lost one brother. it broke both of your hearts. it changed your business. you guys don't want to lose each other. get your [bleep] together and figure out how to co-exist and have mutual respect. because the last thing you want to do is wake up one day and have more regret, okay?
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mike: that's true. lemonis: all right. it's been a couple of weeks since we started construction on the seal beach location, and so i wanted to drop in and see how much progress they're making. hi, how are you? you guys excited about the new space? amy: yeah. lemonis: then you guys will each have your own room. you don't have to be bunkmates. jackie: yeah. lemonis: anything happen since i was here? amy: yeah. jackie: well, after you guys were getting ready to head out, john turned around and told us, "you need to work harder to, like, earn your keep." amy: yeah. he just was feeling a little bit out of control, and so therefore, he is, like, micromanaging all of us and just really riding our asses. jackie: if i had another job opportunity, i would take it. lemonis: you would? jackie: yes. amy: same. lemonis: same thing for you? amy: mm-hmm. lemonis: does -- does he know that? jackie: no, because he's never asked. amy: no. no. lemonis: are you guys open to having a frank discussion with him about it? 'cause i won't do business here if he's that way. it's just not -- it's not okay. jackie: yeah.
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lemonis: so let me talk to them and see if we can just find a place to just have a quick chat, okay? jackie: cool. lemonis: thank you very much for being honest. look, my expectation is that employees are treated the right way all the time, whether i'm here or not. yo! john: hey. lemonis: hey, what? mike: almost -- almost there. john: so, as you can see, it's coming together. we're feeling really good about how it's looking, and then mike, he wanted to -- go ahead, mike, tell him about -- mike: well, i mean -- lemonis: mike, i just want you to know that john says it's okay for you to talk now. john: [ laughs ] lemonis: no, i'm serious, 'cause that's how it comes off. mike: so we want to do, like, a whitewash. the floor is being cleaned. john: we'll have it all figured out. we were actually able to sell a ton of our old, antiquey stuff. lemonis: there's a lot of junk. john. i talked to the ladies, and we need to -- we need to talk with them. john: okay, let's do it. lemonis: i really feel that in this moment, it isn't that john is a bad person or doesn't like his employees, but he doesn't know how to have awareness about
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how his actions or his words are affecting other people. to be clear, this open dialogue that we're gonna have is not gonna result in somebody getting blasted when i leave or tomorrow. so, i think we're all in agreement that we're not gonna do that anymore. and that the only way this is gonna work for me to be involved, honestly, because i'll walk away, is if there's a mutual respect amongst everybody. we're treating people with sincerity and respect. mike: the floor is yours. amy: you can tell, like, all the other times that he's been here, you're putting on a show. like, you're trying to just protect yourself, and you don't want to look like an idiot. john: amy -- lemonis: she's not done. john: okay, sorry. amy: she'll let you know when she's done. amy: i mean, i've never had a boss mock me to my face, behind my back, to other employees. it's so rude. like, it's just -- it's just mind-blowing sometimes.
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john: if there's something i'm not doing right, just tell me. there's a lot of changes, a lot of things happening, so it's a little different. i feel like you're just as -- we're all the same. we're all the same. jackie: i'd like to think that we're all the same, but i don't actually feel that. that's not how everybody is treated here. john: oh, okay. jackie: i feel like it could be a lot more professional. i feel like there could be more tact and more grace. aaron: i am kind of with amy where we can be a little bit more professional about some things that we do. little things like something that happened yesterday with a shirt color being off. instead of saying that they're being picky, it's -- john: but i did -- hold on. i did say if they don't like it, let's fix it. aaron: no, no, i -- john: i don't want half the story. i just want you to tell the whole story. aaron: sure. lemonis: john. you don't have to go on, like, full drive, bro. john: i'm the one getting, like, pummeled. lemonis: no, you're not. john: i feel i'm getting crapped on. amy: it's hard to get crapped on, too.
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lemonis: i feel like what you did is you took some of these and just changed the label. it feels like you rushed this.
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john: i don't want half the story. the army has been an awesome but after roman was born, i started transitioning out to spend more time with the family. i found this job as an area manager on linkedin. i applied, and i ended up getting the job. ♪ i can'twhat? ve it. that our new house is haunted by casper the friendly ghost? hey jill! hey kurt! movies? i'll get snacks! no, i can't believe how easy it was to save hundreds of dollars on our car insurance with geico. i got snacks! ohhh, i got popcorn,
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i got caramel corn, i got kettle corn. am i chewing too loud? believe it! geico could save you fifteen percent or more on car insurance. i just want you to tell the whole story. aaron: sure. lemonis: john. you don't have to go on, like, full drive, bro. john: i'm the one getting, like, pummeled. lemonis: no, you're not. john: i feel i'm getting crapped on, you know -- amy: it's hard to get crapped on, too. lemonis: john, when you're, you know, crusty, it throws us all off. it throws me off. that's all i'm asking is that we just have respect. john: i agree, all the way. so, jackie, i'm sorry for making you feel bad or making you feel like you didn't count. so, you count. i'm sorry. jackie: okay. thank you. john: i didn't mean to make you feel bad, and i'm excited to see what happens in the next few months. jackie: thank you. john: amy, i'm sorry. i truly from the bottom of my heart want you to feel respected,
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and i want you to know that i care for you. i am sorry, for real. are we good? amy: yeah, yeah. john: okay, okay. lemonis: we're good if the words turn into actions. john: totally. lemonis: and we know that this business is more than just a business for you. but we need to feel it. john: got it. lemonis: or we're not gonna work here, me included. john: okay. ♪ lemonis: while the team puts the final touches on the seal beach store, mike and john are heads down, designing new products and expanding their existing ones. john: that's nice. mike: that's kind of cool, and then -- lemonis: they were smart enough to use their father's screen printing shop. john: green looks really nice. rick: i told you to do the green. mike: that was dad's call. lemonis: it gives them flexibility and speed on delivery. meanwhile, i've been checking in with amy and jackie regularly, and i'm happy to hear that john, he's calmed down a bit. john: you have your own office. you've got a key. amy: awesome. thanks. john: yep. john: bye, girls. [ bird squawks ]
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john: ta-da! [ laughs ] mike: hey, marcus. good to see you. john: marcus. lemonis: how you doing, buddy? john: good. good to see you. lemonis: i think it looks spectacular. john: thank you. lemonis: good. it looks tight, and the best of the best of the best is here. john: yeah, exactly. lemonis: it looks good, guys. mike: thanks for pushing us 'cause that tape line -- john: this is literally where you put the tape. it was exactly right here. mike: that's where the tape was. lemonis: you can see that if i pushed you guys hard enough, this is what we ended up with. john: yeah. mike: this process, a lot is to ask people. john: candi did a phenomenal job for us. lemonis: the fact that you were even open to somebody else's idea is tremendous progress. john: yeah. lemonis: let's look inside. i see absolute perfect execution. now there's the proper meeting space, the proper design space,
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and any potential client that comes in knows that these guys are for real. john: good, better, best. lemonis: why don't you guys take me through as if i was buying? john: grit and gravel. all hand drawn, all custom. mike: the illustrations were done by our team, and graphic design was done by me. lemonis: the quality still feels good, though. john: yeah, nice. lemonis: for an $18 t-shirt, it's not bad. mike: exactly right. lemonis: so why don't you guys take me through the better? can i see a flannel? john: absolutely. lemonis: just a flannel. john: great hand. lemonis: the quality is fantastic. john: if you look at the buttons, it's like a natural twill liner. lemonis: who is the best model? john: the elevated brand, outsiders. that's the best. lemonis: they did a great job with the design and the choices of fabric. it was really spot-on, but there's one issue i'm noticing. so, i would give grit and gravel a 10 out of 10. john: awesome. lemonis: nailed it. i feel like the graphics are right. i feel like the price point's right, and i feel like the quality is right.
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i would say tankfarm, it feels the most complete. you could take this to market right now and be fine. john: totally. lemonis: and this outsiders, it feels like you're swinging for something. i don't know what it is. john: like better detailing. lemonis: i feel like what you did is you took some of these and just changed the label. like on this. didn't this used to be in the tankfarm? 'cause this was actually in the store when i first got here. john: this -- this used to be in tankfarm. lemonis: it feels like you rushed this. lemonis: it feels like you rushed this. i'm christina stembel and i chose the spark cash card from capital one with unlimited 2% cash back on everything i buy
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john: we upcycled it. lemonis: right, but it doesn't feel right to me. mike: it needs to be different enough. lemonis: or do something different. john: wash, a rivet, something cool. lemonis: something that makes it feel -- john: would it look cool with a leather label? that would definitely make it look more elevated. lemonis: right, but it's something that's, like, a signature thing. john: i like that. mike: there's work to be done. john: there's work to be done. we really tried to give this an overall theme, a look, a vibe. lemonis: look, i'm very happy with the progress. let's open the store and get people in here. john: yeah, please. mike: yeah, yeah. lemonis: i think the most important thing for me is that all of you together open the store. and are you mom? mary: i am.
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lemonis: you have good boys. mary: i do. thank you. lemonis: you have good boys. you should be very proud of them. mary: we are. lemonis: when we first did our deal, the two of them told me that it's a family business. as you can see, it's a family business. mike: now the family name's on the roof. lemonis: as a family, i think we should open this store up. mary: okay. candi: go for it. mary: wow. i love this. girl: that looks really good. mary: wow. rick: it looks cool, though. girl: he said small. lemonis: it's a lot smaller, right? rick: it's a lot smaller. lemonis: you want to give your parents a tour of the inside? mary: yeah, let's do it. lemonis: go, walker, first, go, walker. john: go, go, go. awesome. candi: doesn't it look good? rick: great design. mary: ooh, this is all your designs? john: this is an inspiration wall, so we have our three new brands. mary: that's awesome. john: outsiders. we have tankfarm, and we have grit and gravel. lemonis: doesn't it look nice? rick: this looks incredibly professional. lemonis: john and mike, i know that i gave you the task to come up with three brands.
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but i didn't want to task you guys with having to do the fourth. where it goes from here is gonna be up to you. john: oh. mike: that's cool. it's great. that's awesome. that's awesome. mary: it's beautiful. mike: that's awesome. beautiful, great job with that. it's awesome. candi: wow, that's so cool. mary: amazing. candi: i love it. let me see that one. lemonis: we want to have the fourth line be a t-shirt line called ricky's. rick: marcus, that's incredible. woman: [ sniffles ] lemonis: i was trying to come up with something that felt like a record label or something. rick: i love it. i love it. lemonis: his legacy will live forever. rick: he's here. he's here. mike: thank you, marcus, that's really cool. candi: thank you. [ applause ] lemonis: with the new product lines, this business should see at least a 50% increase over the next 12 to 24 months, but more importantly, john and mike seem to have really repaired their relationship. there's no question that they're a work in progress --
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john in particular. [ laughter ] but if they continue to listen to each other and respect their staff, with this business, the sky's the limit. ♪ lemonis: tonight on "the profit"... i've pretty much established that this whole thing sucks. at an iconic snowboard-and-skate shop in chicago... chris: in the summertime we do skateboards, stand-up paddleboards. lemonis: ...the owners are headed a nasty collision. this business looks like it's on life support. chris: i think things kind of fell apart pretty quickly up here. lemonis: their new location loses money hand over fist. there's nobody here. it's empty. their original location suffers from low margins and the wrong inventory. salena: it's about creating a reputation. lemonis: this business doesn't have a good reputation. did you know that? and now, their partnership is spinning out of control with two of the owners sidelining the third. chris: it felt like we financed your pregnancy


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