With my money and our time. Lemonis if i cant help them fix their process and their relationship. You guys picked this location. Chris yeah. Lemonis you guys did it. This board shop will have to board up its doors. My name is Marcus Lemonis, and i risk my own money to save struggling businesses. Were not gonna wake up every morning wondering if we have a job. Were gonna wake up every morning wondering how many jobs we have to do. Its not always pretty. Everythings gonna change everything. But i do it to save jobs, and i do it to make money. This. Lets go to work. Is the profit. Tony windward, chicago. This is tony. Lemonis in 2010, partners chris, tony, and jess bought windward sports, an iconic chicago retailer with a 30year history and a reputation as the goto store for skateboarders and snowboarders. Chris do you want to print them a restock, jess . Jess yeah. Totally. Lemonis longtime friends and avid snowboarders, the three partners introduced new brands, updated the store, and renamed it windward boardshop. Jess there you go. Have a good day. Lemonis they were off to a great start. After a few years, they decided to double down, taking on a lot of debt to open up a second store, this time in an affluent suburb of chicago. Chris well kill the helmet rack. Lemonis but instead of the new location boosting the overall business, its actually bleeding it dry. Chris we still need to figure out a way to get more people in the store, shopping. Tony yeah. Lemonis profits have evaporated, and now theyre struggling to keep both stores fully stocked. Chris still no boosted boards cause i know we got a lot of customers calling and on the wait list for that, so. Its just been [bleep] lemonis active sports is one of the fastestgrowing segments in the industry, and windwards longtime history should give it a leg up against its competition. So im headed to the original location to check it out. Jess hey. How are you . Lemonis hey, hey. How are you . Jess excellent. [ chuckles ] come on in. Chris you must be marcus. Lemonis i am marcus. Chris im chris. Lemonis chris, how are you . Chris nice to meet you. Lemonis nice to meet you. This place is cool. Chris thank you. Lemonis you know, ive driven by here for years, cause i live in chicago. Chris yeah. Lemonis i think ive seen this place for, like, 20 years. Chris 1982 it opened. Its chicagos original board shop bought it about six years ago now. Lemonis okay. So, when i come in here, do i think about this as a snowboard shop . Chris in the wintertime, yes. In the summertime, we do skateboards, standup paddleboards. Lemonis thats a paddleboard . Chris yeah. Lemonis thats gigantic. Chris [ chuckling ] what . Lemonis like, okay. But how would i even get this there like, on my vw beetle . Jess weve definitely done it. Chris roof rack. This is jess. Lemonis how are you . Jess hi, marcus. Lemonis im marcus. Jess nice to meet you. Lemonis and youre jess . Have you ever been on this thing . Jess oh, yeah. For sure. Yeah. Chris we all go paddle. Yeah. Lemonis what does Something Like this cost . Chris thats 2,000. Lemonis and then, what does it cost you . Chris about a 30 margin on those. Lemonis thats it . Chris yeah . Lemonis paddleboards are gigantic, and theyre taking up a ton of space, a ton of inventory dollars, but a 30 margin . The overall store margin should be at least 50 . How do you do . Im marcus. Tony tony. Lemonis nice to meet you. Tony good to met you. Me and chris actually grew up together. Lemonis what is your role on a daily basis . Tony its Inventory Management and marketing management, i. T. Jess i manage the Highland Park location. Lemonis okay. Chris i do the accounting. I do the buying just the overall general strategy of the business. Lemonis what did you pay for the business . Chris about 200,000. Lemonis you put all the money up . Chris yeah. Lemonis and had you saved it . Chris i inherited a lot of it. Lemonis okay. And then, whats the equity spilt amongst the three of you . Chris so, i have 56 . Lemonis okay. Tony 34 . Jess i have 10 . Lemonis okay. Take me through the rest of the store. The apparels in the middle . Chris yep. Glove wall here. Snowboard wall. Lemonis mens over here. How many square feet is this . Chris about 3,500. And theres a womens side over on the other side. Do you want to. Lemonis yeah. What Womens Department . It looks like an anemic rack of bathing suits, and none of the bottoms or tops match. There was a lot of leftovers, like a flea market. Who buys all this merchandise . Jess chris really heads up all the soft goods. Lemonis why such a little amount dedicated for the female . Chris its only about 10 of our sales. Lemonis is it like a selffulfilling prophecy . We know that females drive more than 50 of the transactions in the marketplace. Well, the store should actually represent that portion of the market, and it doesnt. You want to know why . You have some guy buying product. Chris this is the skateboard section. Lemonis okay. Chris longboards, skateboards. Lemonis that is cool. Kids love this, right . Jess oh, yeah. Lemonis theres this new phenomenon in electric skateboards. Chris yes. This is boosted. So, this is the biggest brand out there. Lemonis and do they sell . Chris we our first year, did about 250,000. Weve been out of these for almost a year now. We have to prepay and buy at least 10 to 15 of them at once. Lemonis yeah, but do you guys not have any working capital to buy inventory . Chris its pretty minimal. Lemonis and so, in the last 12 months, how much revenue is actually missing from this not being here . Chris id say close to 400,000. Lemonis damn. Chris yeah. Lemonis thats a lot. Its a little odd to me that they have no working capital to buy boards, but when i look around this giant showroom, there is merchandise everywhere. So, did they buy the wrong stuff . Im gonna walk around this store and kind of study it some more. Jess okay. Cool. Go for it. Salena salena. Lemonis salena. What do you guys do here . Salena i do everything from sales associate, retail this is my passion, so lemonis it is . Salena yeah. Lemonis im marcus. Cody hey, marcus. How you doing, man . Lemonis nice to meet you. What is your name . Cody cody. Lemonis nice to meet you. You run this basement . Cody yeah. What i do is we do the shipping down here. Lemonis are these online shipping orders youre sending out . Cody yeah. Lemonis how long have you worked here . Cody six going on seven . Lemonis do you love it . Cody i did. Everybody has to do so much that there is no fun time. But i miss that part and the three ps, i guess the fun part. Ive looked into your personal businesses and seen what youve done. And for everything ive researched about you. Lemonis yeah. Cody . I dont know if youre about the businesses anymore. Like, are you just gonna turn this into a glorified chain skateboard store in the malls and stuff . Lemonis are you concerned that, if someone like me, that some monster, got involved, that it would lose its authenticity . Cody you could just come in and say, oh, were just about the dollar now. Lemonis is that what you think about me . Cody i think you have a lot of money, and youre a powerful man, and that is not an easy thing to work with. Lemonis i think youre gonna be surprised. Cody really . Lemonis yeah. Cody is fiercely loyal to the brand. When youre trying to change a business, that can be an impediment. But in most cases, its a real asset to a company. Its like having Brand Ambassadors out in the marketplace. Cody all right, then, marcus. Lemonis all right. Nice meeting you. Cody you too, boss. Lemonis but i wouldnt exactly call that the warmest greeting ive ever received. Okay, that guy was interesting. Jess cody . [ laughs ] lemonis what id love to do is actually meet you guys at the other location. Jess yeah. Chris yeah, sounds good. Lemonis okay. Great. Chris all right. Lemonis hey, chris, theres nobody here. Its empty. Chris yeah. Lemonis when did you open this store . Chris last year. Lemonis so walk me through the logic of how you picked Highland Park, how you picked this location. Chris demographicwise, a more affluent customer the proximity to the lakefront with paddleboard sales made more sense for us to come north. Lemonis money and water dont equal opening up a windward location. Highland park is a suburb of chicago thats got a slightly older demographic to it, and i havent seen anybody ride down the street on a skateboard before. This is cool. What size would i wear . Chris you would probably be a small. Lemonis really . Have you seen the size of my ass . Im gonna go try this thing on. Chris okay. Lemonis i wanted to understand how expensive snowboarding actually was. And one way to do that is to get dressed from head to toe in all the gear. Jess oh, definitely yeah. Lemonis so, this is yeah. Jess all right. Lemonis how are these pants . Jess 250. Lemonis so, whats next after that . Chris jacket. Jess jacket. Lemonis all right. Okay, how much is the jacket . Jess 500 for that guy. Lemonis ah. Okay. How much for the helmet . Jess about 100 bucks. 220 here. Lemonis all right, now what . Chris 200 for snowboard boots. Steady as she goes. Lemonis all right, what else do i need . Chris gloves. Jess 50 bucks. Lemonis okay. Chris this would be the board. 600 for the board, and then the bindings 250. Tony and then on a really cold day, youll need a facemask. Lemonis so, ive just spend 2,200. Chris yes. Lemonis . And im hot as hell. I did not expect it to cost over 2,000. Like, thats a real investment, and to pick snowboarding or skateboarding as almost 90 of the product really limits the number of people thatll walk through the door. What about all the other things that people do outside . How much revenue does this store do a year . Chris 350,000. Lemonis and the margins are. Chris its a 35 margin. Lemonis so the gross profit would be about 100,000. Chris yes. Lemonis you divide that by 12. Thats basically a little over 10,000, and your rent alone is. Chris 13,000. Lemonis so, youre losing money before you pay for anything. Chris yes. Lemonis where did the money come from to open this store . Chris we have an sba loan we took out. Lemonis how much is that . Chris 390,000. Lemonis just for this location . Chris yes. Jess i regret not knowing more about it beforehand. I agreed to open a second location when the idea was brought to me, but what i didnt know is that the location had already been chosen. Lemonis so, you did it on your own . Chris tony was involved with some of it, as well. Jess mmhmm. Lemonis okay. And so why didnt you have a say in it . Jess i dont really know. Lemonis the fact that they didnt include jess its just disrespectful. Let me spend a minute with jess, just so i can understand this store a little better, okay . Jess yeah. Mmhmm. Lemonis whats going on here . Jess i found out when we were signing paperwork, and this guy says i love the location, and i just looked at them, and i said, we have a location . Said it was kind of in place, and i was just either gonna be on board or not on board these are my business partners. Lemonis youre on the team. Jess lets do it. Im on the team, so thats fine. Lets do it. Lemonis how much equity did you say you had in the business . Jess i have 10 . I started with 20 . When i told them that we were gonna have a baby we were all working six days a week, and i told them that, once the baby came, i was wanting to go down to five days a week to have more of, like, a normal schedule. Lemonis did you lower your wage, as well . Jess mmhmm. Lemonis so you lowered your wage because youre working less that i get. Jess correct. Yep. Lemonis i dont understand why your equity would go down. Jess i agreed to it because i really didnt feel that there, you know, was another option. Again, like lemonis in or out . Jess yeah. Yeah. And i had a newborn at home, so what am i gonna do . Lemonis i dont know what choice jess really had. Chris and tony leveraged the situation to get the result that they needed. It really makes me question their ability to be in a partnership with anybody. Id like to go over the financials. How are you feeling . Chris tired. Lemonis yeah . Chris yeah. Lemonis been a long couple years . Chris long six years, yeah. Its been challenging from the start. Lemonis what did you do before this . Chris i started out working with my dad originally. We were brokers, and then my father passed away. This opportunity kind of came up. And so, i inherited that money. Lemonis how did he pass away . Chris he took his own life. Lemonis holy [bleep] man. I cant even begin to think about what that would feel like. Chris yeah. Lemonis . So first of all, im sorry that it happened. Did you do this business with the inheritance . That was the seed money . Chris yeah. In a weird way, its kind of like this is part of him still. Lemonis and thats probably what weighs on you, because you probably think to yourself, this cant fail. Chris yeah. It would feel like another loss, a big loss. Lemonis 100 of the money that opened up this business came from his father. This idea of the business failing creates this illusion for chris that, if the business fails, hes lost his connection with his father. Chris this is through 2016. Lemonis okay. So, in 2010, it did 325,000 in revenue. 2016 2,714,000 so far in revenue so impressive growth. You made 81,000 in 15 and 16. Chris well probably lose 250,000, about. Lemonis so you went from making 81,000. Chris yes. Lemonis . In 15 to losing 250,000 almost entirely from this location. So the companys sitting with 600,000 of payables, 200,000 that are past due, and the debt 250,000 owed to two banks and an sba loan of 390,000. So you got no excess working capital and a location that is sucking the life out of the business. Chris yeah. Lemonis all right, i want to take this back and study it. Chris yeah. Lemonis it was honestly a real pleasure to meet you. Thank you so much. Chris very nice to meet you. Lemonis nice meeting you, as well. Chris thanks for coming in. Lemonis absolutely. The original store was a decent first effort. But they took that success, and they tried to parlay it in a different market without a lot of research and thought. That type of naivety can put you out of business. Tony and jess, have you guys seen the Financial Statements . Jess it has been a little while. Lemonis so, it looks like you guys are gonna lose about a quarter of a Million Dollars for the year. Did you know that . Tony i was aware of it. Lemonis did you know the number . Jess no. Lemonis shocked . Jess you know, i think theres a lot of conversation in the office at the chicago store where they are always at, and im just kind of worrying about the daytoday of this place. Lemonis that was a nice way of you saying, im not there, and they talk about things, and im not included. Do you guys think its weird that you have such a disjointed dynamic between the three of you . Tony it boils down to better communication, i think. Lemonis better communication . Jess we need any communication. Lemonis whyd you cut her equity . Chris cause were putting in more time and effort into the business. Its barely getting by. Ive put in my life savings on it. Its hard for someone to come to me and go, i need time off, and work less. Lemonis i understand that. Do you guys have families . Chris no. Jess we never talked about what happens when we have babies. It wasnt said. It wasnt asked. Chris it was written in there the 5year commitment. Jess yeah. Chris . For the first five years. Jess and if one of us walks away lemonis so, just so you know, you shouldnt have had a baby in the first five years. Jess in the first five years. Lemonis what are you essentially telling her . Dont get married. Dont have kids. Put your life on hold. And at the end of the five years. Well let you know . Theres no question that you guys have put your heart and soul into this. I think thats a great sign of business character. You dont always find that, so i compliment you on the fact that you care about what you do. So, i want to make an offer, because i need the Business Needs to solve its pastdue payables and needs to get current inventory in, and it needs to be a store that can speak to more people and more families. So, my offer is 500,000 for 50 . Chris if i had to pick a number, itd be, probably, more to 600,000. For 40 . Lemonis so, this is your display . Chris this is our booth. Lemonis this is the [bleep] display that ive ever seen. Chris if i had to pick a number, itd be, probably, avo the russels travel to swim meets every saturday. But now. Its thursday. Good thing they discovered gain flings, with oxi boost and febreze odor remover. Gain flings. Seriously good scent if i score a goal, uhhuh, oh yeah, uhhuh and oh yeah. Its your turn to bring the snacks. [ding] fritolay variety packs. Packed with possibilities. If theres gonna be a sticker on it has to mean something. So we make sure this means something. 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And if someone trys well let you know. Xfi advanced security. If its connected, its protected. Call, click, or visit a store today. More to 600,000. For 40 . Lemonis um, im not willing to budge from my 50 . I cant philosophically do it, cause its risky. So heres what im willing to do. Theres 750,000 worth of inventory in the system. Chris yeah, yeah. Lemonis how much of the 750,000 is inventory you would never buy again . Chris probably at least 100,000 or 200,000 of inventory to get rid of. Lemonis great. Chris . Thats offseason. Lemonis so, ill throw in an extra 100,000 for no additional equity if you can liquidate the 200,000 of inventory that you believe shouldnt be here in the next 30 days. And it is passfail. Chris yeah, i think that i think we could. Lemonis im going to write two checks. Ones for 500,000. One is for 100,000. If you liquidate the 200,000 of problem inventory in 30 days, youll get this check and ill ask for no more equity. Chris yeah. Lemonis if you dont, this is the check. Chris i want to communicate well and ask if you guys are on board. Jess im in. Tony if you feel confident in it, then i will. Lemonis so, do we have a deal . Chris yeah. Jess lets do it. Lemonis here you go. Okay . Jess got it. Lemonis you know what id like to do, jess . Jess yeah . Lemonis id like to get everybody together and have a discussion. Chris yeah. Lemonis so, yesterday, tony, ch