The Profit (2013) s02e10 Episode Script
Artistic Stitch
1 Lemonis: TONIGHT, ON "THE PROFIT" I VISIT ARTISTIC STITCH IN QUEENS, NEW YORK, AN EMBROIDERY AND SILK-SCREENING BUSINESS PLAGUED BY AN IDENTITY CRISIS.
Sal: IT'S A MULTIPLEX OF BUSINESSES THAT REALLY WORK TOGETHER.
Lemonis: THAT'S WHAT'S CALLED A "MALL.
" Lemonis: DELUSIONS OF GRANDEUR COMPELLED THE OWNER TO BUILD OUT HIS ENTIRE FACILITY WITH WHATEVER HE COULD THINK OF.
Sal: THIS IS THE RESTAURANT.
THIS IS THE SPORTS COMPLEX.
THIS IS OUR BASEBALL FACILITY.
Lemonis: IS IT PROFITABLE? Sal: NO.
Lemonis: IF I CAN'T FIGURE OUT A WAY TO BRING THIS COMPANY BACK TO ITS ORIGINAL ROOTS, ARTISTIC STITCH WILL CLOSE ITS DOORS FOREVER.
THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Lemonis: MY NAME IS MARCUS LEMONIS, AND I FIX FAILING BUSINESSES.
Lemonis: IF YOU DON'T LIKE MONEY, DON'T FOLLOW MY PROCESS.
Lemonis: I MAKE THE TOUGH DECISIONS.
Lemonis: WE'RE CLOSING THE STORE.
WE'RE DONE.
I'M NO TALKING ABOUT IT ANYMORE.
Lemonis: I BACK THEM UP, SPENDING MY OWN MONEY.
IT'S NOT ALWAYS PRETTY Man: PERFECT FLAVOR.
Lemonis: BUT THIS IS BUSINESS.
Lemonis: YOU GOT TO TRUST THE PROCESS.
Lemonis: I DO IT TO SAVE JOBS, AND I DO IT TO MAKE MONEY.
Lemonis: THANKS FOR YOUR BUSINESS.
Lemonis: THIS IS "THE PROFIT.
" QUEENS, NEW YORK, IS A DENSE AND DIVERSE WORLD OF CULTURES AND BUSINESSES.
AND IT'S HOME TO ARTISTIC STITCH, AN EMBROIDERY AND SILK-SCREENING BUSINESS RUN BY SAL LORETTA AND NICK MEOLA.
THE COMPANY STARTED 18 YEARS AGO IN SAL'S GARAGE.
-Sal: WHERE WE AT WITH THIS JOB? -Fabio: IT'LL BE DONE TODAY.
Lemonis: TODAY, IT'S BECOME A $2-MILLION-A-YEAR BUSINESS, THE BULK OF THAT REVENUE COMING FROM UNIFORMS, HATS, AND CUSTOM SHIRTS.
Fabio: HEY, THAT'S ONE DOWN.
HERE WE GO.
HERE WE GO.
Lemonis: TWO YEARS AGO, SAL AND NICK DECIDED TO MOVE THEIR BUSINESS INTO A 28,000-SQUARE-FOO WAREHOUSE.
SAL BUILT OUT THE SPACE USING HIS SAVINGS.
Sal: I PUT IN A HALF A MILLION DOLLARS OF LIQUID CASH.
Lemonis: AND TO INCREASE REVENUE, HE DECIDED TO STAR A FEW NEW BUSINESSES.
Sal: I FELT IT WAS A PRETTY UNIQUE CONCEPT THAT I HAD.
Lemonis: NOW HE HAS A RESTAURANT, A SIGN COMPANY, AND A SPORTS COMPLEX WITH BASKETBALL COURTS AND BATTING CAGES.
BUT THE NEW BUSINESSES HAVE STRUGGLED, AND THE NEW BUILDING AND ITS REMODEL HAS THE COMPANY $1.
5 MILLION IN DEBT.
Sal: I GOT TO TAKE FROM PAUL TO PAY PETER AND MOVE THIS DOWN HERE AND KIND OF FINAGLE EVERYTHING.
Lemonis: I KNOW THAT EMBROIDERY AND SILK SCREENING HAS HIGH MARGINS, BUT IF SAL AND NICK CAN'T FIND A WAY TO PAY DOWN THEIR DEBT, THIS COMPANY WILL BECOME UNSTITCHED.
WHEN I GO INTO ARTISTIC STITCH, I SEE RACKS OF CLOTHING, BUT BEHIND THE RACKS OF CLOTHING, I SEE BASKETBALL COURTS.
AND I LOOK TO THE RIGHT, AND I SEE AN ITALIAN RESTAURANT.
I FEEL LIKE I'VE JUST ENTERED THE WORLD'S WEIRDEST MINI-MALL.
I THOUGHT I WAS COMING TO AN EMBROIDERY AND SILK-SCREENING BUSINESS.
THEIR PRIMARY BUSINESS LOOKS LIKE IT'S SHOVED IN THE CORNER.
IT'S AN UNUSUAL SETUP, TO SAY THE LEAST.
HOW ARE YOU DOING? I'M MARCUS.
Fabio: HOW ARE YOU DOING, MARCUS? FABIO.
Lemonis: HEY, NICE TO MEET YOU.
-YOU GUYS DOING A BIG JOB? -Fabio: WE GOT JOBS.
Lemonis: THAT'S REALLY GOOD.
Fabio: IT'S AMAZING.
LIKE, THESE MACHINES ARE REALLY AMAZING.
Lemonis: HOW LONG HAVE YOU BEEN DOING THIS? Fabio: 18 YEARS.
FROM DAY 1, WE WORKED OUT OF THE GARAGE.
Lemonis: ARE YOU A ONE-MAN BAND IN HERE? Fabio: I AM.
I AM.
IF I'M NOT HERE, THIS DOESN'T RUN.
SOMETIMES IT DOES GE A LITTLE -- IT'S OVERWHELMING.
Sal: HI, MARCUS.
SAL LORETTA.
HOW ARE YOU? -Lemonis: NICE TO MEET YOU.
-Sal: NICE TO MEET YOU.
I'M ONE OF THE OWNERS HERE.
HOW ARE YOU DOING? Lemonis: GOOD.
I WAS JUS GETTING TO MEET FABIO.
Sal: FABIO'S BEEN WITH ME A LONG TIME, SO HE'S A -- MY BROTHER-IN-LAW.
I STARTED THE BUSINESS WHEN I WAS 17 YEARS OLD IN MY GARAGE, AND IT JUST EXPLODED.
AND LOOK AT THIS.
I MEAN Lemonis: SO IT'S BEEN A VERY PROFITABLE YEAR SO FAR? Sal: YEAH.
I MEAN, WHEN I MEAN "PROFITABLE," THE BUSINESSES DO WELL.
THE ONLY PROBLEM IS THE DEBT.
THIS PLACE TOOK A LOT OF MONEY TO BUILD.
Lemonis: HOW MUCH DEBT'S ON THE BOOKS? Sal: ABOUT $1.
5 MILLION.
WE COULDN' PAY THE CONTRACTORS, AND WE WOULD HAVE TO USE CREDIT CARDS.
THERE WAS NO FINANCING HERE.
YOU GO TO THE BANK, AND THEY SAY, "WHAT ARE YOU BUILDING? A SPORTS COMPLEX, EMBROIDERY? SAL, WHAT THE HELL IS GOING ON OVER THERE?" FLAT-OUT NO.
"TOO RISKY.
" Lemonis: FABIO, HOW DO YOU DESCRIBE THE BUSINESS TO PEOPLE? Fabio: HMM.
THE BUSINESS ITSELF, IT'S COMPLICATED.
THERE IS A LO GOING ON IN HERE.
IT'S HARD TO REALLY JUST PUT I ALL IN A NUTSHELL REALLY QUICK.
Sal: IT'S A MULTIPLEX OF BUSINESSES THAT REALLY WORK TOGETHER.
YOU GET SOMEBODY COMING IN THAT WANTS TO DO SHIRTS.
HE LOOKS RIGHT OUT TO THAT THING.
NOW, ON A FRIDAY AND SATURDAY NIGHT, HE'S COMING IN WITH HIS FAMILY AND HIS KIDS, AND HE'S GONNA ACTUALLY EA IN THE RESTAURANT.
Lemonis: AND SO THE FAMILY COMES IN AND THEY EAT DINNER, AND THEY REALIZE THA THEY HAVE A PROBLEM WITH THEIR SINK AT HOME.
WHAT DO YOU KNOW? THERE'S A PLUMBER HERE, AS WELL.
Lemonis: AND BY THE WAY, THAT'S WHAT'S CALLED A "MALL.
" IT'S NOT REALLY AS CLEAN A VERTICAL INTEGRATION AS IT COULD BE.
VERTICAL INTEGRATION IS GROWING A BUSINESS ON A COMMON PLATFORM.
FOR EXAMPLE, AN AUTO DEALERSHIP -- NOT ONLY DO YOU BUY THE CAR THERE, BUT YOU SERVICE IT, YOU BUY PARTS, YOU GET FINANCING, YOU GET INSURANCE.
THEY ALL CENTER AROUND THE SAME THING.
EMBROIDERY AND SILK SCREENING HAS NOTHING TO DO WITH BATTING CAGES.
-CAN I GET A TOUR? -Sal: YEAH, ABSOLUTELY.
SO, THIS IS THE PRODUCTION PAR OF THE FACILITY.
-Lemonis: FOR SCREENING? -Sal: FOR SCREENING.
Lemonis: HOW EXPENSIVE ARE THESE MACHINES? Sal: THAT MACHINE THERE IS $55,000 TO $60,000.
-Lemonis: IT'S A NICE SPACE.
-Sal: THANK YOU.
THIS IS THE SIGN SHOP.
THIS IS NICK, MY PARTNER.
-Lemonis: HI, NICK.
I'M MARCUS.
-Nick: PLEASURE.
HOW ARE YOU? Lemonis: SO, YOU GUYS ARE PARTNERS IN THE WHOLE PLACE? Sal: Lemonis: HOW DO YOU GUYS SPLIT YOUR PARTNERSHIP DUTIES? WHO DOES WHAT? Nick: HE DOES BASICALLY ALL THE DAY-TO-DAY OPERATIONS, AND I DO THE SALES PART.
-Lemonis: YOU'RE THE PITCHMAN? -Nick: YES.
SALES IS SOMETHING THAT I LOVE TO DO.
I LOVE TALKING WITH PEOPLE AND STUFF.
Lemonis: OKAY.
AND SO HOW MUCH REVENUE WILL THIS PARTICULAR PAR OF THE BUSINESS DO A YEAR? Sal: THIS DID $170,000.
Lemonis: AND HOW MUCH BUSINESS DID THE EMBROIDERY DO? Sal: $1.
3 MILLION.
BUT THAT'S ALL EMBROIDERY AND SILK SCREEN COMBINED.
Lemonis: AND THE MARGINS ON THE TWO OF THEM ARE? Sal: 75%.
Lemonis: AND SO ALMOST $900,000 IN GROSS PROFIT? Sal: GROSS PROFITS, YEAH.
Lemonis: THAT'S A LOT OF GROSS.
-LET'S FINISH THE TOUR, OKAY? -Sal: YES.
-Lemonis: NICE MEETING YOU, SIR.
-Nick: NICE TO MEET YOU.
WE'LL SEE YOU.
Sal: SO, THIS IS THE RESTAURANT.
I WANTED SORT OF A UNIQUE FEEL TO IT.
Lemonis: WHAT KIND OF REVENUE WILL THE RESTAURANT DO? Sal: LAST YEAR, ABOUT $300,000.
Lemonis: LESS THAN $1,000 A DAY IN SALES? -Sal: YES.
-Lemonis: THAT'S TOUGH.
Lemonis: IT'S LUNCHTIME AND THERE'S NOBODY IN THIS RESTAURANT, BUT QUITE FRANKLY, I'M NOT THAT SURPRISED.
WHO WANTS TO SIT HERE AND WATCH KIDS PLAY BASKETBALL AND PAY FOR FINE DINING? Sal: SO, THIS IS OUR BASEBALL FACILITY.
Lemonis: SO, HOW MUCH REVENUE ACTUALLY COMES FROM THE SPORTS COMPLEX? Sal: ANYWHERE FROM $350,000 TO $400,000 A YEAR.
-Lemonis: SALES, NOT PROFIT? -Sal: SALES, CORRECT.
Lemonis: SO, HOW CAN YOU BREAK THAT DOWN FOR ME? HOW MUCH DOES BASEBALL GENERATE? Sal: BETWEEN $300,000 AND $325,000.
Lemonis: IS IT PROFITABLE? Sal: NO.
NO.
Lemonis: OKAY.
AND HOW ABOU THE BASKETBALL UPSTAIRS? Sal: SALES UP TO THIS DATE, I WOULD PROBABLY SAY ABOUT $10,000.
Lemonis: I SEE HOW BUSY THE EMBROIDERY ROOM IS, I SEE HOW BUSY THE SILK SCREENING IS.
Sal: MM-HMM.
Lemonis: WHY ARE YOU INVESTING IN THIS STUFF? THE PRINCIPLE BUSINESS HAS TO BE "WHAT AM I?" AND RIGHT NOW, IT FEELS LIKE AN IDENTITY CRISIS.
AFTER HEARING THAT THE EMBROIDERY AND SILK-SCREENING BUSINESS DOES $1.
3 MILLION A YEAR IN SALES AND GENERATES $900,000 IN GROSS PROFIT, 75% MARGINS, AND THE RESTAURANT, THE BATTING CAGES, THE BASKETBALL COUR DON'T EVEN EQUAL HALF OF THAT IN REVENUE, WHY WOULD YOU WASTE YOUR TIME WITH ANYTHING ELSE OTHER THAN EXPANDING AND GROWING YOUR EMBROIDERY AND YOUR SILK-SCREENING BUSINESS? HOW MUCH IS THE RENT HERE A MONTH? Sal: CURRENTLY $13,000, PLUS WITH THE REAL-ESTATE TAX, ANOTHER $4,000, SO ABOUT $17,000 A MONTH.
Lemonis: WHOA.
Sal: IT'S A BIG FACILITY, THOUGH.
Lemonis: RIGHT, BUT YOU BUILT IT OUT, AND SO YOU PAID $17,000 ESSENTIALLY FOR A GROUND AND AN EMPTY BUILDING LEASE.
Sal: YEAH.
I MADE MY BED, AND I GOT TO DEAL WITH IT.
Lemonis: I'M GONNA WALK AROUND AND TALK TO SOME OTHER PEOPLE.
I'LL SEE YOU IN A LITTLE BIT, OKAY? YOU KNOW, AS I SPOKE TO ALL THE PEOPLE THAT WORK IN THE COMPANY, I CAN TELL THAT THEY WERE REALLY FEELING THE PRESSURE, ESPECIALLY SAL'S WIFE, JOANNE, WHO RUNS THE SPORTS COMPLEX.
Joanne: EVERYTHING WE EVER WORKED FOR AND, YOU KNOW, SAVED FOR IS ALL HERE.
Lemonis: DESPITE ALL THE PROBLEMS, THERE ARE SOME REALLY DEDICATED PEOPLE THAT WILL DO ANYTHING TO MAKE SURE THIS PLACE SURVIVES.
Fabio: I DO WHAT I GOT TO DO.
LIKE, I'LL PUT THIS IN FRONT OF MY -- SOMETIMES, MY WIFE WILL SAY, LIKE, "WHAT ARE YOU DOING? YOU GOT A FAMILY.
RELAX.
DON'T RUN OVER THERE.
" BUT I DO IT BECAUSE I KNOW HOW IT IS RIGHT NOW.
IT'S HARD FOR HIM, AND I WANT TO KEEP THIS GOING.
Lemonis: AND WHILE THEIR HEAR MAY BE IN THE RIGHT PLACE, ALL TOO OFTEN, THEY WERE VERY FOGGY ON THE CRITICAL DETAILS.
HOW MUCH MONEY DOES THIS BUSINESS MAKE A YEAR? Nick: I MEAN, AS FAR AS THAT, I'LL BE HONEST -- I DON'T KNOW THE EXACT NUMBERS OF THAT.
Lemonis: EVEN THOUGH YOU'RE A 50% PARTNER? Nick: YEAH.
Fabio: ONLY THREE WITH LOGOS, RIGHT? ONE OF THEM WITH NO LOGOS? ALL RIGHT.
Lemonis: HOW ARE YOU? I'M MARCUS.
-Giovanna: GIOVANNA.
-Lemonis: NICE TO MEET YOU.
ARE YOU RESPONSIBLE FOR THE BOOKS? Giovanna: YES, I AM.
Lemonis: AND SO IS IT POSSIBLE TO GET A BALANCE SHEET AND PnL? Giovanna: YES.
Lemonis: IF I CAN GET THAT, THAT WOULD BE GREAT.
I'M IMPRESSED BY THE FAC THAT EMBROIDERY, SILK SCREENING, AND SIGNS GENERATES $900,000 IN GROSS PROFIT.
BUT I NEED TO DIG INTO THE FINANCIALS SO I CAN FIGURE OU HOW IT IS THAT THEY'RE NOT ABLE TO PAY DOWN THEIR DEBT.
WHEN YOU ADD UP ALL THE BUSINESSES TOGETHER, DO THEY MAKE MONEY COLLECTIVELY? Giovanna: YES.
Lemonis: OKAY.
Giovanna: THE MOST MONEY WOULD BE THE EMBROIDERY AND THE SILK SCREENING.
Lemonis: TOTAL REVENUE -- $1.
3 MILLION.
EXPENSES.
WAGES AND SALARIES AT $276,000.
EQUIPMENT LEASE, ARTISTIC STITCH -- $3,500 A MONTH, $3,400 A MONTH.
EVEN THOUGH THEY GENERATE $900,000 OF GROSS PROFI IN THEIR EMBROIDERY AND SILK-SCREENING BUSINESS, AFTER YOU FACTOR IN OPERATING EXPENSES ON ALL THE OTHER BUSINESSES, IT LOOKS LIKE THE ACTUAL PROFITABILITY OF THE BUSINESS IS AROUND $100,000.
HOW MUCH TOTAL DEB IS ON THE BUSINESS? YOU TOLD ME THERE WAS $1.
5 MILLION.
HOW MUCH IS THE DEB TO OUTSIDERS -- PEOPLE OTHER THAN THE OWNER OF THE BUSINESS? OUTSTANDING CONSTRUCTION BILLS WHICH HASN'T BEEN PAID.
REAL-ESTATE TAXES -- YOU'RE PAST DUE ON THOSE? Sal: YEAH.
-Lemonis: HOW MUCH? -Sal: $52,000.
Lemonis: AND SO, BETWEEN CREDIT CARDS, THE CONSTRUCTION BILLS THAT HAVEN'T BEEN PAID, AND THE REAL-ESTATE TAXES, THERE'S $660,000.
SO, MADE MONEY ON PAPER, BUT ONCE YOU SERVICE THE INTERES AND THE PRINCIPLE PAYMENTS ON ALL OF THIS DEBT, -IT'S CASH-FLOW NEGATIVE.
-Giovanna: CORRECT.
Lemonis: THE CURRENT PRINCIPLE AND INTEREST PAYMENTS ON THE DEB ARE $240,000 A YEAR, BUT THE FINAL PROFI IS ONLY $100,000, LEAVING THEM $140,000 SHORT, AND THERE'S NOWHERE TO GET THE MONEY FROM.
WHAT HAVE YOU SACRIFICED TO THIS POINT, SAL, TO KIND OF KEEP THE DOORS OPEN? Sal: IT'S BEEN A LOT.
MY WIFE, SHE CALLS ME.
"SAL, THIS IS THE SECOND ELECTRIC BILL.
WHAT ARE WE GONNA DO?" THIS IS AT THE HOUSE.
I SAID, "JUST DON'T PAY IT.
" SHE COMES HOME.
SHE SEES A RED STICKER ON THE DOOR.
"WE'RE GONNA SHUT THE ELECTRIC.
" EVERY MONTH, THAT $400, $500, WAS ONE MORE PERSON THAT I COULD PAY, AND I DIDN'T WAN TO JEOPARDIZE MY EMPLOYEES.
"DON'T WORRY ABOUT ME," I SAY.
"LET'S JUS KEEP THIS PLACE GOING.
"THAT'S IT.
LET'S PAY EVERYBODY.
"EVERYBODY HAS MORTGAGES, EVERYBODY GOT BILLS.
"YOU KNOW WHAT? WHATEVER I CAN DO, I'M GONNA SACRIFICE.
" [ SIGHS .]
I DIDN'T WANT NOBODY TO, AT THE END OF THE DAY, FEEL UNCOMFORTABLE AND JUMP SHIP.
IT'S CRAZY.
[ SNIFFLES .]
Lemonis: HOW MANY WEEKS AWAY DO YOU THINK YOU ARE FROM TELLING THE EMPLOYEES THEY'VE LOST THEIR JOBS? Sal: ABOUT ONE MONTH.
Lemonis: YOU KNOW, THE CHARACTER OF A BUSINESSMAN ISN'T DEFINED BY HIS BANK ACCOUNT.
IT'S DEFINED BY WHAT HE'S WILLING TO DO FOR HIS PEOPLE.
YOU KNOW, YOU'VE MADE A LOT OF PERSONAL SACRIFICES SO THA THE TEAM CAN BE HERE.
YOU DO HAVE SOMETHING TO BE PROUD OF.
-HOW ARE YOU GUYS DOING? -Sal: GOOD.
Lemonis: WELL WHAT'S THE PARTNERSHIP LIKE BETWEEN YOU GUYS? Sal: WELL, WE'VE BEEN PARTNERS FOR 18 YEARS.
Lemonis: WHAT'S THAT PIECE OF PAPER RIGHT THERE, NICK? Nick: THIS IS THE SHAREHOLDERS CONTRAC THAT HAS ME AND SAL Lemonis: YOU GUYS ARE JUST Sal: WELL, I HAVEN'T SEEN THIS YET.
Lemonis: AFTER 18 YEARS, YOU GUYS DON'T HAVE AN AGREEMENT BETWEEN YOU GUYS? Sal: NO.
Nick: I MEAN, YOU'RE RIGHT.
THIS SHOULD'VE BEEN PROBABLY DONE A LONG TIME AGO.
Lemonis: IT FEELS LIKE HE WANTS TO GET EVERYTHING RIGHT AS OF YESTERDAY, WHICH IS WHA THIS IS DATED.
WHO OWNS Sal: IT'S 50/50.
Lemonis: NOTHING'S SIGNED.
Sal: AS WE GREW, WE GREW TOGETHER.
IT GIVES HIM INTEREST, IT GIVES ME INTEREST.
Nick: A LOT OF ARTISTIC STITCH IS WHERE IT IS 'CAUSE OF MY SALES.
Sal: WE'RE TOGETHER ON THIS.
WE'VE BEEN TOGETHER AND WE'RE GONNA CONTINUE TO BE TOGETHER ON ALL THIS, SO Lemonis: WELL, WHY DON'T YOU GUYS TELL ME HOW MUCH MONEY YOU WANT FROM ME AND WHAT IT IS THAT I'LL GET FOR IT? Sal: [ SIGHS .]
WIPING OUT THE DEBT -- OBVIOUSLY, THAT'S THE BIGGEST PROBLEM RIGHT NOW.
Lemonis: SO, WHAT DOES ALL THAT TOTAL? $660,000? Nick: YEAH, I MEAN, THAT'S WHAT -- SOMEWHERE AROUND SIX.
Lemonis: ALL THESE CONTRACTORS -- $300,000? HAVE THEY PUT A LIEN ON THE BUILDING YET? Sal: NO.
Lemonis: BUT THEY HAVE THE RIGHT TO? Sal: RIGHT.
ABSOLUTELY.
Lemonis: WHY DID YOU THINK THIS BUILDING, AGAIN, WAS A GOOD IDEA? Sal: I THINK, THE OPTIONS THAT I HAD, WHAT I NEGOTIATED WAS PRETTY STRONG.
Lemonis: THE OPTION THAT YOU HAVE TO BUY THE BUILDING FIVE YEARS FROM NOW -IS $2.
5 MILLION.
-Sal: CORRECT.
IT'S OBVIOUSLY WORTH A LOT MORE MONEY NOW.
Lemonis: HOW MUCH IS IT WORTH? Sal: $4 MILLION TO $5 MILLION RANGE.
-Lemonis: OH, REALLY? -Sal: YEAH.
Lemonis: SO, THAT'S REALLY THE BUSINESS PLAY, IS THE BUILDING, ISN'T IT? Sal: YEAH.
I MEAN, THE BUILDING IS -- Lemonis: 'CAUSE THERE'S NO WAY THAT YOU ACTUALLY THOUGH THAT PUTTING MEATBALLS AND BASKETBALLS AND BASEBALLS AND EMBROIDERY AND SILK SCREENING AND SIGNING WAS ACTUALLY A GOOD BUSINESS IDEA.
YOU LIKED THE REAL-ESTATE PLAY.
Sal: WELL, THE REAL-ESTATE PLAY IS ALWAYS -- Lemonis: BUT THIS IS A REAL-ESTATE PLAY? Sal: YEAH.
Lemonis: THE REAL-ESTATE PLAY IS SAL WORKING TO KEEP THE BUSINESS ALIVE LONG ENOUGH SO THAT HE CAN HAVE THE OPTION TO BUY THE BUILDING AT OR BELOW MARKET.
IF HE IS SUCCESSFUL AND ABLE TO TURN THE BUILDING AROUND, HE COULD STAND TO MAKE MILLIONS.
SO, REALLY, IF YOU CAN FIGURE OU TO KEEP THIS BUSINESS OPEN WITH SOMEBODY ELSE'S MONEY Sal: RIGHT.
Lemonis: THAT WHEN -- YOU SAID "RIGHT," RIGHT? Sal: THE POINT I'M TRYING TO MAKE -- Lemonis: YOU SAID "RIGHT," DIDN'T YOU? Sal: FOR ME -- Lemonis: YOU THINK THAT'S FUNNY, DON'T YOU? 'CAUSE I THINK IT'S FUNNY.
Nick: I MEAN Lemonis: HE DOESN'T REALIZE WHAT HE JUST SAID TO ME.
Sal: BY PUTTING CAPITAL INTO THE BUSINESS, IT'S GONNA STABILIZE THE BUSINESS.
Lemonis: WELL, THE BUSINESS SHOULDN'T BE BURDENED WITH ALL THIS DEBT.
Sal: RIGHT.
THAT'S WHAT I'M SAYING.
Lemonis: THIS DEBT IS YOU GUYS PLAYING HIGH-STAKES POKER WITH CHASE, CITIBANK, DISCOVER SO THAT YOU CAN HAVE A RIGHT TO BUY A BUILDING THA YOU DON'T OWN AND CAN'T AFFORD THAT SOMEBODY ELSE WILL FINANCE FOR YOU.
AND IF, FIVE YEARS FROM NOW, BUSINESS ISN'T DOING WELL, WHETHER YOU'LL ADMIT IT OR NOT, YOU DON'T REALLY CARE BECAUSE YOU CAN JUST SELL THE BUILDING AND MAKE YOURSELF A COUPLE MILLION DOLLARS.
I HAVE TO TELL YOU WHY I'M UNCOMFORTABLE RIGHT NOW -- YOU NEVER TOLD ME THIS WAS A REAL-ESTATE PLAY.
Sal: I DON'T THINK -- I DON'T KNOW WHERE YOU'RE COMING UP THAT IT'S A REAL-ESTATE PLAY.
Lemonis: THIS IS WHA YOU JUST ADMITTED TO ME -- TO KEEP THE BUSINESS ALIVE SO THAT YOU CAN GET TO THIS POINT.
I THINK THE CHALLENGE THAT I HAVE, GUYS, IS THAT MY MISSION IS TO INVES IN SMALL BUSINESSES, NOT REAL-ESTATE COMPANIES.
I JUST DON'T THINK IT'S SOMETHING THA I'M INTERESTED IN.
Lemonis: YOU NEVER TOLD ME THIS WAS A REAL-ESTATE PLAY.
MY MISSION IS TO INVES IN SMALL BUSINESSES, NOT REAL-ESTATE COMPANIES.
I JUST DON'T THINK IT'S SOMETHING THA I'M INTERESTED IN.
MY MAIN FOCUS IS MAKING SURE THAT THIS PLACE STAYS OPEN, THAT THESE EMPLOYEES GET THEIR PAYCHECKS, AND THAT THE BUSINESS IS SUCCESSFUL.
SAL THOUGHT I WOULD FUND THE BUSINESS TO KEEP IT GOING WHILE HE KEPT THE OPTION TO BUY THE BUILDING IN HIS BACK POCKET.
THAT AIN'T HAPPENING.
IN ORDER FOR ME TO MOVE FORWARD, I NEED TO KNOW THAT SAL IS EQUALLY COMMITTED TO FIXING THIS BUSINESS.
SO, MY OFFER IS $660,000 TO SATISFY THIS BURDENSOME DEB ON THE BUSINESS, AND I'LL HAVE I'LL HAVE FULL FINANCIAL CONTROL.
Sal: SO, HOW LONG ARE YOU PLANNING TO HOLD FINANCIAL CONTROL? Lemonis: FOREVER.
Sal: OH, BOY.
Lemonis: WHEN THE OPTION GETS EXERCISED, I'M THE FIRST PERSON TO GET MY MONEY OUT.
AND SO, WHAT'S THAT CALLED IS "LAST IN, FIRST OUT.
" Sal: I JUST DON'T THINK THAT'S FAIR.
IF THE BUILDING IS WORTH $6 MILLION Lemonis: I GET THE MONEY FIRST.
Nick: YOU GET THAT MONEY BACK, THE $660,000.
Sal: AND THEN, FROM WHAT I UNDERSTAND, HALF OF THE PROFITS OF THAT BUILDING BECOME YOURS.
Lemonis: HALF OF THE PROFITS OF EVERYTHING, INCLUDING THE SUCCESSFUL BUSINESS THAT WE'RE GONNA HAVE.
BUT IF IT'S SOMETHING THAT DOESN'T WORK FOR YOU, I UNDERSTAND.
WE DON'T HAVE TO DO IT.
Sal: LET'S JUST DO WHATEVER WE GOT TO DO, AND LET'S JUS GET IT GOING.
LET'S JUST DO IT.
CAN I ASK YOU A QUESTION? I FEEL LIKE, OBVIOUSLY, THERE'S MONEY INVESTED -- THIS IS EQUITY THAT I PUT IN.
HOW DO I GET THIS MONEY BACK? Lemonis: IF YOU THINK YOU SHOULD HAVE MORE EQUITY IN THE BUSINESS OUT OF THE OTHER 50% BECAUSE YOU PUT MORE IN, WE CAN WORK IT OU RIGHT NOW.
SO, I'M GONNA HAVE 50%.
WHAT'S GONNA BE YOUR ALLOCATION? WE ARE GONNA FACTOR FABIO INTO THIS EQUATION, I CAN TELL YOU RIGHT NOW.
FOR ME, CUTTING FABIO IN THE DEAL IS A FORM OF INSURANCE.
HERE'S A GUY THAT'S RUNNING THE ONLY BUSINESS THAT'S MAKING ANY MONEY IN THIS PLACE -- THE EMBROIDERY AND THE SILK-SCREENING BUSINESS.
Sal: I BELIEVE HE SHOULD AT LEAST, MINIMUM, HAVE 10%.
Lemonis: ME TOO.
THERE'S FABIO FOR 10%.
THAT LEAVES 40%.
HOW ARE WE SPLITTING IT? -25&, 15%, AND 10%? -Sal: I THINK THAT'S FAIR.
Nick: I'M ONLY GETTING 5% MORE THAN FABIO.
FABIO'S -- I MEAN Lemonis: FABIO'S BEEN IN BUSINESS FOR HOW LONG WITH YOU GUYS? Sal: SINCE THE BEGINNING.
Lemonis: AND SO HE'S NOT ANY MORE OR LESS IMPORTANT THAN YOU ARE.
YOU'RE GETTING MORE THAN HIM, WHICH IS, I THINK -- -THIS IS GENEROUS.
-Nick: THAT'S FINE.
THAT'S FINE.
Lemonis: OKAY? SO THE MONEY WILL BE USED TO SATISFY THE TAXES TO THE LANDLORD, PAY THE CONTRACTORS, AND SATISFY THE CREDIT CARDS ASSOCIATED WITH BUILDING OU THE BUILDING.
DO WE HAVE A DEAL? Sal: WE HAVE A DEAL.
Lemonis: DO WE HAVE A DEAL? Nick: YES, WE DO HAVE A DEAL.
PHEW.
Sal: PHEW! IT'S A BURDEN AND PRESSURE OFF RIGHT NOW, AND I FEEL LIKE I CAN NOW CONCENTRATE ON THE BUSINESS AND NOT CONCENTRATE ON MY FINANCIAL DEBT IN THE COMPANY.
Lemonis: SO, FOR THOSE OF YOU WHO DON'T KNOW, I'VE MADE A DEAL TO MAKE AN INVESTMENT INTO THIS BUSINESS.
TODAY, THE COMPANY IS KIND OF A FINANCIAL MESS, AND SO THE DEAL THAT I MADE WAS TO PUT $660,000 INTO THE BUSINESS SO THAT WE CAN PAY OFF THE DEBT.
I WILL OWN 50% OF THE BUSINESS, AND I'LL BE 100% IN CHARGE.
SAL WILL BE MY PARTNER AT 25%, NICK WILL BE MY PARTNER AT 15%, AND GOING FORWARD, FABIO WILL HAVE 10% OF THE EQUITY.
[ APPLAUSE .]
Fabio: THANK YOU.
I REALLY DO APPRECIATE IT.
I ALWAYS KIND OF FELT LIKE I WAS A BIG PART OF THIS PLACE, SO IT FEELS VERY GOOD.
Lemonis: THE SALES ORGANIZATION HAS TO HAVE LEADERS, AND IF WE'RE NOT SELLING, WE'RE CLOSING.
WE ARE A SALES ORGANIZATION THAT'S GONNA GO BACK TO OUR ROOTS BY EMBROIDERING AND SILK SCREENING AND PRINTING WHATEVER IT IS THAT CUSTOMERS WANT.
WE CAN'T JUST MAKE I BY SELLING WHO WE HAVE TODAY.
WE NEED THE BIG CORPORATE ACCOUNTS.
THE BENEFI OF CORPORATE ACCOUNTS IS, THEY ORDER LARGER VOLUMES MORE OFTEN.
AND WHILE JOE'S PIZZA MAY ORDER 100 SHIRTS A YEAR, A LARGE CORPORATE ACCOUN LIKE AT& MAY ORDER 10,000 SHIRTS FOUR TIMES A YEAR, AND THAT'S A LOT OF BUSINESS.
WE'RE GONNA BE REPURPOSING THIS SPACE SO THAT WE CAN CAPITALIZE ON WHAT REALLY MAKES US MONEY HERE.
WE WILL NOT BE DISTRACTED BY THINGS THAT COST US MONEY AND THAT DISTRACT US FROM EXECUTING OUR PLAN.
Sal: I THINK ULTIMATELY, YOU KNOW, MY DECISION MAKING WASN'T PROPER.
I FEEL TERRIBLE THAT THEY HAVE TO SORT OF DEAL WITH MYHONESTLY, FOR THIS PAST TWO YEARS.
Woman: [ Voice breaking .]
I JUST -- I FEEL BAD FOR HIM.
AS MUCH AS WE ALL ARGUE WITH EACH OTHER, AND -- HE'S HELPED ME BEFORE.
HE'S ONE OF US.
Lemonis: SAL PUT A LOT ON THE LINE.
THIS IS A NEW DAY.
WE SHOULD BE HAPPY.
WE'RE GONNA MOVE FORWARD.
WE'RE GONNA KICK BUTT TOGETHER.
-EVERYBODY READY? -Fabio: LET'S GO.
Lemonis: OKAY.
LET'S GO.
LET'S GO TO WORK.
[ APPLAUSE .]
WHAT IS THE PROCESS TO ACTUALLY FIND NEW CUSTOMERS? THIS IS YOUR DEPARTMENT, RIGHT? Nick: YEAH.
THEY, UHWE GO -- WE USE THIS PROGRAM -- WELL, NOT PROGRAM.
IT'S yellowpages.
com.
WE GO ON TO THAT.
AND WE'RE STILL CALLING ON THE? Sal: YEAH, WE CALL SPECIFIC AREAS -- Nick: NO, I'M SAYING THE OTHER PROGRAM.
I MEAN, BASICALLY, THE BIGGES TOOL WE USE IS yellowpages.
com.
Lemonis: WHO ARE SOME OF THE BIGGER CLIENTS THAT WE HAVE? LIKE, WHO'S OUR BIGGEST CLIENT? Nick: I'M TRYING TO THINK.
Lemonis: THERE'S GOT TO BE ONE THAT YOU CAN SAY, "I KNOW IT'S BIG, AND I CAN COUNT ON THEM.
" Nick: I CAN'T THINK OF ONE RIGHT NOW.
Lemonis: NAME SOME.
JUST GIVE ME A FEW NAMES.
Nick: [ CHUCKLES .]
UH Lemonis: YOU PAY HIM HIS COMMISSION ON A MONTHLY BASIS, RIGHT? Nick: I JUST GET A SALARY.
Lemonis: WHETHER YOU SELL SOMETHING OR NOT? Nick: RIGHT.
Lemonis: WHERE'S FABIO AT? -Sal: HE'S DOWNSTAIRS.
-Nick: YEAH.
Lemonis: NICK, CAN YOU GET FABIO FOR ME? Nick: YEAH, YEAH, SURE.
Lemonis: NICK IS THE HEAD OF SALES, AND HE DOESN'T EVEN SEEM TO UNDERSTAND WHO HIS CLIENTS ARE.
MORE IMPORTANTLY, HE DOESN' EVEN SEEM TO KNOW HOW TO DRUM UP ANY NEW BUSINESS.
I MEAN, THIS IS A REAL PROBLEM.
THE QUESTION, FABIO, IS, WHO IS THE BIGGEST ACCOUN FOR THIS BUSINESS? Fabio: I ACTUALLY JUST HAD ONE THAT'S CALLED SKYLINE RESTORATION, WHICH IS A BUDDY OF MINE THAT -- SHIRTS, IT WAS ABOUT 8,000 TEES.
AND HE GAVE ME HIS OTHER COMPANY RECENTLY, WHICH IS ABOUT 500 SHIRTS, AND THE BUSINESS IS GONNA BUILD FROM THERE.
CON EDISON -- I HAVE BUDDIES THAT WORK FOR CON EDISON.
-Lemonis: THE ELECTRIC COMPANY? -Sal: YEAH, THE ELECTRIC.
Fabio: DELTA, ANOTHER ONE.
-Lemonis: SOMEBODY YOU KNEW? -Fabio: [ LAUGHS .]
IT ACTUALLY IS A GOOD FRIEND OF MINE.
Lemonis: MAYBE WE NEED TO HIRE SOME SALESPEOPLE.
Nick: WELL, I DON'T KNOW ABOUT THAT.
Lemonis: YOU CAN'T EVEN RATTLE OFF TO ME THE CUSTOMERS THAT YOU HAVE.
Nick: I HAVE A LOT OF RELATIONSHIPS WITH A LOT OF MY CUSTOMERS, AND THEY'LL RECOMMEND ME -- Lemonis: THE RELATIONSHIPS SEEM TO BE COMING FROM HIM.
Nick: NO, BUT I HAVE TONS OF RELATIONS, BUT THEY'RE NO BIG COMPANIES.
Lemonis: HAVE YOU EVER PITCHED TO ANY BIG CUSTOMERS? Nick: UH OFF THE TOP OF MY HEAD, NO.
Lemonis: SALES IN THIS COMPANY ARE EVERYTHING, AND AFTER SEEING THAT NICK DOESN'T REALLY EVEN KNOW WHO HIS CUSTOMERS ARE, I WANT TO SEE HIM IN ACTION.
I'M TAKING HIM TO A LOCAL BUSINESS TO SEE WHAT HIS SALES PITCH IS LIKE.
-GOOD MORNING.
-Jonah: GOOD MORNING.
-Lemonis: JONAH? -Jonah: YES.
HI.
Lemonis: I'M MARCUS.
HOW ARE YOU? Nick: HOW ARE YOU DOING? NICK MEOLA, ARTISTIC STITCH.
Jonah: HI.
Nick: IT'S NICE TO BE AT YOUR COMPANY TODAY.
Jonah: SO, WHAT CAN WE DO FOR YOU? Nick: WE'RE HERE TODAY -- WE'D LIKE TO SELL YOU SOME PRODUCTS FOR YOUR COMPANY.
Jonah: OKAY.
Nick: YEAH, IF YOU'RE INTERESTED, WE CAN SHOW YOU A FEW SAMPLES OF WHAT WE HAVE.
Lemonis: NICK DOESN'T UNDERSTAND THE BASICS OF SELLING.
THE FIRST THING YOU DO IS TRY TO CREATE SOME SOR OF COMMON GROUND WITH PEOPLE -- ASK THEM A LITTLE BIT ABOU THEMSELVES, BE A GOOD LISTENER.
Nick: THE MOST POPULAR GOLF SHIRT THAT WE CARRY IS A PIQUé POLO.
Lemonis: THE FIRST THING NICK DOES -- HE TAKES A SHIR OUT OF HIS BAG.
Nick: ONCE YOU CAN TELL ME EXACTLY THE QUANTITY THAT YOU'RE LOOKING FOR, THEN I CAN GIVE YOU A PRETTY STERN PRICE.
THE FIRST TIME, THERE'S A CHARGE TO DIGITIZE YOUR LOGO.
Lemonis: NICK'S WAY AHEAD OF HIMSELF HERE.
YOU DON'T BRING UP PRICE AS YOUR OPENING LINE.
YOU HAVE TO ESTABLISH A RAPPORT.
YOU HAVE TO UNDERSTAND WHAT THEIR NEEDS ARE, AND THEN YOU BRING UP THE PRICE.
ONE OF THE THINGS THAT WE WANTED TO COME AND TELL YOU IS THAT WE KNOW THAT THIS ISN'T A PRICE GAME.
WE DON'T WANT TO SELL JUST ON PRICE, RIGHT? Nick: YES.
SO, AT THE END, WE WANT YOU TO BE HAPPY, AND SO, I MEAN, IF -- I WOULD [ MUTTERS .]
I MEAN, IF WE CAN DO BUSINESS TOGETHER, YOU KNOW, I -- I JUST -- I CAN'T DO IT RIGHT NOW.
I JUST -- I'M -- I NEED TO -- I'M JUST I JUST -- I CAN'T CONCENTRATE.
I'M JUST A LITTLE NERVOUS.
[ BREATHES DEEPLY .]
Lemonis: I FEEL LIKE YOU'RE LYING TO ME ABOUT SOMETHING.
Sal: ALL RIGHT.
YOU KNOW WHAT? Lemonis: YOU TOLD ME THAT THIS WAS FOR CONSTRUCTION.
YOU LIED TO ME.
-Sal: I LIED TO YOU? -Lemonis: YEAH.
I MEAN, THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Nick: I WOULD LOVE TO HELP YOU GUYS OUT.
I MEAN, IF WE CAN DO BUSINESS TOGETHER, YOU KNOW, I -- I JUST -- I CAN'T DO IT RIGHT NOW.
I JUST -- I'M -- I NEED TO -- I'M JUST Lemonis: YOU WANT ME TO TAKE A CRACK AT IT? Nick: OKAY.
Lemonis: HE'S TOUGH, BUT I'LL GIVE IT A SHOT, OKAY? HOW LONG HAVE YOU BEEN IN BUSINESS HERE? Jonah: WELL, THE ORGANIZATION'S BEEN AROUND SINCE 1928.
Lemonis: WOW.
AND YOU'VE BEEN HERE THE WHOLE TIME? Jonah: NO.
[ LAUGHS .]
I'M NOT THAT OLD.
[ LAUGHS .]
NO, ACTUALLY, I'VE BEEN HERE FOR 40 YEARS.
Lemonis: WHAT'S INTERESTING IS, ARTISTIC'S BEEN AROUND FOR A LONG TIME, AS WELL, AND WE KNOW THAT THESE SHIRTS AND THESE HATS ARE COMMODITIES -- YOU CAN GET THEM ANYWHERE.
SO WE'RE GONNA MAKE SURE THAT THE PRICE IS RIGHT, BUT WE'RE GONNA SERVICE THE ACCOUNT.
WHEN I LOOK AT IT, I JUS LOOK AT A BASIC SWEATSHIRT.
I LOOK AT YOUR T-SHIRT, AND THIS IS KIND OF IN A SIMILAR LINE.
IS THIS QUALITY SOMETHING THAT MEETS YOUR STANDARDS? Jonah: THE PRODUCTS SEEM TO BE WELL-MADE.
Lemonis: AND IF WE END UP DOING BUSINESS TOGETHER, ARE THERE ANY OTHER FIREHOUSES THAT YOU HAVE RELATIONSHIPS WITH THAT YOU CAN INTRODUCE ME TO? Jonah: SURE CAN, AND THERE IS A ORGANIZATION CALLED THE FIREMEN'S ASSOCIATION WITHIN THE CITY OF NEW YORK.
Lemonis: HOW BIG IS THA ORGANIZATION? QUITE LARGE? Jonah: WE'RE TALKING ABOUT 200, 300 MEMBERS.
Lemonis: GOOD.
GOOD.
I APPRECIATE YOUR SUPPORT.
-Jonah: AND THANK YOU VERY MUCH.
-Lemonis: THANKS VERY MUCH.
HAVING A RELATIONSHIP WITH ONE SMALL BUSINESS IS GONNA LEAD TO HAVING A RELATIONSHIP WITH OTHER BUSINESSES.
NOT ONLY CAN NICK NOT TELL ME ANY OF THOSE ACCOUNTS, BUT HE DOESN'T LOOK LIKE HE KNOWS HOW TO FOSTER THEM, EITHER.
Nick: I'M NOT SAYING I DID GREAT, BUT I MEAN, WHEN I RELAXED, YOU KNOW Lemonis: I WOULD SAY IT WAS, UHNOT GOOD.
IT WAS NOT GOOD.
Nick: I WOULD HAVE TO AGREE WITH YOU ON THAT.
Sal: HEY, GUYS.
HOW WE DOING WITH THIS JOB? Fabio: WELL, IT'S COMING ALONG.
WE GOT IT STARTED NOW, SO WE SHOULD BE GOOD.
Sal: ALL RIGHT.
Lemonis: HEY, SAL.
LET ME GRAB YOU OUTSIDE FOR A MINUTE.
Sal: SURE.
Lemonis: AFTER SEEING NICK'S PERFORMANCE AT THE FIREHOUSE, OR LACK OF PERFORMANCE, I NEED TO TALK TO SAL ABOUT NICK.
HE'S MAKING OVER $100,000 A YEAR IN SALARY.
SOMETHING'S GONNA CHANGE.
I'M CONCERNED THAT THE GUY THAT'S LEADING THE SALES ORGANIZATION DOESN'T UNDERSTAND THE BASIC FUNDAMENTALS OF A SALES PRESENTATION, SO WE'RE GONNA HAVE TO MAKE SOME ADJUSTMENTS THERE.
Sal: OKAY.
ALL RIGHT.
-Lemonis: HEY.
-Nick: HI.
HOW ARE YOU? Lemonis: GOOD.
I THOUGHT MAYBE WE COULD CHAT FOR ONE MINUTE.
Nick: SURE, SURE.
-Lemonis: THE THREE OF US.
-Nick: YEAH.
Lemonis: UM YOU KNOW, THERE'S NO QUESTION THAT YOU PUT YOUR HEAR AND SOUL INTO WORKING Nick: RIGHT.
Lemonis:BUT I'M A BIG BELIEVER IN WORKING SMARTER, -NOT NECESSARILY HARDER.
-Nick: RIGHT.
Lemonis: AND IN THE PAST, YOU'VE BEEN COLLECTING A SALARY THAT REALLY ISN' CONNECTED TO WHAT YOU SELL -- IT'S WHETHER YOU SELL OR NOT, YOU COLLECT THE SALARY.
AND SO, WE NEED TO MOVE YOU ON TO A DIFFERENT PAY PLAN, SO I'M GONNA PUT YOU ON A 100% COMMISSION PLAN.
Nick: NO, I KNOW I CAN DO IT.
IT'S JUST ABOU REFINING MYSELF A LITTLE BIT.
Lemonis: AND WE'RE GONNA HELP YOU ALL ALONG THE WAY AND GIVE YOU ALL THE RESOURCES THAT YOU NEED.
-Lemonis: ALL RIGHT, THANK YOU.
-Nick: I REALLY APPRECIATE IT.
Lemonis: WALK ME THROUGH, FABIO, HOW YOU THINK THE LAYOUT SHOULD BE.
WHERE DOES THE PRODUCTION HAPPEN? Fabio: RIGHT HERE.
SMACK IN THE CENTER, IT'S GOT TO BE.
Lemonis: SO, THERE'S PRODUCTION.
I'M MAPPING OUT A PLAN TO EXPAND THE BUSINESSES THE PRODUCE REVENUE AND START TO ELIMINATE THE ONES THAT ARE CREATING DRAG.
SO I'M GONNA EXPAND THEIR SILK-SCREENING AND EMBROIDERY BUSINESS, AND NOT ONLY AM I GONNA INCREASE THEIR CORPORATE SALES, BUT I ALSO WAN TO CREATE A RETAIL SPACE WHERE PEOPLE CAN COME IN AND CREATE THEIR OWN CUSTOM SHIRTS AND HATS.
WHEN I THINK ABOUT THIS PLACE, I FEEL LIKE WE'RE UNDERUTILIZING THE ASSETS.
WE HAVE THE MACHINERY, WE HAVE THE SILK SCREENING, WE HAVE THE EMBROIDERY, AND WE HAVE THE FACILITY.
AND SO I'M GONNA TRY TO CREATE A BIT OF AN ARTIST SECTION HERE.
THINK HOW COOL THIS WILL BE -- ARTISTS WILL BE ABLE TO COME IN HERE AND DESIGN THEIR OWN CLOTHING.
BUT I WANT TO CREATE A RETAIL CLOTHING LINE, SO HATS, SWEATSHIRTS, HOODIES, BAGS, T-SHIRTS.
MAYBE HAVE I REPRESENT QUEENS.
SO I HAVE THIS IDEA FOR A NAME CALLED QUEENS VIBE.
Fabio: I LOVE IT.
-Lemonis: IT'S UP TO YOU.
-Fabio: YEAH, I GOT THIS.
-Lemonis: ALL RIGHT, BUDDY.
-Fabio: THANK YOU.
Lemonis: ONE OF THE THINGS THAT I WANTED TO DO -- AND I DON'T KNOW IF GIOVANNA CAN HELP US WITH THIS -- IS I WANTED TO SEE ON THAT LIST THAT YOU GAVE ME -THE CREDIT-CARD STATEMENTS -Giovanna: I CAN DO THAT.
Lemonis: BECAUSE WHEN I SEE TARGET, IT SAYS CONSTRUCTION.
I DON'T KNOW WHAT YOU'RE BUILDING FROM TARGET, SO I WANT TO SEE WHAT ACTUALLY WENT THROUGH THOSE CREDIT CARDS.
CAN YOU PRINT IT OUT? Giovanna: YEAH, I'M TRYING TO -- Lemonis: OKAY, LET ME GO GET IT.
HERE, COME HERE, GUYS.
SO, FOR EXAMPLE, SAL'S CREDIT CARD -- MERCHANDISE? Sal: THIS IS WHAT WE USE TO PAY FOR CLOTHING AND STUFF THAT'S IN HERE.
Lemonis: BUT YOU TOLD ME THE OTHER DAY IT WAS CONSTRUCTION DEBT.
-IT SAYS IT RIGHT HERE.
-Sal: UM Lemonis: JOANNE'S CREDIT CARD -- TARGET, CONSTRUCTION DEBT.
Sal: YEAH, WELL, I THINK THAT'S, YOU KNOW Lemonis: WHY WOULD TARGE BE CONSTRUCTION? Sal: NO, IT'S NOT.
IT'S HER LIVING EXPENSES THAT SHE WAS USING TO LIVE.
GOT TO GO BUY THE KIDS' CLOTHES, GOT TO GO TO THE SUPERMARKET Lemonis: LIKE A PERSONAL CREDIT CARD? Sal: YEAH.
Lemonis: AND SO WHY WOULD YOU LIST IT UNDER CONSTRUCTION? Sal: WELL, I DIDN' LIST THAT UNDER THAT.
Lemonis: WILLIAMS-SONOMA, SLATE, CITI SIMPLICITY, CITI CARD BANK.
THIS IS ALL CONSTRUCTION DEBT, AS WELL? Sal: UMI'M NOT SURE.
THAT I HAVE TO LOOK AT.
Lemonis: DO YOU HAVE ANY PERSONAL LIVING EXPENSES ON THESE CARDS? Sal: I'M SURE THERE IS.
WHAT'S THE BIG DEAL ABOUT THAT, HONESTLY? Lemonis: I AGREED TO $660,000 BASED ON WHAT YOU TOLD ME.
NOW I'M FINDING OUT, LIVING EXPENSES REALLY FOR THIS -- THE TARGET CARD REALLY WASN'T CONSTRUCTION, AND SO MY NUMBER REALLY SHOULDN'T BE $660,000.
Sal: I'M NOT 100% SURE WHAT -- THE CARDS ARE NOT EVEN ACTIVE.
Lemonis: BUT YOU WERE 100% SURE TO TELL ME THAT IT WAS CONSTRUCTION DEBT.
YOU PUT THIS PAPER TOGETHER.
Sal: YEAH, I MEAN, WE NEEDED COMPUTERS AND STUFF.
IT COULD BE.
I'M NOT SAYING NO.
Lemonis: WASABI JAPANESE STEAKHOUSE -- $230.
Sal: I WENT OUT WITH MY FAMILY.
Lemonis: ON THE COMPANY CREDIT CARD? Sal: ON THE COMPANY CREDIT CARD.
Lemonis: NOW I'M PAYING FOR YOUR MEALS? THIS ISN' SITTING WELL WITH ME.
AND I FEEL LIKE YOU'RE LYING TO ME ABOUT SOMETHING.
-Sal: I'M NOT.
-Lemonis: BUT I FEEL LIKE THA BECAUSE, LITTLE BY LITTLE, THE STORY KEEPS CHANGING.
NOW WOULD BE A GOOD TIME, RIGHT THIS MOMENT, TO GET EVERYTHING CLEARED UP ON THIS PAPER.
THIS IS THE RIGHT MOMEN RIGHT NOW BECAUSE IF NOT, I'M NOT GONNA LEAVE AND NEVER COME BACK.
Sal: ALL RIGHT, YOU KNOW WHAT? GUYS, COME ON.
IT'S -- I KNOW IT'S ALL FOR THE SHOW, BUT -- Lemonis: NO, IT'S NOT FOR THE SHOW, SAL.
Sal: UH, IT IS.
Lemonis: YOU TOLD ME THAT THIS WAS FOR CONSTRUCTION.
YOU LIED TO ME.
-Sal: I LIED TO YOU? -Lemonis: YEAH.
I MEAN, THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Lemonis: IF YOUR BUSINESS IS IN TROUBLE AND YOU NEED MY HELP, Lemonis: YOU TOLD ME THAT THIS WAS FOR CONSTRUCTION.
YOU LIED TO ME.
-Sal: I LIED TO YOU? -Lemonis: YEAH.
I MEAN, THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Lemonis: YOU TELL ME SOMETHING AND THEN YOUR STORY CHANGES, I HAVE A PROBLEM WITH IT.
IT HAS TO DO WITH INCONSISTENCIES IN YOUR NUMBERS.
-Sal: YOU'RE HELPING ME OUT -Lemonis: RIGHT.
Sal: WHICH, AT THE END OF THE DAY, I APPRECIATE THAT, AND IF THERE'S INCONSISTENCIES, I'LL BE MORE THAN HAPPY TO GO OVER THEM.
Lemonis: OKAY.
WHEN PEOPLE ARE BURIED IN DEBT, THEY SOMETIMES MAKE DECISIONS THAT THEY SHOULDN'T MAKE.
HE WAS DESPERATE, HE WAS IN A BAD PLACE.
YES, IT'S WRONG, BUT I'M MORE PISSED THAT HE LIED ABOUT IT.
I KNOW THAT YOU'VE BEEN IN A LOT OF FINANCIAL DURESS.
IF YOU WOULD'VE TOLD ME FROM THE BEGINNING, "IT'S REALLY NO CONSTRUCTION DEBT, I WAS TRYING TO SURVIVE," I WOULD GET IT.
I WOULD UNDERSTAND.
HONEST TO GOD, I WOULD UNDERSTAND.
YOU CANNO MISREPRESENT STUFF WITH ME.
Sal: OKAY.
Lemonis: FABIO, CAN I MEET THESE GUYS? HOW ARE YOU DOING? I'M MARCUS.
Man: HOW ARE YOU DOING? Lemonis: LOOK, QUEENS HAS A REALLY COOL, HIP VIBE.
THAT'S WHY I'M NAMING THE BRAND QUEENS VIBE.
BUT THE SPACE AND THE BUSINESS NEED TO REFLECT THAT BRAND.
DO YOU GUYS MIND SKETCHING OUT SOME IDEAS? Man: THAT'S COOL.
I DON'T MIND IT.
Lemonis: SO I HAD FABIO BRING IN THE BES GRAFFITI ARTISTS HE COULD FIND TO REALLY LIGHTEN UP THE PLACE AND MAKE IT FUN AND REFLECT QUEENS THE WAY IT REALLY SHOULD BE.
AND WHILE WE'RE STUCK WITH THIS $80,000 BASKETBALL COUR THAT'S MAKING NO MONEY, WE'RE GONNA MAKE THE BES WITH WHAT WE HAVE.
THIS IS GONNA BE WHERE THE CUSTOM PRINTING AREA IS.
THE KIDS OR INDIVIDUALS WILL DRAW WHAT THEY WANT.
THEY'LL COME HERE, IT'LL GET SCANNED IN, AND THEN IT'LL COME OUT RIGHT THERE.
I PURCHASED A DIRECT-TO-GARMEN PRINTER FOR $27,000.
I DID THIS SO THAT PEOPLE CAN COME IN AND DESIGN THEIR OWN PRODUCTS, WHETHER IT'S LOCAL ARTISTS WHO WANT TO STAR THEIR OWN CLOTHING LINE OR IT'S KIDS WHO JUST WAN TO COME IN AND HAVE SOME FUN.
Sal: I'M GONNA SET UP THE DESIGN CENTER RIGHT HERE.
Lemonis: OUR PRIMARY BUSINESS IS EMBROIDERY AND SILK SCREEN.
THAT'S WHERE WE MAKE THE BULK OF OUR MONEY.
BUT ALL OF THESE RECENT CHANGES GET US BACK TO OUR FOCUS.
Sal: LOOKS GOOD.
Lemonis: GOOD MORNING, BUDDY.
-Sal: GOOD MORNING, MARCUS.
-Lemonis: HOW ARE YOU? Sal: GETTING EVERYTHING FIGURED OUT HERE.
Lemonis: SO, SAL, THERE'S A COUPLE THINGS THAT I WANTED TO GET ACCOMPLISHED TODAY.
ARE THERE ANY OTHER THINGS PRESSING WE NEED TO KNOW ABOUT? Sal: THE TAXES.
Lemonis: THE REAL-ESTATE TAXES? Sal: HE WAS JUST HERE ASKING FOR THEM.
-Lemonis: WHO WAS HERE? -Sal: THE LANDLORD.
Lemonis: WHAT DID HE SAY? Sal: I TOLD HIM I WAS GONNA HAVE THE TAXES READY FOR HIM TODAY.
HE WAS UPSET ABOUT IT.
Lemonis: HOW MUCH IS THAT? Sal: $52,000 AND CHANGE, I THINK IT IS.
Lemonis: AND SO THAT'S PAST DUE AS WELL? -Giovanna: MM-HMM.
-Sal: YES.
Lemonis: CALL HIM.
TELL HIM TO COME BACK.
Sal: OKAY.
[ Ringing .]
MIKE: Hello? Lemonis: HEY, MIKE.
THIS IS MARCUS AND SAL OVER AT ARTISTIC STITCH.
HOW ARE YOU? YEAH, I'M SAL'S NEW PARTNER, AND -- WELL, THAT'S THE REASON FOR MY CALL, IS TO LET YOU KNOW THA AND ALSO TO LET YOU KNOW THAT I HAVE THE CHECK FOR THE TAXES FOR YOU.
IT'S $52,000.
HOW MUCH IS IN ARREARS? SIR, IS IT POSSIBLE THA JUST YOU AND I COULD MEET FOR A FEW MINUTES? MIKE: All right.
I'll stop by on the way back.
Lemonis: THANK YOU, SIR.
I HAVE TO JUST TELL YOU, THIS IS LIKE A RECURRING THEME.
PEOPLE FEEL LIKE THEY'RE NOT GETTING THE FULL STORY.
AND ARE WE PAST DUE ON THE RENT AS WELL? HE SAID WE'RE IN ARREARS.
WHAT ARE WE PAST DUE ON? -Sal: YOU KNOW, SO, HE -- -Lemonis: WHAT'S THIS? -IS THIS CERTIFIED? -Sal: YES.
Lemonis: WHAT IS IT? Sal: IT'S BASICALLY TELLING ME WHAT I OWE.
Lemonis: SO, YOU ACTUALLY OWE HIM $120,000? THIS IS A LOT OF MONEY.
Sal: I JUST DIDN'T WAN YOU TO GET INVOLVED IN SOMETHING LIKE THIS UNTIL -- Lemonis: I HAVE FULL FINANCIAL CONTROL.
Sal: NO, AND I AGREE ON THAT.
Lemonis: SO, IF WE'RE PARTNERS, I NEED TO KNOW ABOUT THIS KIND OF STUFF.
Sal: RIGHT, BUT HAVEN'T DISCUSSED EXACTLY WHAT NEEDED TO BE DONE.
Lemonis: AY-YI-YI, SAL.
HE'S TOLD ME FROM THE BEGINNING THAT WE OWE THE LANDLORD $52,000.
I NOW COME TO FIND OU THAT WE OWE HIM $120,000.
I'M RUNNING OUT OF PATIENCE.
Sal: OH, BOY.
I FEEL LIKE MY LIFE IS JUST TUMBLING.
Lemonis: HAVE YOU CAUGHT HIM LYING A BUNCH OF TIMES, AS WELL? Mike: I CATCH HIM ALL THE TIME.
IT'S NOW CRIMINAL COURT.
HIS FINE IS A CRIMINAL MATTER.
Lemonis: MIKE, I'M MARCUS.
NICE TO MEET YOU.
THANK YOU FOR COMING.
I HAVEN'T BEEN GETTING STRAIGHT ANSWERS FROM SAL, SO I WANTED TO MEE WITH THE LANDLORD TO GE A DIFFERENT PERSPECTIVE ON WHAT SAL'S REALLY LIKE TO DEAL WITH.
DOESN'T IT SEEM ODD TO YOU THAT THERE'S ALWAYS A DISCONNECT IN HIS STORY? Mike: I FIND YOU'RE NEVER GONNA GET THE TRUTH.
Lemonis: HAVE YOU CAUGHT HIM LYING A BUNCH OF TIMES, AS WELL? Mike: I CATCH HIM ALL THE TIME.
Lemonis: WHY DOES HE DO THAT? Mike: HE DOESN'T DO IT MALICIOUSLY, BUT THERE'S A LITTLE LYING IN THERE, THERE'S A LITTLE -Lemonis: EXAGGERATION? -Mike: EXAGGERATION.
WHY CAN'T HE GE HIS C.
OF O.
? Lemonis: HE DOESN'T HAVE HIS CERTIFICATE OF OCCUPANCY HERE? -Mike: NO, NOT TO MY KNOWLEDGE.
-Lemonis: HOW IS HE OPERATING? Mike: HE'S OPERATING.
SO, NOW I GO A CRIMINAL-COURT VIOLATION FOR THE FIRE DEPARTMEN BECAUSE HE NEVER FIXED WHAT HE WAS SUPPOSED TO FIX.
Lemonis: HAS HE NOT PASSED THE FIRE INSPECTION? Mike: THEY ALWAYS FAIL HIM.
MY NAME IS ON THERE.
HIS FINE IS A CRIMINAL MATTER.
Lemonis: IS HE IN JEOPARDY OF HAVING THE RIGHT TO BUY THIS BUILDING FROM YOU RIGHT NOW? Mike: WHAT DO YOU THINK? Lemonis: YEAH.
SAL IS $120,000 PAST DUE WITH HIS LANDLORD, AND HE'S ALSO VIOLATED CERTAIN PROVISIONS IN HIS LEASE.
THE BIGGEST ONE IS THAT HE DOESN'T HAVE A CERTIFICATE OF OCCUPANCY.
IF WE DON'T GE THIS CERTIFICATE OF OCCUPANCY AND THE LANDLORD CLOSES THE BUILDING DOWN AND HE PULLS THE OPTION AWAY, THE MONEY THAT I'VE SPEN IS GONE.
THERE'S NO WAY TO GET THAT MONEY BACK.
-HEY, SAL.
-Sal: YEAH? Lemonis: LET ME GRAB YOU FOR A SECOND.
SO, THE LANDLORD SAYS THAT YOU STILL DON'T HAVE A CERTIFICATE OF OCCUPANCY HERE.
Sal: WE'RE USING THE OLD CERTIFICATE BECAUSE WE HAD A PREVIOUS C.
O.
-- IT WAS MANUFACTURING, SO IF YOU HAVE MANUFACTURING, YOU BASICALLY COULD USE THE BUILDING.
Lemonis: SO, ARE WE CLEAR TO BE A MANUFACTURER BUT NOTHING ELSE? Sal: [ STAMMERS .]
Lemonis: CERTIFICATE OF OCCUPANCY MEANS THAT THE CITY IS SAYING YOU ARE NOT PERMITTED TO HAVE PEOPLE IN THE BUILDING BECAUSE IT IS NOT APPROVED BASED ON FIRE CODES OR ELECTRICAL CODES.
HE WANTS TO TERMINATE YOUR RIGH TO THE BUY THE BUILDING.
Sal: YEAH, WELL, WHY WOULD HE -- WHY WOULD HE -- Lemonis: HE SAID HE GOT A NOTICE FOR SOME CRIMINAL CHARGES.
Sal: NO, AND I HAVE THAT NOTICE.
IT'S NOT A CRIMINAL CHARGE, AND I THINK IT'S -- -Lemonis: CAN I SEE IT? -Sal: YEAH, SURE.
Lemonis: IT SAYS "NEW YORK CRIMINAL COURT.
ARE YOU INSANE?" Sal: YEAH, THAT'S WHAT -- HE WROTE THAT.
Lemonis: OKAY, SO HE GETS A NOTICE.
YOU CAN SEE FROM HIS PERSPECTIVE.
WHAT IS THIS FOR? WHAT IS THIS COURT ORDER FOR? Sal: THIS IS FOR THE FIRE ALARM, WHICH IS -- Lemonis: NOT IN COMPLIANCE? Sal: RIGHT, WHICH NOW IT'S READY FOR THE NEX INSPECTION TO COME IN.
Lemonis: HE'S BEING TOLD THAT HE HAS TO GO DEFEND HIMSELF IN CRIMINAL COURT.
I MEAN, I KNOW WHY THE GUY'S OFF THE CHARTS.
HE COULD GO TO JAIL.
Sal: I COULD CALL MY ARCHITEC AND SEE HOW WE COULD FILE FOR THE INSPECTIONS.
SHOULD WE CALL NOW? Lemonis: YEAH.
Sal: CALL WALTER, WHICH IS THE ARCHITEC WITH THIS VIOLATION HERE.
AND I'M SO CONFUSED WITH ALL THIS.
Lemonis: I DON'T WAN TO HEAR THAT YOU'RE CONFUSED.
THIS IS YOUR PRIMARY RESPONSIBILITY, AND SO YOU SHOULD BE DOING NOTHING ELSE THAN FIGURING HOW TO KEEP THE COPS FROM LOCKING THE DOOR.
AND YOUR LANDLORD COULD GO TO JAIL.
-DO YOU UNDERSTAND THAT? -Sal: YES.
Lemonis: AND SO WHY ISN' THIS THE MOST IMPORTANT THING YOU'RE WORKING ON RIGHT NOW? Sal: I UNDERSTAND WHAT YOU'RE SAYING.
Lemonis: PLEASE.
I DON'T WANT HIM TO GO TO JAIL OR THE PLACE TO GET LOCKED.
Sal: OKAY.
Lemonis: I KNOW SAL, DEEP DOWN, IS NOT A BAD GUY, BUT HE'S ALWAYS LYING TO ME ABOUT SOMETHING.
I'VE HAD ENOUGH.
I NEED TO FIGURE OU WHAT IT IS THAT'S ACTUALLY AT THE ROOT OF THE PROBLEM.
WELL, ONE OF THE THINGS THAT I HAVE TO REALLY GET MY HEAD AROUND IS WHY YOU'RE NO MORE CLEAR WITH ME ABOUT STUFF, 'CAUSE SURPRISES Sal: OH, NO, THEY DON'T -- Lemonis: THEY DON' WORK WELL IN BUSINESS.
Sal: THAT WAS THE FEAR, AND I FELT THE CONSEQUENCES TO ME PERSONALLY WERE SO, UH, LARGE FOR THE COMPANY TO NOT HAVE YOU PART OF IT, THAT THE FEAR ITSELF IS WHAT DIDN'T MAKE ME COME OUT.
Lemonis: GOING FORWARD, JUST SO YOU KNOW, -I CAN DEAL WITH BAD NEWS.
-Sal: RIGHT.
I CAN'T DEAL WITH NOT KNOWING NEWS.
Sal: NOT KNOWING, I AGREE.
Lemonis: DESPERATE PEOPLE DO DO DESPERATE THINGS, AND THE FACT THAT SAL WAS WILLING TO BE VULNERABLE AND SAID, "I'M LYING BECAUSE I'M SCARED YOU'RE GONNA LEAVE," MEANT A LOT TO ME.
YOU KNOW WHA ONE OF THE CHALLENGES IS WITH LYING IN BUSINESS? NUMBERS MOVE FAST, AND THAT'S THE EASIEST PLACE TO GET CAUGHT, IS 'CAUSE NUMBERS -- THEY DON'T LIE.
Sal: NO, YOU'RE RIGHT.
Lemonis: I JUST NEED TO KNOW THAT IT'S NOT GONNA CONTINUE TO HAPPEN, OKAY? -Sal: OKAY.
-Lemonis: ALL RIGHT.
Lemonis: THE LAST FEW MONTHS AT ARTISTIC STITCH HAVE BEEN A LOT OF WORK BUT THINGS ARE PROGRESSING WELL.
FOR THE RETAIL STORE, WE'VE CHANGED THE NAME TO QUEENS VIBE, AND WE'RE LANDING SOME VERY LARGE ACCOUNTS.
THAT ONE LOOKS GOOD.
THE LOBBY HAS BEEN TRANSFORMED INTO A RETAIL STORE, FEATURING OUR VERY OWN QUEENS VIBE PRODUCT LINE, AND IT'S REALLY STRUCK A CHORD WITH THE LOCALS.
Sal: THANK YOU VERY MUCH.
Lemonis: HALF OF THE BASKETBALL COUR HAS BEEN REPURPOSED FOR A DESIGN CENTER.
NOW, YOU KNOW THAT WHATEVER YOU DRAW IS GONNA GO ON THE MACHINE AND YOU'RE GONNA BE ABLE TO WEAR IT? Girl: YEAH.
-Lemonis: IS THAT COOL? -Girl: YEAH.
Lemonis: IT FEELS REALLY GOOD TO WATCH KIDS COME HERE AND DRAW THINGS OU AND SEE THEM MAKE THEIR OWN T-SHIRTS.
IT'S LIKE YOU COULD WEAR IT TO BED.
Girl: YEAH.
Lemonis: IN ADDITION TO THE ORIGINAL $660,000, I'VE SPENT OVER $100,000 ON THIS RENOVATION, AND WHILE THE EARLY RETURNS ARE PROMISING, WE'RE DEFINITELY NOT OUT OF THE WOODS.
I THINK THE EFFOR AND THE INTENSITY OF WORK, I'LL GIVE YOU GUYS AN A-PLUS, BUT YOU HAVE TO FOLLOW THE PLAN.
AS FOR SAL, I FEEL LIKE HE'S MADE SOME PROGRESS.
-Fabio: IT'S LINED UP GOOD.
-Sal: YEAH, IT LOOKS GOOD.
Lemonis: ANYTIME YOU TELL SOMEBODY THAT THEY'VE MADE A LO OF MISTAKES AND THEY PU THEIR FAMILY AT RISK, IT'S A HUMBLING EXPERIENCE.
Sal: QUEENS VIBE, HERE WE COME.
Lemonis: I FEEL LIKE I HAVE A LOT OF WORK LEFT TO DO WITH HIM.
WE'RE NOT OUT OF THE WOODS YET.
YOU KNOW THAT, RIGHT? Sal: NO, NO, NOT AT ALL.
Lemonis: IT'S A WORK IN PROGRESS.
I LEAVE HERE ENCOURAGED, BUT I DON'T LEAVE HERE TOTALLY SATISFIED.
-WE GOT A BRIGHT FUTURE.
-Sal: I'M EXCITED.
Lemonis: LET'S GO.
COME ON.
Sal: IT'S A MULTIPLEX OF BUSINESSES THAT REALLY WORK TOGETHER.
Lemonis: THAT'S WHAT'S CALLED A "MALL.
" Lemonis: DELUSIONS OF GRANDEUR COMPELLED THE OWNER TO BUILD OUT HIS ENTIRE FACILITY WITH WHATEVER HE COULD THINK OF.
Sal: THIS IS THE RESTAURANT.
THIS IS THE SPORTS COMPLEX.
THIS IS OUR BASEBALL FACILITY.
Lemonis: IS IT PROFITABLE? Sal: NO.
Lemonis: IF I CAN'T FIGURE OUT A WAY TO BRING THIS COMPANY BACK TO ITS ORIGINAL ROOTS, ARTISTIC STITCH WILL CLOSE ITS DOORS FOREVER.
THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Lemonis: MY NAME IS MARCUS LEMONIS, AND I FIX FAILING BUSINESSES.
Lemonis: IF YOU DON'T LIKE MONEY, DON'T FOLLOW MY PROCESS.
Lemonis: I MAKE THE TOUGH DECISIONS.
Lemonis: WE'RE CLOSING THE STORE.
WE'RE DONE.
I'M NO TALKING ABOUT IT ANYMORE.
Lemonis: I BACK THEM UP, SPENDING MY OWN MONEY.
IT'S NOT ALWAYS PRETTY Man: PERFECT FLAVOR.
Lemonis: BUT THIS IS BUSINESS.
Lemonis: YOU GOT TO TRUST THE PROCESS.
Lemonis: I DO IT TO SAVE JOBS, AND I DO IT TO MAKE MONEY.
Lemonis: THANKS FOR YOUR BUSINESS.
Lemonis: THIS IS "THE PROFIT.
" QUEENS, NEW YORK, IS A DENSE AND DIVERSE WORLD OF CULTURES AND BUSINESSES.
AND IT'S HOME TO ARTISTIC STITCH, AN EMBROIDERY AND SILK-SCREENING BUSINESS RUN BY SAL LORETTA AND NICK MEOLA.
THE COMPANY STARTED 18 YEARS AGO IN SAL'S GARAGE.
-Sal: WHERE WE AT WITH THIS JOB? -Fabio: IT'LL BE DONE TODAY.
Lemonis: TODAY, IT'S BECOME A $2-MILLION-A-YEAR BUSINESS, THE BULK OF THAT REVENUE COMING FROM UNIFORMS, HATS, AND CUSTOM SHIRTS.
Fabio: HEY, THAT'S ONE DOWN.
HERE WE GO.
HERE WE GO.
Lemonis: TWO YEARS AGO, SAL AND NICK DECIDED TO MOVE THEIR BUSINESS INTO A 28,000-SQUARE-FOO WAREHOUSE.
SAL BUILT OUT THE SPACE USING HIS SAVINGS.
Sal: I PUT IN A HALF A MILLION DOLLARS OF LIQUID CASH.
Lemonis: AND TO INCREASE REVENUE, HE DECIDED TO STAR A FEW NEW BUSINESSES.
Sal: I FELT IT WAS A PRETTY UNIQUE CONCEPT THAT I HAD.
Lemonis: NOW HE HAS A RESTAURANT, A SIGN COMPANY, AND A SPORTS COMPLEX WITH BASKETBALL COURTS AND BATTING CAGES.
BUT THE NEW BUSINESSES HAVE STRUGGLED, AND THE NEW BUILDING AND ITS REMODEL HAS THE COMPANY $1.
5 MILLION IN DEBT.
Sal: I GOT TO TAKE FROM PAUL TO PAY PETER AND MOVE THIS DOWN HERE AND KIND OF FINAGLE EVERYTHING.
Lemonis: I KNOW THAT EMBROIDERY AND SILK SCREENING HAS HIGH MARGINS, BUT IF SAL AND NICK CAN'T FIND A WAY TO PAY DOWN THEIR DEBT, THIS COMPANY WILL BECOME UNSTITCHED.
WHEN I GO INTO ARTISTIC STITCH, I SEE RACKS OF CLOTHING, BUT BEHIND THE RACKS OF CLOTHING, I SEE BASKETBALL COURTS.
AND I LOOK TO THE RIGHT, AND I SEE AN ITALIAN RESTAURANT.
I FEEL LIKE I'VE JUST ENTERED THE WORLD'S WEIRDEST MINI-MALL.
I THOUGHT I WAS COMING TO AN EMBROIDERY AND SILK-SCREENING BUSINESS.
THEIR PRIMARY BUSINESS LOOKS LIKE IT'S SHOVED IN THE CORNER.
IT'S AN UNUSUAL SETUP, TO SAY THE LEAST.
HOW ARE YOU DOING? I'M MARCUS.
Fabio: HOW ARE YOU DOING, MARCUS? FABIO.
Lemonis: HEY, NICE TO MEET YOU.
-YOU GUYS DOING A BIG JOB? -Fabio: WE GOT JOBS.
Lemonis: THAT'S REALLY GOOD.
Fabio: IT'S AMAZING.
LIKE, THESE MACHINES ARE REALLY AMAZING.
Lemonis: HOW LONG HAVE YOU BEEN DOING THIS? Fabio: 18 YEARS.
FROM DAY 1, WE WORKED OUT OF THE GARAGE.
Lemonis: ARE YOU A ONE-MAN BAND IN HERE? Fabio: I AM.
I AM.
IF I'M NOT HERE, THIS DOESN'T RUN.
SOMETIMES IT DOES GE A LITTLE -- IT'S OVERWHELMING.
Sal: HI, MARCUS.
SAL LORETTA.
HOW ARE YOU? -Lemonis: NICE TO MEET YOU.
-Sal: NICE TO MEET YOU.
I'M ONE OF THE OWNERS HERE.
HOW ARE YOU DOING? Lemonis: GOOD.
I WAS JUS GETTING TO MEET FABIO.
Sal: FABIO'S BEEN WITH ME A LONG TIME, SO HE'S A -- MY BROTHER-IN-LAW.
I STARTED THE BUSINESS WHEN I WAS 17 YEARS OLD IN MY GARAGE, AND IT JUST EXPLODED.
AND LOOK AT THIS.
I MEAN Lemonis: SO IT'S BEEN A VERY PROFITABLE YEAR SO FAR? Sal: YEAH.
I MEAN, WHEN I MEAN "PROFITABLE," THE BUSINESSES DO WELL.
THE ONLY PROBLEM IS THE DEBT.
THIS PLACE TOOK A LOT OF MONEY TO BUILD.
Lemonis: HOW MUCH DEBT'S ON THE BOOKS? Sal: ABOUT $1.
5 MILLION.
WE COULDN' PAY THE CONTRACTORS, AND WE WOULD HAVE TO USE CREDIT CARDS.
THERE WAS NO FINANCING HERE.
YOU GO TO THE BANK, AND THEY SAY, "WHAT ARE YOU BUILDING? A SPORTS COMPLEX, EMBROIDERY? SAL, WHAT THE HELL IS GOING ON OVER THERE?" FLAT-OUT NO.
"TOO RISKY.
" Lemonis: FABIO, HOW DO YOU DESCRIBE THE BUSINESS TO PEOPLE? Fabio: HMM.
THE BUSINESS ITSELF, IT'S COMPLICATED.
THERE IS A LO GOING ON IN HERE.
IT'S HARD TO REALLY JUST PUT I ALL IN A NUTSHELL REALLY QUICK.
Sal: IT'S A MULTIPLEX OF BUSINESSES THAT REALLY WORK TOGETHER.
YOU GET SOMEBODY COMING IN THAT WANTS TO DO SHIRTS.
HE LOOKS RIGHT OUT TO THAT THING.
NOW, ON A FRIDAY AND SATURDAY NIGHT, HE'S COMING IN WITH HIS FAMILY AND HIS KIDS, AND HE'S GONNA ACTUALLY EA IN THE RESTAURANT.
Lemonis: AND SO THE FAMILY COMES IN AND THEY EAT DINNER, AND THEY REALIZE THA THEY HAVE A PROBLEM WITH THEIR SINK AT HOME.
WHAT DO YOU KNOW? THERE'S A PLUMBER HERE, AS WELL.
Lemonis: AND BY THE WAY, THAT'S WHAT'S CALLED A "MALL.
" IT'S NOT REALLY AS CLEAN A VERTICAL INTEGRATION AS IT COULD BE.
VERTICAL INTEGRATION IS GROWING A BUSINESS ON A COMMON PLATFORM.
FOR EXAMPLE, AN AUTO DEALERSHIP -- NOT ONLY DO YOU BUY THE CAR THERE, BUT YOU SERVICE IT, YOU BUY PARTS, YOU GET FINANCING, YOU GET INSURANCE.
THEY ALL CENTER AROUND THE SAME THING.
EMBROIDERY AND SILK SCREENING HAS NOTHING TO DO WITH BATTING CAGES.
-CAN I GET A TOUR? -Sal: YEAH, ABSOLUTELY.
SO, THIS IS THE PRODUCTION PAR OF THE FACILITY.
-Lemonis: FOR SCREENING? -Sal: FOR SCREENING.
Lemonis: HOW EXPENSIVE ARE THESE MACHINES? Sal: THAT MACHINE THERE IS $55,000 TO $60,000.
-Lemonis: IT'S A NICE SPACE.
-Sal: THANK YOU.
THIS IS THE SIGN SHOP.
THIS IS NICK, MY PARTNER.
-Lemonis: HI, NICK.
I'M MARCUS.
-Nick: PLEASURE.
HOW ARE YOU? Lemonis: SO, YOU GUYS ARE PARTNERS IN THE WHOLE PLACE? Sal: Lemonis: HOW DO YOU GUYS SPLIT YOUR PARTNERSHIP DUTIES? WHO DOES WHAT? Nick: HE DOES BASICALLY ALL THE DAY-TO-DAY OPERATIONS, AND I DO THE SALES PART.
-Lemonis: YOU'RE THE PITCHMAN? -Nick: YES.
SALES IS SOMETHING THAT I LOVE TO DO.
I LOVE TALKING WITH PEOPLE AND STUFF.
Lemonis: OKAY.
AND SO HOW MUCH REVENUE WILL THIS PARTICULAR PAR OF THE BUSINESS DO A YEAR? Sal: THIS DID $170,000.
Lemonis: AND HOW MUCH BUSINESS DID THE EMBROIDERY DO? Sal: $1.
3 MILLION.
BUT THAT'S ALL EMBROIDERY AND SILK SCREEN COMBINED.
Lemonis: AND THE MARGINS ON THE TWO OF THEM ARE? Sal: 75%.
Lemonis: AND SO ALMOST $900,000 IN GROSS PROFIT? Sal: GROSS PROFITS, YEAH.
Lemonis: THAT'S A LOT OF GROSS.
-LET'S FINISH THE TOUR, OKAY? -Sal: YES.
-Lemonis: NICE MEETING YOU, SIR.
-Nick: NICE TO MEET YOU.
WE'LL SEE YOU.
Sal: SO, THIS IS THE RESTAURANT.
I WANTED SORT OF A UNIQUE FEEL TO IT.
Lemonis: WHAT KIND OF REVENUE WILL THE RESTAURANT DO? Sal: LAST YEAR, ABOUT $300,000.
Lemonis: LESS THAN $1,000 A DAY IN SALES? -Sal: YES.
-Lemonis: THAT'S TOUGH.
Lemonis: IT'S LUNCHTIME AND THERE'S NOBODY IN THIS RESTAURANT, BUT QUITE FRANKLY, I'M NOT THAT SURPRISED.
WHO WANTS TO SIT HERE AND WATCH KIDS PLAY BASKETBALL AND PAY FOR FINE DINING? Sal: SO, THIS IS OUR BASEBALL FACILITY.
Lemonis: SO, HOW MUCH REVENUE ACTUALLY COMES FROM THE SPORTS COMPLEX? Sal: ANYWHERE FROM $350,000 TO $400,000 A YEAR.
-Lemonis: SALES, NOT PROFIT? -Sal: SALES, CORRECT.
Lemonis: SO, HOW CAN YOU BREAK THAT DOWN FOR ME? HOW MUCH DOES BASEBALL GENERATE? Sal: BETWEEN $300,000 AND $325,000.
Lemonis: IS IT PROFITABLE? Sal: NO.
NO.
Lemonis: OKAY.
AND HOW ABOU THE BASKETBALL UPSTAIRS? Sal: SALES UP TO THIS DATE, I WOULD PROBABLY SAY ABOUT $10,000.
Lemonis: I SEE HOW BUSY THE EMBROIDERY ROOM IS, I SEE HOW BUSY THE SILK SCREENING IS.
Sal: MM-HMM.
Lemonis: WHY ARE YOU INVESTING IN THIS STUFF? THE PRINCIPLE BUSINESS HAS TO BE "WHAT AM I?" AND RIGHT NOW, IT FEELS LIKE AN IDENTITY CRISIS.
AFTER HEARING THAT THE EMBROIDERY AND SILK-SCREENING BUSINESS DOES $1.
3 MILLION A YEAR IN SALES AND GENERATES $900,000 IN GROSS PROFIT, 75% MARGINS, AND THE RESTAURANT, THE BATTING CAGES, THE BASKETBALL COUR DON'T EVEN EQUAL HALF OF THAT IN REVENUE, WHY WOULD YOU WASTE YOUR TIME WITH ANYTHING ELSE OTHER THAN EXPANDING AND GROWING YOUR EMBROIDERY AND YOUR SILK-SCREENING BUSINESS? HOW MUCH IS THE RENT HERE A MONTH? Sal: CURRENTLY $13,000, PLUS WITH THE REAL-ESTATE TAX, ANOTHER $4,000, SO ABOUT $17,000 A MONTH.
Lemonis: WHOA.
Sal: IT'S A BIG FACILITY, THOUGH.
Lemonis: RIGHT, BUT YOU BUILT IT OUT, AND SO YOU PAID $17,000 ESSENTIALLY FOR A GROUND AND AN EMPTY BUILDING LEASE.
Sal: YEAH.
I MADE MY BED, AND I GOT TO DEAL WITH IT.
Lemonis: I'M GONNA WALK AROUND AND TALK TO SOME OTHER PEOPLE.
I'LL SEE YOU IN A LITTLE BIT, OKAY? YOU KNOW, AS I SPOKE TO ALL THE PEOPLE THAT WORK IN THE COMPANY, I CAN TELL THAT THEY WERE REALLY FEELING THE PRESSURE, ESPECIALLY SAL'S WIFE, JOANNE, WHO RUNS THE SPORTS COMPLEX.
Joanne: EVERYTHING WE EVER WORKED FOR AND, YOU KNOW, SAVED FOR IS ALL HERE.
Lemonis: DESPITE ALL THE PROBLEMS, THERE ARE SOME REALLY DEDICATED PEOPLE THAT WILL DO ANYTHING TO MAKE SURE THIS PLACE SURVIVES.
Fabio: I DO WHAT I GOT TO DO.
LIKE, I'LL PUT THIS IN FRONT OF MY -- SOMETIMES, MY WIFE WILL SAY, LIKE, "WHAT ARE YOU DOING? YOU GOT A FAMILY.
RELAX.
DON'T RUN OVER THERE.
" BUT I DO IT BECAUSE I KNOW HOW IT IS RIGHT NOW.
IT'S HARD FOR HIM, AND I WANT TO KEEP THIS GOING.
Lemonis: AND WHILE THEIR HEAR MAY BE IN THE RIGHT PLACE, ALL TOO OFTEN, THEY WERE VERY FOGGY ON THE CRITICAL DETAILS.
HOW MUCH MONEY DOES THIS BUSINESS MAKE A YEAR? Nick: I MEAN, AS FAR AS THAT, I'LL BE HONEST -- I DON'T KNOW THE EXACT NUMBERS OF THAT.
Lemonis: EVEN THOUGH YOU'RE A 50% PARTNER? Nick: YEAH.
Fabio: ONLY THREE WITH LOGOS, RIGHT? ONE OF THEM WITH NO LOGOS? ALL RIGHT.
Lemonis: HOW ARE YOU? I'M MARCUS.
-Giovanna: GIOVANNA.
-Lemonis: NICE TO MEET YOU.
ARE YOU RESPONSIBLE FOR THE BOOKS? Giovanna: YES, I AM.
Lemonis: AND SO IS IT POSSIBLE TO GET A BALANCE SHEET AND PnL? Giovanna: YES.
Lemonis: IF I CAN GET THAT, THAT WOULD BE GREAT.
I'M IMPRESSED BY THE FAC THAT EMBROIDERY, SILK SCREENING, AND SIGNS GENERATES $900,000 IN GROSS PROFIT.
BUT I NEED TO DIG INTO THE FINANCIALS SO I CAN FIGURE OU HOW IT IS THAT THEY'RE NOT ABLE TO PAY DOWN THEIR DEBT.
WHEN YOU ADD UP ALL THE BUSINESSES TOGETHER, DO THEY MAKE MONEY COLLECTIVELY? Giovanna: YES.
Lemonis: OKAY.
Giovanna: THE MOST MONEY WOULD BE THE EMBROIDERY AND THE SILK SCREENING.
Lemonis: TOTAL REVENUE -- $1.
3 MILLION.
EXPENSES.
WAGES AND SALARIES AT $276,000.
EQUIPMENT LEASE, ARTISTIC STITCH -- $3,500 A MONTH, $3,400 A MONTH.
EVEN THOUGH THEY GENERATE $900,000 OF GROSS PROFI IN THEIR EMBROIDERY AND SILK-SCREENING BUSINESS, AFTER YOU FACTOR IN OPERATING EXPENSES ON ALL THE OTHER BUSINESSES, IT LOOKS LIKE THE ACTUAL PROFITABILITY OF THE BUSINESS IS AROUND $100,000.
HOW MUCH TOTAL DEB IS ON THE BUSINESS? YOU TOLD ME THERE WAS $1.
5 MILLION.
HOW MUCH IS THE DEB TO OUTSIDERS -- PEOPLE OTHER THAN THE OWNER OF THE BUSINESS? OUTSTANDING CONSTRUCTION BILLS WHICH HASN'T BEEN PAID.
REAL-ESTATE TAXES -- YOU'RE PAST DUE ON THOSE? Sal: YEAH.
-Lemonis: HOW MUCH? -Sal: $52,000.
Lemonis: AND SO, BETWEEN CREDIT CARDS, THE CONSTRUCTION BILLS THAT HAVEN'T BEEN PAID, AND THE REAL-ESTATE TAXES, THERE'S $660,000.
SO, MADE MONEY ON PAPER, BUT ONCE YOU SERVICE THE INTERES AND THE PRINCIPLE PAYMENTS ON ALL OF THIS DEBT, -IT'S CASH-FLOW NEGATIVE.
-Giovanna: CORRECT.
Lemonis: THE CURRENT PRINCIPLE AND INTEREST PAYMENTS ON THE DEB ARE $240,000 A YEAR, BUT THE FINAL PROFI IS ONLY $100,000, LEAVING THEM $140,000 SHORT, AND THERE'S NOWHERE TO GET THE MONEY FROM.
WHAT HAVE YOU SACRIFICED TO THIS POINT, SAL, TO KIND OF KEEP THE DOORS OPEN? Sal: IT'S BEEN A LOT.
MY WIFE, SHE CALLS ME.
"SAL, THIS IS THE SECOND ELECTRIC BILL.
WHAT ARE WE GONNA DO?" THIS IS AT THE HOUSE.
I SAID, "JUST DON'T PAY IT.
" SHE COMES HOME.
SHE SEES A RED STICKER ON THE DOOR.
"WE'RE GONNA SHUT THE ELECTRIC.
" EVERY MONTH, THAT $400, $500, WAS ONE MORE PERSON THAT I COULD PAY, AND I DIDN'T WAN TO JEOPARDIZE MY EMPLOYEES.
"DON'T WORRY ABOUT ME," I SAY.
"LET'S JUS KEEP THIS PLACE GOING.
"THAT'S IT.
LET'S PAY EVERYBODY.
"EVERYBODY HAS MORTGAGES, EVERYBODY GOT BILLS.
"YOU KNOW WHAT? WHATEVER I CAN DO, I'M GONNA SACRIFICE.
" [ SIGHS .]
I DIDN'T WANT NOBODY TO, AT THE END OF THE DAY, FEEL UNCOMFORTABLE AND JUMP SHIP.
IT'S CRAZY.
[ SNIFFLES .]
Lemonis: HOW MANY WEEKS AWAY DO YOU THINK YOU ARE FROM TELLING THE EMPLOYEES THEY'VE LOST THEIR JOBS? Sal: ABOUT ONE MONTH.
Lemonis: YOU KNOW, THE CHARACTER OF A BUSINESSMAN ISN'T DEFINED BY HIS BANK ACCOUNT.
IT'S DEFINED BY WHAT HE'S WILLING TO DO FOR HIS PEOPLE.
YOU KNOW, YOU'VE MADE A LOT OF PERSONAL SACRIFICES SO THA THE TEAM CAN BE HERE.
YOU DO HAVE SOMETHING TO BE PROUD OF.
-HOW ARE YOU GUYS DOING? -Sal: GOOD.
Lemonis: WELL WHAT'S THE PARTNERSHIP LIKE BETWEEN YOU GUYS? Sal: WELL, WE'VE BEEN PARTNERS FOR 18 YEARS.
Lemonis: WHAT'S THAT PIECE OF PAPER RIGHT THERE, NICK? Nick: THIS IS THE SHAREHOLDERS CONTRAC THAT HAS ME AND SAL Lemonis: YOU GUYS ARE JUST Sal: WELL, I HAVEN'T SEEN THIS YET.
Lemonis: AFTER 18 YEARS, YOU GUYS DON'T HAVE AN AGREEMENT BETWEEN YOU GUYS? Sal: NO.
Nick: I MEAN, YOU'RE RIGHT.
THIS SHOULD'VE BEEN PROBABLY DONE A LONG TIME AGO.
Lemonis: IT FEELS LIKE HE WANTS TO GET EVERYTHING RIGHT AS OF YESTERDAY, WHICH IS WHA THIS IS DATED.
WHO OWNS Sal: IT'S 50/50.
Lemonis: NOTHING'S SIGNED.
Sal: AS WE GREW, WE GREW TOGETHER.
IT GIVES HIM INTEREST, IT GIVES ME INTEREST.
Nick: A LOT OF ARTISTIC STITCH IS WHERE IT IS 'CAUSE OF MY SALES.
Sal: WE'RE TOGETHER ON THIS.
WE'VE BEEN TOGETHER AND WE'RE GONNA CONTINUE TO BE TOGETHER ON ALL THIS, SO Lemonis: WELL, WHY DON'T YOU GUYS TELL ME HOW MUCH MONEY YOU WANT FROM ME AND WHAT IT IS THAT I'LL GET FOR IT? Sal: [ SIGHS .]
WIPING OUT THE DEBT -- OBVIOUSLY, THAT'S THE BIGGEST PROBLEM RIGHT NOW.
Lemonis: SO, WHAT DOES ALL THAT TOTAL? $660,000? Nick: YEAH, I MEAN, THAT'S WHAT -- SOMEWHERE AROUND SIX.
Lemonis: ALL THESE CONTRACTORS -- $300,000? HAVE THEY PUT A LIEN ON THE BUILDING YET? Sal: NO.
Lemonis: BUT THEY HAVE THE RIGHT TO? Sal: RIGHT.
ABSOLUTELY.
Lemonis: WHY DID YOU THINK THIS BUILDING, AGAIN, WAS A GOOD IDEA? Sal: I THINK, THE OPTIONS THAT I HAD, WHAT I NEGOTIATED WAS PRETTY STRONG.
Lemonis: THE OPTION THAT YOU HAVE TO BUY THE BUILDING FIVE YEARS FROM NOW -IS $2.
5 MILLION.
-Sal: CORRECT.
IT'S OBVIOUSLY WORTH A LOT MORE MONEY NOW.
Lemonis: HOW MUCH IS IT WORTH? Sal: $4 MILLION TO $5 MILLION RANGE.
-Lemonis: OH, REALLY? -Sal: YEAH.
Lemonis: SO, THAT'S REALLY THE BUSINESS PLAY, IS THE BUILDING, ISN'T IT? Sal: YEAH.
I MEAN, THE BUILDING IS -- Lemonis: 'CAUSE THERE'S NO WAY THAT YOU ACTUALLY THOUGH THAT PUTTING MEATBALLS AND BASKETBALLS AND BASEBALLS AND EMBROIDERY AND SILK SCREENING AND SIGNING WAS ACTUALLY A GOOD BUSINESS IDEA.
YOU LIKED THE REAL-ESTATE PLAY.
Sal: WELL, THE REAL-ESTATE PLAY IS ALWAYS -- Lemonis: BUT THIS IS A REAL-ESTATE PLAY? Sal: YEAH.
Lemonis: THE REAL-ESTATE PLAY IS SAL WORKING TO KEEP THE BUSINESS ALIVE LONG ENOUGH SO THAT HE CAN HAVE THE OPTION TO BUY THE BUILDING AT OR BELOW MARKET.
IF HE IS SUCCESSFUL AND ABLE TO TURN THE BUILDING AROUND, HE COULD STAND TO MAKE MILLIONS.
SO, REALLY, IF YOU CAN FIGURE OU TO KEEP THIS BUSINESS OPEN WITH SOMEBODY ELSE'S MONEY Sal: RIGHT.
Lemonis: THAT WHEN -- YOU SAID "RIGHT," RIGHT? Sal: THE POINT I'M TRYING TO MAKE -- Lemonis: YOU SAID "RIGHT," DIDN'T YOU? Sal: FOR ME -- Lemonis: YOU THINK THAT'S FUNNY, DON'T YOU? 'CAUSE I THINK IT'S FUNNY.
Nick: I MEAN Lemonis: HE DOESN'T REALIZE WHAT HE JUST SAID TO ME.
Sal: BY PUTTING CAPITAL INTO THE BUSINESS, IT'S GONNA STABILIZE THE BUSINESS.
Lemonis: WELL, THE BUSINESS SHOULDN'T BE BURDENED WITH ALL THIS DEBT.
Sal: RIGHT.
THAT'S WHAT I'M SAYING.
Lemonis: THIS DEBT IS YOU GUYS PLAYING HIGH-STAKES POKER WITH CHASE, CITIBANK, DISCOVER SO THAT YOU CAN HAVE A RIGHT TO BUY A BUILDING THA YOU DON'T OWN AND CAN'T AFFORD THAT SOMEBODY ELSE WILL FINANCE FOR YOU.
AND IF, FIVE YEARS FROM NOW, BUSINESS ISN'T DOING WELL, WHETHER YOU'LL ADMIT IT OR NOT, YOU DON'T REALLY CARE BECAUSE YOU CAN JUST SELL THE BUILDING AND MAKE YOURSELF A COUPLE MILLION DOLLARS.
I HAVE TO TELL YOU WHY I'M UNCOMFORTABLE RIGHT NOW -- YOU NEVER TOLD ME THIS WAS A REAL-ESTATE PLAY.
Sal: I DON'T THINK -- I DON'T KNOW WHERE YOU'RE COMING UP THAT IT'S A REAL-ESTATE PLAY.
Lemonis: THIS IS WHA YOU JUST ADMITTED TO ME -- TO KEEP THE BUSINESS ALIVE SO THAT YOU CAN GET TO THIS POINT.
I THINK THE CHALLENGE THAT I HAVE, GUYS, IS THAT MY MISSION IS TO INVES IN SMALL BUSINESSES, NOT REAL-ESTATE COMPANIES.
I JUST DON'T THINK IT'S SOMETHING THA I'M INTERESTED IN.
Lemonis: YOU NEVER TOLD ME THIS WAS A REAL-ESTATE PLAY.
MY MISSION IS TO INVES IN SMALL BUSINESSES, NOT REAL-ESTATE COMPANIES.
I JUST DON'T THINK IT'S SOMETHING THA I'M INTERESTED IN.
MY MAIN FOCUS IS MAKING SURE THAT THIS PLACE STAYS OPEN, THAT THESE EMPLOYEES GET THEIR PAYCHECKS, AND THAT THE BUSINESS IS SUCCESSFUL.
SAL THOUGHT I WOULD FUND THE BUSINESS TO KEEP IT GOING WHILE HE KEPT THE OPTION TO BUY THE BUILDING IN HIS BACK POCKET.
THAT AIN'T HAPPENING.
IN ORDER FOR ME TO MOVE FORWARD, I NEED TO KNOW THAT SAL IS EQUALLY COMMITTED TO FIXING THIS BUSINESS.
SO, MY OFFER IS $660,000 TO SATISFY THIS BURDENSOME DEB ON THE BUSINESS, AND I'LL HAVE I'LL HAVE FULL FINANCIAL CONTROL.
Sal: SO, HOW LONG ARE YOU PLANNING TO HOLD FINANCIAL CONTROL? Lemonis: FOREVER.
Sal: OH, BOY.
Lemonis: WHEN THE OPTION GETS EXERCISED, I'M THE FIRST PERSON TO GET MY MONEY OUT.
AND SO, WHAT'S THAT CALLED IS "LAST IN, FIRST OUT.
" Sal: I JUST DON'T THINK THAT'S FAIR.
IF THE BUILDING IS WORTH $6 MILLION Lemonis: I GET THE MONEY FIRST.
Nick: YOU GET THAT MONEY BACK, THE $660,000.
Sal: AND THEN, FROM WHAT I UNDERSTAND, HALF OF THE PROFITS OF THAT BUILDING BECOME YOURS.
Lemonis: HALF OF THE PROFITS OF EVERYTHING, INCLUDING THE SUCCESSFUL BUSINESS THAT WE'RE GONNA HAVE.
BUT IF IT'S SOMETHING THAT DOESN'T WORK FOR YOU, I UNDERSTAND.
WE DON'T HAVE TO DO IT.
Sal: LET'S JUST DO WHATEVER WE GOT TO DO, AND LET'S JUS GET IT GOING.
LET'S JUST DO IT.
CAN I ASK YOU A QUESTION? I FEEL LIKE, OBVIOUSLY, THERE'S MONEY INVESTED -- THIS IS EQUITY THAT I PUT IN.
HOW DO I GET THIS MONEY BACK? Lemonis: IF YOU THINK YOU SHOULD HAVE MORE EQUITY IN THE BUSINESS OUT OF THE OTHER 50% BECAUSE YOU PUT MORE IN, WE CAN WORK IT OU RIGHT NOW.
SO, I'M GONNA HAVE 50%.
WHAT'S GONNA BE YOUR ALLOCATION? WE ARE GONNA FACTOR FABIO INTO THIS EQUATION, I CAN TELL YOU RIGHT NOW.
FOR ME, CUTTING FABIO IN THE DEAL IS A FORM OF INSURANCE.
HERE'S A GUY THAT'S RUNNING THE ONLY BUSINESS THAT'S MAKING ANY MONEY IN THIS PLACE -- THE EMBROIDERY AND THE SILK-SCREENING BUSINESS.
Sal: I BELIEVE HE SHOULD AT LEAST, MINIMUM, HAVE 10%.
Lemonis: ME TOO.
THERE'S FABIO FOR 10%.
THAT LEAVES 40%.
HOW ARE WE SPLITTING IT? -25&, 15%, AND 10%? -Sal: I THINK THAT'S FAIR.
Nick: I'M ONLY GETTING 5% MORE THAN FABIO.
FABIO'S -- I MEAN Lemonis: FABIO'S BEEN IN BUSINESS FOR HOW LONG WITH YOU GUYS? Sal: SINCE THE BEGINNING.
Lemonis: AND SO HE'S NOT ANY MORE OR LESS IMPORTANT THAN YOU ARE.
YOU'RE GETTING MORE THAN HIM, WHICH IS, I THINK -- -THIS IS GENEROUS.
-Nick: THAT'S FINE.
THAT'S FINE.
Lemonis: OKAY? SO THE MONEY WILL BE USED TO SATISFY THE TAXES TO THE LANDLORD, PAY THE CONTRACTORS, AND SATISFY THE CREDIT CARDS ASSOCIATED WITH BUILDING OU THE BUILDING.
DO WE HAVE A DEAL? Sal: WE HAVE A DEAL.
Lemonis: DO WE HAVE A DEAL? Nick: YES, WE DO HAVE A DEAL.
PHEW.
Sal: PHEW! IT'S A BURDEN AND PRESSURE OFF RIGHT NOW, AND I FEEL LIKE I CAN NOW CONCENTRATE ON THE BUSINESS AND NOT CONCENTRATE ON MY FINANCIAL DEBT IN THE COMPANY.
Lemonis: SO, FOR THOSE OF YOU WHO DON'T KNOW, I'VE MADE A DEAL TO MAKE AN INVESTMENT INTO THIS BUSINESS.
TODAY, THE COMPANY IS KIND OF A FINANCIAL MESS, AND SO THE DEAL THAT I MADE WAS TO PUT $660,000 INTO THE BUSINESS SO THAT WE CAN PAY OFF THE DEBT.
I WILL OWN 50% OF THE BUSINESS, AND I'LL BE 100% IN CHARGE.
SAL WILL BE MY PARTNER AT 25%, NICK WILL BE MY PARTNER AT 15%, AND GOING FORWARD, FABIO WILL HAVE 10% OF THE EQUITY.
[ APPLAUSE .]
Fabio: THANK YOU.
I REALLY DO APPRECIATE IT.
I ALWAYS KIND OF FELT LIKE I WAS A BIG PART OF THIS PLACE, SO IT FEELS VERY GOOD.
Lemonis: THE SALES ORGANIZATION HAS TO HAVE LEADERS, AND IF WE'RE NOT SELLING, WE'RE CLOSING.
WE ARE A SALES ORGANIZATION THAT'S GONNA GO BACK TO OUR ROOTS BY EMBROIDERING AND SILK SCREENING AND PRINTING WHATEVER IT IS THAT CUSTOMERS WANT.
WE CAN'T JUST MAKE I BY SELLING WHO WE HAVE TODAY.
WE NEED THE BIG CORPORATE ACCOUNTS.
THE BENEFI OF CORPORATE ACCOUNTS IS, THEY ORDER LARGER VOLUMES MORE OFTEN.
AND WHILE JOE'S PIZZA MAY ORDER 100 SHIRTS A YEAR, A LARGE CORPORATE ACCOUN LIKE AT& MAY ORDER 10,000 SHIRTS FOUR TIMES A YEAR, AND THAT'S A LOT OF BUSINESS.
WE'RE GONNA BE REPURPOSING THIS SPACE SO THAT WE CAN CAPITALIZE ON WHAT REALLY MAKES US MONEY HERE.
WE WILL NOT BE DISTRACTED BY THINGS THAT COST US MONEY AND THAT DISTRACT US FROM EXECUTING OUR PLAN.
Sal: I THINK ULTIMATELY, YOU KNOW, MY DECISION MAKING WASN'T PROPER.
I FEEL TERRIBLE THAT THEY HAVE TO SORT OF DEAL WITH MYHONESTLY, FOR THIS PAST TWO YEARS.
Woman: [ Voice breaking .]
I JUST -- I FEEL BAD FOR HIM.
AS MUCH AS WE ALL ARGUE WITH EACH OTHER, AND -- HE'S HELPED ME BEFORE.
HE'S ONE OF US.
Lemonis: SAL PUT A LOT ON THE LINE.
THIS IS A NEW DAY.
WE SHOULD BE HAPPY.
WE'RE GONNA MOVE FORWARD.
WE'RE GONNA KICK BUTT TOGETHER.
-EVERYBODY READY? -Fabio: LET'S GO.
Lemonis: OKAY.
LET'S GO.
LET'S GO TO WORK.
[ APPLAUSE .]
WHAT IS THE PROCESS TO ACTUALLY FIND NEW CUSTOMERS? THIS IS YOUR DEPARTMENT, RIGHT? Nick: YEAH.
THEY, UHWE GO -- WE USE THIS PROGRAM -- WELL, NOT PROGRAM.
IT'S yellowpages.
com.
WE GO ON TO THAT.
AND WE'RE STILL CALLING ON THE? Sal: YEAH, WE CALL SPECIFIC AREAS -- Nick: NO, I'M SAYING THE OTHER PROGRAM.
I MEAN, BASICALLY, THE BIGGES TOOL WE USE IS yellowpages.
com.
Lemonis: WHO ARE SOME OF THE BIGGER CLIENTS THAT WE HAVE? LIKE, WHO'S OUR BIGGEST CLIENT? Nick: I'M TRYING TO THINK.
Lemonis: THERE'S GOT TO BE ONE THAT YOU CAN SAY, "I KNOW IT'S BIG, AND I CAN COUNT ON THEM.
" Nick: I CAN'T THINK OF ONE RIGHT NOW.
Lemonis: NAME SOME.
JUST GIVE ME A FEW NAMES.
Nick: [ CHUCKLES .]
UH Lemonis: YOU PAY HIM HIS COMMISSION ON A MONTHLY BASIS, RIGHT? Nick: I JUST GET A SALARY.
Lemonis: WHETHER YOU SELL SOMETHING OR NOT? Nick: RIGHT.
Lemonis: WHERE'S FABIO AT? -Sal: HE'S DOWNSTAIRS.
-Nick: YEAH.
Lemonis: NICK, CAN YOU GET FABIO FOR ME? Nick: YEAH, YEAH, SURE.
Lemonis: NICK IS THE HEAD OF SALES, AND HE DOESN'T EVEN SEEM TO UNDERSTAND WHO HIS CLIENTS ARE.
MORE IMPORTANTLY, HE DOESN' EVEN SEEM TO KNOW HOW TO DRUM UP ANY NEW BUSINESS.
I MEAN, THIS IS A REAL PROBLEM.
THE QUESTION, FABIO, IS, WHO IS THE BIGGEST ACCOUN FOR THIS BUSINESS? Fabio: I ACTUALLY JUST HAD ONE THAT'S CALLED SKYLINE RESTORATION, WHICH IS A BUDDY OF MINE THAT -- SHIRTS, IT WAS ABOUT 8,000 TEES.
AND HE GAVE ME HIS OTHER COMPANY RECENTLY, WHICH IS ABOUT 500 SHIRTS, AND THE BUSINESS IS GONNA BUILD FROM THERE.
CON EDISON -- I HAVE BUDDIES THAT WORK FOR CON EDISON.
-Lemonis: THE ELECTRIC COMPANY? -Sal: YEAH, THE ELECTRIC.
Fabio: DELTA, ANOTHER ONE.
-Lemonis: SOMEBODY YOU KNEW? -Fabio: [ LAUGHS .]
IT ACTUALLY IS A GOOD FRIEND OF MINE.
Lemonis: MAYBE WE NEED TO HIRE SOME SALESPEOPLE.
Nick: WELL, I DON'T KNOW ABOUT THAT.
Lemonis: YOU CAN'T EVEN RATTLE OFF TO ME THE CUSTOMERS THAT YOU HAVE.
Nick: I HAVE A LOT OF RELATIONSHIPS WITH A LOT OF MY CUSTOMERS, AND THEY'LL RECOMMEND ME -- Lemonis: THE RELATIONSHIPS SEEM TO BE COMING FROM HIM.
Nick: NO, BUT I HAVE TONS OF RELATIONS, BUT THEY'RE NO BIG COMPANIES.
Lemonis: HAVE YOU EVER PITCHED TO ANY BIG CUSTOMERS? Nick: UH OFF THE TOP OF MY HEAD, NO.
Lemonis: SALES IN THIS COMPANY ARE EVERYTHING, AND AFTER SEEING THAT NICK DOESN'T REALLY EVEN KNOW WHO HIS CUSTOMERS ARE, I WANT TO SEE HIM IN ACTION.
I'M TAKING HIM TO A LOCAL BUSINESS TO SEE WHAT HIS SALES PITCH IS LIKE.
-GOOD MORNING.
-Jonah: GOOD MORNING.
-Lemonis: JONAH? -Jonah: YES.
HI.
Lemonis: I'M MARCUS.
HOW ARE YOU? Nick: HOW ARE YOU DOING? NICK MEOLA, ARTISTIC STITCH.
Jonah: HI.
Nick: IT'S NICE TO BE AT YOUR COMPANY TODAY.
Jonah: SO, WHAT CAN WE DO FOR YOU? Nick: WE'RE HERE TODAY -- WE'D LIKE TO SELL YOU SOME PRODUCTS FOR YOUR COMPANY.
Jonah: OKAY.
Nick: YEAH, IF YOU'RE INTERESTED, WE CAN SHOW YOU A FEW SAMPLES OF WHAT WE HAVE.
Lemonis: NICK DOESN'T UNDERSTAND THE BASICS OF SELLING.
THE FIRST THING YOU DO IS TRY TO CREATE SOME SOR OF COMMON GROUND WITH PEOPLE -- ASK THEM A LITTLE BIT ABOU THEMSELVES, BE A GOOD LISTENER.
Nick: THE MOST POPULAR GOLF SHIRT THAT WE CARRY IS A PIQUé POLO.
Lemonis: THE FIRST THING NICK DOES -- HE TAKES A SHIR OUT OF HIS BAG.
Nick: ONCE YOU CAN TELL ME EXACTLY THE QUANTITY THAT YOU'RE LOOKING FOR, THEN I CAN GIVE YOU A PRETTY STERN PRICE.
THE FIRST TIME, THERE'S A CHARGE TO DIGITIZE YOUR LOGO.
Lemonis: NICK'S WAY AHEAD OF HIMSELF HERE.
YOU DON'T BRING UP PRICE AS YOUR OPENING LINE.
YOU HAVE TO ESTABLISH A RAPPORT.
YOU HAVE TO UNDERSTAND WHAT THEIR NEEDS ARE, AND THEN YOU BRING UP THE PRICE.
ONE OF THE THINGS THAT WE WANTED TO COME AND TELL YOU IS THAT WE KNOW THAT THIS ISN'T A PRICE GAME.
WE DON'T WANT TO SELL JUST ON PRICE, RIGHT? Nick: YES.
SO, AT THE END, WE WANT YOU TO BE HAPPY, AND SO, I MEAN, IF -- I WOULD [ MUTTERS .]
I MEAN, IF WE CAN DO BUSINESS TOGETHER, YOU KNOW, I -- I JUST -- I CAN'T DO IT RIGHT NOW.
I JUST -- I'M -- I NEED TO -- I'M JUST I JUST -- I CAN'T CONCENTRATE.
I'M JUST A LITTLE NERVOUS.
[ BREATHES DEEPLY .]
Lemonis: I FEEL LIKE YOU'RE LYING TO ME ABOUT SOMETHING.
Sal: ALL RIGHT.
YOU KNOW WHAT? Lemonis: YOU TOLD ME THAT THIS WAS FOR CONSTRUCTION.
YOU LIED TO ME.
-Sal: I LIED TO YOU? -Lemonis: YEAH.
I MEAN, THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Nick: I WOULD LOVE TO HELP YOU GUYS OUT.
I MEAN, IF WE CAN DO BUSINESS TOGETHER, YOU KNOW, I -- I JUST -- I CAN'T DO IT RIGHT NOW.
I JUST -- I'M -- I NEED TO -- I'M JUST Lemonis: YOU WANT ME TO TAKE A CRACK AT IT? Nick: OKAY.
Lemonis: HE'S TOUGH, BUT I'LL GIVE IT A SHOT, OKAY? HOW LONG HAVE YOU BEEN IN BUSINESS HERE? Jonah: WELL, THE ORGANIZATION'S BEEN AROUND SINCE 1928.
Lemonis: WOW.
AND YOU'VE BEEN HERE THE WHOLE TIME? Jonah: NO.
[ LAUGHS .]
I'M NOT THAT OLD.
[ LAUGHS .]
NO, ACTUALLY, I'VE BEEN HERE FOR 40 YEARS.
Lemonis: WHAT'S INTERESTING IS, ARTISTIC'S BEEN AROUND FOR A LONG TIME, AS WELL, AND WE KNOW THAT THESE SHIRTS AND THESE HATS ARE COMMODITIES -- YOU CAN GET THEM ANYWHERE.
SO WE'RE GONNA MAKE SURE THAT THE PRICE IS RIGHT, BUT WE'RE GONNA SERVICE THE ACCOUNT.
WHEN I LOOK AT IT, I JUS LOOK AT A BASIC SWEATSHIRT.
I LOOK AT YOUR T-SHIRT, AND THIS IS KIND OF IN A SIMILAR LINE.
IS THIS QUALITY SOMETHING THAT MEETS YOUR STANDARDS? Jonah: THE PRODUCTS SEEM TO BE WELL-MADE.
Lemonis: AND IF WE END UP DOING BUSINESS TOGETHER, ARE THERE ANY OTHER FIREHOUSES THAT YOU HAVE RELATIONSHIPS WITH THAT YOU CAN INTRODUCE ME TO? Jonah: SURE CAN, AND THERE IS A ORGANIZATION CALLED THE FIREMEN'S ASSOCIATION WITHIN THE CITY OF NEW YORK.
Lemonis: HOW BIG IS THA ORGANIZATION? QUITE LARGE? Jonah: WE'RE TALKING ABOUT 200, 300 MEMBERS.
Lemonis: GOOD.
GOOD.
I APPRECIATE YOUR SUPPORT.
-Jonah: AND THANK YOU VERY MUCH.
-Lemonis: THANKS VERY MUCH.
HAVING A RELATIONSHIP WITH ONE SMALL BUSINESS IS GONNA LEAD TO HAVING A RELATIONSHIP WITH OTHER BUSINESSES.
NOT ONLY CAN NICK NOT TELL ME ANY OF THOSE ACCOUNTS, BUT HE DOESN'T LOOK LIKE HE KNOWS HOW TO FOSTER THEM, EITHER.
Nick: I'M NOT SAYING I DID GREAT, BUT I MEAN, WHEN I RELAXED, YOU KNOW Lemonis: I WOULD SAY IT WAS, UHNOT GOOD.
IT WAS NOT GOOD.
Nick: I WOULD HAVE TO AGREE WITH YOU ON THAT.
Sal: HEY, GUYS.
HOW WE DOING WITH THIS JOB? Fabio: WELL, IT'S COMING ALONG.
WE GOT IT STARTED NOW, SO WE SHOULD BE GOOD.
Sal: ALL RIGHT.
Lemonis: HEY, SAL.
LET ME GRAB YOU OUTSIDE FOR A MINUTE.
Sal: SURE.
Lemonis: AFTER SEEING NICK'S PERFORMANCE AT THE FIREHOUSE, OR LACK OF PERFORMANCE, I NEED TO TALK TO SAL ABOUT NICK.
HE'S MAKING OVER $100,000 A YEAR IN SALARY.
SOMETHING'S GONNA CHANGE.
I'M CONCERNED THAT THE GUY THAT'S LEADING THE SALES ORGANIZATION DOESN'T UNDERSTAND THE BASIC FUNDAMENTALS OF A SALES PRESENTATION, SO WE'RE GONNA HAVE TO MAKE SOME ADJUSTMENTS THERE.
Sal: OKAY.
ALL RIGHT.
-Lemonis: HEY.
-Nick: HI.
HOW ARE YOU? Lemonis: GOOD.
I THOUGHT MAYBE WE COULD CHAT FOR ONE MINUTE.
Nick: SURE, SURE.
-Lemonis: THE THREE OF US.
-Nick: YEAH.
Lemonis: UM YOU KNOW, THERE'S NO QUESTION THAT YOU PUT YOUR HEAR AND SOUL INTO WORKING Nick: RIGHT.
Lemonis:BUT I'M A BIG BELIEVER IN WORKING SMARTER, -NOT NECESSARILY HARDER.
-Nick: RIGHT.
Lemonis: AND IN THE PAST, YOU'VE BEEN COLLECTING A SALARY THAT REALLY ISN' CONNECTED TO WHAT YOU SELL -- IT'S WHETHER YOU SELL OR NOT, YOU COLLECT THE SALARY.
AND SO, WE NEED TO MOVE YOU ON TO A DIFFERENT PAY PLAN, SO I'M GONNA PUT YOU ON A 100% COMMISSION PLAN.
Nick: NO, I KNOW I CAN DO IT.
IT'S JUST ABOU REFINING MYSELF A LITTLE BIT.
Lemonis: AND WE'RE GONNA HELP YOU ALL ALONG THE WAY AND GIVE YOU ALL THE RESOURCES THAT YOU NEED.
-Lemonis: ALL RIGHT, THANK YOU.
-Nick: I REALLY APPRECIATE IT.
Lemonis: WALK ME THROUGH, FABIO, HOW YOU THINK THE LAYOUT SHOULD BE.
WHERE DOES THE PRODUCTION HAPPEN? Fabio: RIGHT HERE.
SMACK IN THE CENTER, IT'S GOT TO BE.
Lemonis: SO, THERE'S PRODUCTION.
I'M MAPPING OUT A PLAN TO EXPAND THE BUSINESSES THE PRODUCE REVENUE AND START TO ELIMINATE THE ONES THAT ARE CREATING DRAG.
SO I'M GONNA EXPAND THEIR SILK-SCREENING AND EMBROIDERY BUSINESS, AND NOT ONLY AM I GONNA INCREASE THEIR CORPORATE SALES, BUT I ALSO WAN TO CREATE A RETAIL SPACE WHERE PEOPLE CAN COME IN AND CREATE THEIR OWN CUSTOM SHIRTS AND HATS.
WHEN I THINK ABOUT THIS PLACE, I FEEL LIKE WE'RE UNDERUTILIZING THE ASSETS.
WE HAVE THE MACHINERY, WE HAVE THE SILK SCREENING, WE HAVE THE EMBROIDERY, AND WE HAVE THE FACILITY.
AND SO I'M GONNA TRY TO CREATE A BIT OF AN ARTIST SECTION HERE.
THINK HOW COOL THIS WILL BE -- ARTISTS WILL BE ABLE TO COME IN HERE AND DESIGN THEIR OWN CLOTHING.
BUT I WANT TO CREATE A RETAIL CLOTHING LINE, SO HATS, SWEATSHIRTS, HOODIES, BAGS, T-SHIRTS.
MAYBE HAVE I REPRESENT QUEENS.
SO I HAVE THIS IDEA FOR A NAME CALLED QUEENS VIBE.
Fabio: I LOVE IT.
-Lemonis: IT'S UP TO YOU.
-Fabio: YEAH, I GOT THIS.
-Lemonis: ALL RIGHT, BUDDY.
-Fabio: THANK YOU.
Lemonis: ONE OF THE THINGS THAT I WANTED TO DO -- AND I DON'T KNOW IF GIOVANNA CAN HELP US WITH THIS -- IS I WANTED TO SEE ON THAT LIST THAT YOU GAVE ME -THE CREDIT-CARD STATEMENTS -Giovanna: I CAN DO THAT.
Lemonis: BECAUSE WHEN I SEE TARGET, IT SAYS CONSTRUCTION.
I DON'T KNOW WHAT YOU'RE BUILDING FROM TARGET, SO I WANT TO SEE WHAT ACTUALLY WENT THROUGH THOSE CREDIT CARDS.
CAN YOU PRINT IT OUT? Giovanna: YEAH, I'M TRYING TO -- Lemonis: OKAY, LET ME GO GET IT.
HERE, COME HERE, GUYS.
SO, FOR EXAMPLE, SAL'S CREDIT CARD -- MERCHANDISE? Sal: THIS IS WHAT WE USE TO PAY FOR CLOTHING AND STUFF THAT'S IN HERE.
Lemonis: BUT YOU TOLD ME THE OTHER DAY IT WAS CONSTRUCTION DEBT.
-IT SAYS IT RIGHT HERE.
-Sal: UM Lemonis: JOANNE'S CREDIT CARD -- TARGET, CONSTRUCTION DEBT.
Sal: YEAH, WELL, I THINK THAT'S, YOU KNOW Lemonis: WHY WOULD TARGE BE CONSTRUCTION? Sal: NO, IT'S NOT.
IT'S HER LIVING EXPENSES THAT SHE WAS USING TO LIVE.
GOT TO GO BUY THE KIDS' CLOTHES, GOT TO GO TO THE SUPERMARKET Lemonis: LIKE A PERSONAL CREDIT CARD? Sal: YEAH.
Lemonis: AND SO WHY WOULD YOU LIST IT UNDER CONSTRUCTION? Sal: WELL, I DIDN' LIST THAT UNDER THAT.
Lemonis: WILLIAMS-SONOMA, SLATE, CITI SIMPLICITY, CITI CARD BANK.
THIS IS ALL CONSTRUCTION DEBT, AS WELL? Sal: UMI'M NOT SURE.
THAT I HAVE TO LOOK AT.
Lemonis: DO YOU HAVE ANY PERSONAL LIVING EXPENSES ON THESE CARDS? Sal: I'M SURE THERE IS.
WHAT'S THE BIG DEAL ABOUT THAT, HONESTLY? Lemonis: I AGREED TO $660,000 BASED ON WHAT YOU TOLD ME.
NOW I'M FINDING OUT, LIVING EXPENSES REALLY FOR THIS -- THE TARGET CARD REALLY WASN'T CONSTRUCTION, AND SO MY NUMBER REALLY SHOULDN'T BE $660,000.
Sal: I'M NOT 100% SURE WHAT -- THE CARDS ARE NOT EVEN ACTIVE.
Lemonis: BUT YOU WERE 100% SURE TO TELL ME THAT IT WAS CONSTRUCTION DEBT.
YOU PUT THIS PAPER TOGETHER.
Sal: YEAH, I MEAN, WE NEEDED COMPUTERS AND STUFF.
IT COULD BE.
I'M NOT SAYING NO.
Lemonis: WASABI JAPANESE STEAKHOUSE -- $230.
Sal: I WENT OUT WITH MY FAMILY.
Lemonis: ON THE COMPANY CREDIT CARD? Sal: ON THE COMPANY CREDIT CARD.
Lemonis: NOW I'M PAYING FOR YOUR MEALS? THIS ISN' SITTING WELL WITH ME.
AND I FEEL LIKE YOU'RE LYING TO ME ABOUT SOMETHING.
-Sal: I'M NOT.
-Lemonis: BUT I FEEL LIKE THA BECAUSE, LITTLE BY LITTLE, THE STORY KEEPS CHANGING.
NOW WOULD BE A GOOD TIME, RIGHT THIS MOMENT, TO GET EVERYTHING CLEARED UP ON THIS PAPER.
THIS IS THE RIGHT MOMEN RIGHT NOW BECAUSE IF NOT, I'M NOT GONNA LEAVE AND NEVER COME BACK.
Sal: ALL RIGHT, YOU KNOW WHAT? GUYS, COME ON.
IT'S -- I KNOW IT'S ALL FOR THE SHOW, BUT -- Lemonis: NO, IT'S NOT FOR THE SHOW, SAL.
Sal: UH, IT IS.
Lemonis: YOU TOLD ME THAT THIS WAS FOR CONSTRUCTION.
YOU LIED TO ME.
-Sal: I LIED TO YOU? -Lemonis: YEAH.
I MEAN, THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Lemonis: IF YOUR BUSINESS IS IN TROUBLE AND YOU NEED MY HELP, Lemonis: YOU TOLD ME THAT THIS WAS FOR CONSTRUCTION.
YOU LIED TO ME.
-Sal: I LIED TO YOU? -Lemonis: YEAH.
I MEAN, THE NUMBERS AREN'T ADDING UP HERE.
Sal: I'M THIS CLOSE TO GOING HOME.
Lemonis: YOU TELL ME SOMETHING AND THEN YOUR STORY CHANGES, I HAVE A PROBLEM WITH IT.
IT HAS TO DO WITH INCONSISTENCIES IN YOUR NUMBERS.
-Sal: YOU'RE HELPING ME OUT -Lemonis: RIGHT.
Sal: WHICH, AT THE END OF THE DAY, I APPRECIATE THAT, AND IF THERE'S INCONSISTENCIES, I'LL BE MORE THAN HAPPY TO GO OVER THEM.
Lemonis: OKAY.
WHEN PEOPLE ARE BURIED IN DEBT, THEY SOMETIMES MAKE DECISIONS THAT THEY SHOULDN'T MAKE.
HE WAS DESPERATE, HE WAS IN A BAD PLACE.
YES, IT'S WRONG, BUT I'M MORE PISSED THAT HE LIED ABOUT IT.
I KNOW THAT YOU'VE BEEN IN A LOT OF FINANCIAL DURESS.
IF YOU WOULD'VE TOLD ME FROM THE BEGINNING, "IT'S REALLY NO CONSTRUCTION DEBT, I WAS TRYING TO SURVIVE," I WOULD GET IT.
I WOULD UNDERSTAND.
HONEST TO GOD, I WOULD UNDERSTAND.
YOU CANNO MISREPRESENT STUFF WITH ME.
Sal: OKAY.
Lemonis: FABIO, CAN I MEET THESE GUYS? HOW ARE YOU DOING? I'M MARCUS.
Man: HOW ARE YOU DOING? Lemonis: LOOK, QUEENS HAS A REALLY COOL, HIP VIBE.
THAT'S WHY I'M NAMING THE BRAND QUEENS VIBE.
BUT THE SPACE AND THE BUSINESS NEED TO REFLECT THAT BRAND.
DO YOU GUYS MIND SKETCHING OUT SOME IDEAS? Man: THAT'S COOL.
I DON'T MIND IT.
Lemonis: SO I HAD FABIO BRING IN THE BES GRAFFITI ARTISTS HE COULD FIND TO REALLY LIGHTEN UP THE PLACE AND MAKE IT FUN AND REFLECT QUEENS THE WAY IT REALLY SHOULD BE.
AND WHILE WE'RE STUCK WITH THIS $80,000 BASKETBALL COUR THAT'S MAKING NO MONEY, WE'RE GONNA MAKE THE BES WITH WHAT WE HAVE.
THIS IS GONNA BE WHERE THE CUSTOM PRINTING AREA IS.
THE KIDS OR INDIVIDUALS WILL DRAW WHAT THEY WANT.
THEY'LL COME HERE, IT'LL GET SCANNED IN, AND THEN IT'LL COME OUT RIGHT THERE.
I PURCHASED A DIRECT-TO-GARMEN PRINTER FOR $27,000.
I DID THIS SO THAT PEOPLE CAN COME IN AND DESIGN THEIR OWN PRODUCTS, WHETHER IT'S LOCAL ARTISTS WHO WANT TO STAR THEIR OWN CLOTHING LINE OR IT'S KIDS WHO JUST WAN TO COME IN AND HAVE SOME FUN.
Sal: I'M GONNA SET UP THE DESIGN CENTER RIGHT HERE.
Lemonis: OUR PRIMARY BUSINESS IS EMBROIDERY AND SILK SCREEN.
THAT'S WHERE WE MAKE THE BULK OF OUR MONEY.
BUT ALL OF THESE RECENT CHANGES GET US BACK TO OUR FOCUS.
Sal: LOOKS GOOD.
Lemonis: GOOD MORNING, BUDDY.
-Sal: GOOD MORNING, MARCUS.
-Lemonis: HOW ARE YOU? Sal: GETTING EVERYTHING FIGURED OUT HERE.
Lemonis: SO, SAL, THERE'S A COUPLE THINGS THAT I WANTED TO GET ACCOMPLISHED TODAY.
ARE THERE ANY OTHER THINGS PRESSING WE NEED TO KNOW ABOUT? Sal: THE TAXES.
Lemonis: THE REAL-ESTATE TAXES? Sal: HE WAS JUST HERE ASKING FOR THEM.
-Lemonis: WHO WAS HERE? -Sal: THE LANDLORD.
Lemonis: WHAT DID HE SAY? Sal: I TOLD HIM I WAS GONNA HAVE THE TAXES READY FOR HIM TODAY.
HE WAS UPSET ABOUT IT.
Lemonis: HOW MUCH IS THAT? Sal: $52,000 AND CHANGE, I THINK IT IS.
Lemonis: AND SO THAT'S PAST DUE AS WELL? -Giovanna: MM-HMM.
-Sal: YES.
Lemonis: CALL HIM.
TELL HIM TO COME BACK.
Sal: OKAY.
[ Ringing .]
MIKE: Hello? Lemonis: HEY, MIKE.
THIS IS MARCUS AND SAL OVER AT ARTISTIC STITCH.
HOW ARE YOU? YEAH, I'M SAL'S NEW PARTNER, AND -- WELL, THAT'S THE REASON FOR MY CALL, IS TO LET YOU KNOW THA AND ALSO TO LET YOU KNOW THAT I HAVE THE CHECK FOR THE TAXES FOR YOU.
IT'S $52,000.
HOW MUCH IS IN ARREARS? SIR, IS IT POSSIBLE THA JUST YOU AND I COULD MEET FOR A FEW MINUTES? MIKE: All right.
I'll stop by on the way back.
Lemonis: THANK YOU, SIR.
I HAVE TO JUST TELL YOU, THIS IS LIKE A RECURRING THEME.
PEOPLE FEEL LIKE THEY'RE NOT GETTING THE FULL STORY.
AND ARE WE PAST DUE ON THE RENT AS WELL? HE SAID WE'RE IN ARREARS.
WHAT ARE WE PAST DUE ON? -Sal: YOU KNOW, SO, HE -- -Lemonis: WHAT'S THIS? -IS THIS CERTIFIED? -Sal: YES.
Lemonis: WHAT IS IT? Sal: IT'S BASICALLY TELLING ME WHAT I OWE.
Lemonis: SO, YOU ACTUALLY OWE HIM $120,000? THIS IS A LOT OF MONEY.
Sal: I JUST DIDN'T WAN YOU TO GET INVOLVED IN SOMETHING LIKE THIS UNTIL -- Lemonis: I HAVE FULL FINANCIAL CONTROL.
Sal: NO, AND I AGREE ON THAT.
Lemonis: SO, IF WE'RE PARTNERS, I NEED TO KNOW ABOUT THIS KIND OF STUFF.
Sal: RIGHT, BUT HAVEN'T DISCUSSED EXACTLY WHAT NEEDED TO BE DONE.
Lemonis: AY-YI-YI, SAL.
HE'S TOLD ME FROM THE BEGINNING THAT WE OWE THE LANDLORD $52,000.
I NOW COME TO FIND OU THAT WE OWE HIM $120,000.
I'M RUNNING OUT OF PATIENCE.
Sal: OH, BOY.
I FEEL LIKE MY LIFE IS JUST TUMBLING.
Lemonis: HAVE YOU CAUGHT HIM LYING A BUNCH OF TIMES, AS WELL? Mike: I CATCH HIM ALL THE TIME.
IT'S NOW CRIMINAL COURT.
HIS FINE IS A CRIMINAL MATTER.
Lemonis: MIKE, I'M MARCUS.
NICE TO MEET YOU.
THANK YOU FOR COMING.
I HAVEN'T BEEN GETTING STRAIGHT ANSWERS FROM SAL, SO I WANTED TO MEE WITH THE LANDLORD TO GE A DIFFERENT PERSPECTIVE ON WHAT SAL'S REALLY LIKE TO DEAL WITH.
DOESN'T IT SEEM ODD TO YOU THAT THERE'S ALWAYS A DISCONNECT IN HIS STORY? Mike: I FIND YOU'RE NEVER GONNA GET THE TRUTH.
Lemonis: HAVE YOU CAUGHT HIM LYING A BUNCH OF TIMES, AS WELL? Mike: I CATCH HIM ALL THE TIME.
Lemonis: WHY DOES HE DO THAT? Mike: HE DOESN'T DO IT MALICIOUSLY, BUT THERE'S A LITTLE LYING IN THERE, THERE'S A LITTLE -Lemonis: EXAGGERATION? -Mike: EXAGGERATION.
WHY CAN'T HE GE HIS C.
OF O.
? Lemonis: HE DOESN'T HAVE HIS CERTIFICATE OF OCCUPANCY HERE? -Mike: NO, NOT TO MY KNOWLEDGE.
-Lemonis: HOW IS HE OPERATING? Mike: HE'S OPERATING.
SO, NOW I GO A CRIMINAL-COURT VIOLATION FOR THE FIRE DEPARTMEN BECAUSE HE NEVER FIXED WHAT HE WAS SUPPOSED TO FIX.
Lemonis: HAS HE NOT PASSED THE FIRE INSPECTION? Mike: THEY ALWAYS FAIL HIM.
MY NAME IS ON THERE.
HIS FINE IS A CRIMINAL MATTER.
Lemonis: IS HE IN JEOPARDY OF HAVING THE RIGHT TO BUY THIS BUILDING FROM YOU RIGHT NOW? Mike: WHAT DO YOU THINK? Lemonis: YEAH.
SAL IS $120,000 PAST DUE WITH HIS LANDLORD, AND HE'S ALSO VIOLATED CERTAIN PROVISIONS IN HIS LEASE.
THE BIGGEST ONE IS THAT HE DOESN'T HAVE A CERTIFICATE OF OCCUPANCY.
IF WE DON'T GE THIS CERTIFICATE OF OCCUPANCY AND THE LANDLORD CLOSES THE BUILDING DOWN AND HE PULLS THE OPTION AWAY, THE MONEY THAT I'VE SPEN IS GONE.
THERE'S NO WAY TO GET THAT MONEY BACK.
-HEY, SAL.
-Sal: YEAH? Lemonis: LET ME GRAB YOU FOR A SECOND.
SO, THE LANDLORD SAYS THAT YOU STILL DON'T HAVE A CERTIFICATE OF OCCUPANCY HERE.
Sal: WE'RE USING THE OLD CERTIFICATE BECAUSE WE HAD A PREVIOUS C.
O.
-- IT WAS MANUFACTURING, SO IF YOU HAVE MANUFACTURING, YOU BASICALLY COULD USE THE BUILDING.
Lemonis: SO, ARE WE CLEAR TO BE A MANUFACTURER BUT NOTHING ELSE? Sal: [ STAMMERS .]
Lemonis: CERTIFICATE OF OCCUPANCY MEANS THAT THE CITY IS SAYING YOU ARE NOT PERMITTED TO HAVE PEOPLE IN THE BUILDING BECAUSE IT IS NOT APPROVED BASED ON FIRE CODES OR ELECTRICAL CODES.
HE WANTS TO TERMINATE YOUR RIGH TO THE BUY THE BUILDING.
Sal: YEAH, WELL, WHY WOULD HE -- WHY WOULD HE -- Lemonis: HE SAID HE GOT A NOTICE FOR SOME CRIMINAL CHARGES.
Sal: NO, AND I HAVE THAT NOTICE.
IT'S NOT A CRIMINAL CHARGE, AND I THINK IT'S -- -Lemonis: CAN I SEE IT? -Sal: YEAH, SURE.
Lemonis: IT SAYS "NEW YORK CRIMINAL COURT.
ARE YOU INSANE?" Sal: YEAH, THAT'S WHAT -- HE WROTE THAT.
Lemonis: OKAY, SO HE GETS A NOTICE.
YOU CAN SEE FROM HIS PERSPECTIVE.
WHAT IS THIS FOR? WHAT IS THIS COURT ORDER FOR? Sal: THIS IS FOR THE FIRE ALARM, WHICH IS -- Lemonis: NOT IN COMPLIANCE? Sal: RIGHT, WHICH NOW IT'S READY FOR THE NEX INSPECTION TO COME IN.
Lemonis: HE'S BEING TOLD THAT HE HAS TO GO DEFEND HIMSELF IN CRIMINAL COURT.
I MEAN, I KNOW WHY THE GUY'S OFF THE CHARTS.
HE COULD GO TO JAIL.
Sal: I COULD CALL MY ARCHITEC AND SEE HOW WE COULD FILE FOR THE INSPECTIONS.
SHOULD WE CALL NOW? Lemonis: YEAH.
Sal: CALL WALTER, WHICH IS THE ARCHITEC WITH THIS VIOLATION HERE.
AND I'M SO CONFUSED WITH ALL THIS.
Lemonis: I DON'T WAN TO HEAR THAT YOU'RE CONFUSED.
THIS IS YOUR PRIMARY RESPONSIBILITY, AND SO YOU SHOULD BE DOING NOTHING ELSE THAN FIGURING HOW TO KEEP THE COPS FROM LOCKING THE DOOR.
AND YOUR LANDLORD COULD GO TO JAIL.
-DO YOU UNDERSTAND THAT? -Sal: YES.
Lemonis: AND SO WHY ISN' THIS THE MOST IMPORTANT THING YOU'RE WORKING ON RIGHT NOW? Sal: I UNDERSTAND WHAT YOU'RE SAYING.
Lemonis: PLEASE.
I DON'T WANT HIM TO GO TO JAIL OR THE PLACE TO GET LOCKED.
Sal: OKAY.
Lemonis: I KNOW SAL, DEEP DOWN, IS NOT A BAD GUY, BUT HE'S ALWAYS LYING TO ME ABOUT SOMETHING.
I'VE HAD ENOUGH.
I NEED TO FIGURE OU WHAT IT IS THAT'S ACTUALLY AT THE ROOT OF THE PROBLEM.
WELL, ONE OF THE THINGS THAT I HAVE TO REALLY GET MY HEAD AROUND IS WHY YOU'RE NO MORE CLEAR WITH ME ABOUT STUFF, 'CAUSE SURPRISES Sal: OH, NO, THEY DON'T -- Lemonis: THEY DON' WORK WELL IN BUSINESS.
Sal: THAT WAS THE FEAR, AND I FELT THE CONSEQUENCES TO ME PERSONALLY WERE SO, UH, LARGE FOR THE COMPANY TO NOT HAVE YOU PART OF IT, THAT THE FEAR ITSELF IS WHAT DIDN'T MAKE ME COME OUT.
Lemonis: GOING FORWARD, JUST SO YOU KNOW, -I CAN DEAL WITH BAD NEWS.
-Sal: RIGHT.
I CAN'T DEAL WITH NOT KNOWING NEWS.
Sal: NOT KNOWING, I AGREE.
Lemonis: DESPERATE PEOPLE DO DO DESPERATE THINGS, AND THE FACT THAT SAL WAS WILLING TO BE VULNERABLE AND SAID, "I'M LYING BECAUSE I'M SCARED YOU'RE GONNA LEAVE," MEANT A LOT TO ME.
YOU KNOW WHA ONE OF THE CHALLENGES IS WITH LYING IN BUSINESS? NUMBERS MOVE FAST, AND THAT'S THE EASIEST PLACE TO GET CAUGHT, IS 'CAUSE NUMBERS -- THEY DON'T LIE.
Sal: NO, YOU'RE RIGHT.
Lemonis: I JUST NEED TO KNOW THAT IT'S NOT GONNA CONTINUE TO HAPPEN, OKAY? -Sal: OKAY.
-Lemonis: ALL RIGHT.
Lemonis: THE LAST FEW MONTHS AT ARTISTIC STITCH HAVE BEEN A LOT OF WORK BUT THINGS ARE PROGRESSING WELL.
FOR THE RETAIL STORE, WE'VE CHANGED THE NAME TO QUEENS VIBE, AND WE'RE LANDING SOME VERY LARGE ACCOUNTS.
THAT ONE LOOKS GOOD.
THE LOBBY HAS BEEN TRANSFORMED INTO A RETAIL STORE, FEATURING OUR VERY OWN QUEENS VIBE PRODUCT LINE, AND IT'S REALLY STRUCK A CHORD WITH THE LOCALS.
Sal: THANK YOU VERY MUCH.
Lemonis: HALF OF THE BASKETBALL COUR HAS BEEN REPURPOSED FOR A DESIGN CENTER.
NOW, YOU KNOW THAT WHATEVER YOU DRAW IS GONNA GO ON THE MACHINE AND YOU'RE GONNA BE ABLE TO WEAR IT? Girl: YEAH.
-Lemonis: IS THAT COOL? -Girl: YEAH.
Lemonis: IT FEELS REALLY GOOD TO WATCH KIDS COME HERE AND DRAW THINGS OU AND SEE THEM MAKE THEIR OWN T-SHIRTS.
IT'S LIKE YOU COULD WEAR IT TO BED.
Girl: YEAH.
Lemonis: IN ADDITION TO THE ORIGINAL $660,000, I'VE SPENT OVER $100,000 ON THIS RENOVATION, AND WHILE THE EARLY RETURNS ARE PROMISING, WE'RE DEFINITELY NOT OUT OF THE WOODS.
I THINK THE EFFOR AND THE INTENSITY OF WORK, I'LL GIVE YOU GUYS AN A-PLUS, BUT YOU HAVE TO FOLLOW THE PLAN.
AS FOR SAL, I FEEL LIKE HE'S MADE SOME PROGRESS.
-Fabio: IT'S LINED UP GOOD.
-Sal: YEAH, IT LOOKS GOOD.
Lemonis: ANYTIME YOU TELL SOMEBODY THAT THEY'VE MADE A LO OF MISTAKES AND THEY PU THEIR FAMILY AT RISK, IT'S A HUMBLING EXPERIENCE.
Sal: QUEENS VIBE, HERE WE COME.
Lemonis: I FEEL LIKE I HAVE A LOT OF WORK LEFT TO DO WITH HIM.
WE'RE NOT OUT OF THE WOODS YET.
YOU KNOW THAT, RIGHT? Sal: NO, NO, NOT AT ALL.
Lemonis: IT'S A WORK IN PROGRESS.
I LEAVE HERE ENCOURAGED, BUT I DON'T LEAVE HERE TOTALLY SATISFIED.
-WE GOT A BRIGHT FUTURE.
-Sal: I'M EXCITED.
Lemonis: LET'S GO.
COME ON.