When Marcus Lemonis got skepticism and pushback from a feisty employee at Windward Boardshop, he loved the passion for the company’s culture and products. Unfortunately, that wasn’t Lemonis’ biggest challenge when “The Profit” landed in Chicago for it’s latest business project.
The company’s main location was a landmark in the city since it opened in 1982 catering to snow and skate boarding enthusiasts. Three young people took it over in 2010, divided equity among them and made decisions that began to bleed them dry. Chris Currier provided all the cash from an inheritance and owned 56% of the stock, Tony Anasenes had 34% and Jess Bell 10%.
The business had expanded to a new location that was losing money each month. Planted in a high-income area it didn’t generate traffic so Lemonis decided to close it. As a quick aside, almost a throw-away moment, Marcus said that while trying to negotiate an escape from the lease he bought the building. The guy’s got a checkbook that doesn’t quit. He had plans for the space, but they weren’t revealed during the episode.
Windward suffered from every typical problem we’ve seen during seasons of “The Profit”. Poor decision making on what to stock, lack of communication from the top, low margins, and no vision of how to expand the concept or product line to get them out of debt. For example, they stocked water boards that cost a fortune with little profit margin. Their women’s line of products (if that’s what you could call a few bikini tops) had high margins with a small inventory. All roads led back to Chris as the decision-maker.
Jess, the only woman in the partnership originally had 20% of the equity, but it got cut in half when she got pregnant and wanted to reduce her hours to 5 days per week. Her pay was cut commensurate with the hours reduction but Chris decided that she wasn’t pulling her weight according to the partnership agreement. She needed to be paid during a three-month maternity leave and he chose to look at that as the store paying for her condition and situation.
Needless to say, Chris had no family, and neither did Tony. Marcus looked at them as if they crawled out from under a rock, having an attitude that may have flown decades ago. In today’s world came off as a mean punishment.
Lemonis decided to invest $500,000 for 50% of the business, dangling an addition $100,000 if dead inventory was liquidated in 30 days. The goal was $200,000, and everyone hustled to make it happen, with Jess in charge. Marcus was impressed.
With his investment the partners’ stakes were halved. Jess’ stake went down to 5%, which didn’t sit well with Marcus. She was the one who had skills that were untapped by Chris and Marcus saw great value in her contribution. He reduced his stake to 40% and distributed the other 10% among the three partners, to get Jess back to 10%.
Lemonis admitted that when all was sad and done, the changes to Windward Boardshop, renamed W 82, was the most extensive renovation on “The Profit”. He had to manage the passion of the employees to keep the business from becoming like Dick’s Sporting Goods or other large retailers of sporting goods. A great architect and design team gutted the main location and once the basement space was added for retail, it doubled in size.
There were separate departments for the main products that gave customers the feel of walking into a small shop dedicated to what they were looking to buy. Shoes and women’s clothing were displayed well and the selection was enormous. The partners had learned what made them money and what didn’t. The new design and feel of the W 82 pleased everyone. A new business with a new attitude was born.
“The Profit” airs Tuesdays at 10 on CNBC. Image credit: CNBC used with permission