Itll be launching later this year. Lemonis can we hold, please . Pause, hold. If you were inspired, does that mean. Kathy i was inspired. Lemonis does that mean that i. Kathy well talk. Lemonis oh, thanks, kathy. That makes me. Kathy but you inspired. Lemonis now i feel. Oh, yeah, thats. Im here to make money, not inspire people only, but. In the last seven years of doing the profit, ive visited nearly 100 businesses. Lets go make some money [ horn honking ] and ive traveled the country trying to fix the people. And you do 1 million a year . You should be proud of that. Man but we dont know how to keep any of it. Lemonis . Fix the process. You see . It flimsy. Dont ever make these again. You dont sell them. And create a few products. Juli it reduces anxiety and depression. Lemonis i kind of like it. I spent countless days working on these companies. How much money did you burn through . Parker 650,000. Lemonis but we cant always fit everything im thinking into the show. So tonight were gonna give you an inside look at an episode from season four. Its murchisonhume. Over the next hour, im gonna take you behind the scenes to share with you what i was actually thinking during filming. I did like the fact that she started her business out of a need to solve a problem. Kathy mmm. Lemonis . Share some secrets. Pluses and minuses for the change . Max i mean, i see all minus. Lemonis all minus . Max yeah, because the name, obviously, its insipid. Kathy seemed like there wasnt an openness to even discuss it. Lets do a focus group. Lets see how people respond to it. Lemonis . And give you an honest assessment of my decisions. How much money do you think the Business Needs . Max about 1 million. What . Why are you laughing . Lemonis my name is marcus lemonis, and this is an inside look at the profit. Kathy, what is the actual business name . Kathy our company name is Kathy Ireland worldwide. Lemonis worldwide. Kathy . And our brand includes everything from fashion, apparel, home furnishings, lighting, and i have a book that just came out this last month. Lemonis high five, yeah. Kathy thank you. Its a novel. Its fictional, so. Amber whats the name of it . Kathy its fashion jungle. I mean, its such. Its been such a journey. Lemonis billiondollar company . Kathy were really grateful. Weve been. Amber i love you, kathy. Lemonis its a big business. Kathy were were grateful. Lemonis okay. Amber lets do it, bang. Lemonis cleaning products are a 50 billion industry, and apparently kathy knew that. So she just basically said, im gonna do it myself. Hello . Lillian hi, im lillian. Lemonis nice to meet you. Lillian yeah. Peter. Peter hi, marcus. Im peter. Lemonis nice to meet you. Peter nice to meet you. Lemonis im marcus. Lemonis how are you . Hannah hi, hannah. Lemonis nice to meet you. Taylor im taylor. Lemonis nice to meet you. Max whos for tea . Im making some. Oh, youre here lemonis hi. Taylor this is max. Amber oh, youre here. Lemonis shes like, oh, youre here. I was meeting the company mascots. Max oh, yes, our fur babies. Lemonis they normally have this kind of disposition . Max yes, theyre very calm. Lemonis do they take on their owners disposition . Max probably not. Lemonis okay, and so why did you start this business . Max i had a young 18monthold who was born with eczema, asthma and allergies and allergic sensitivity. So when i was cleaning the house, it would exacerbate them, and i thought, im just gonna make my own. I would get, like, plantbased cleaners. It was absolutely nontoxic. Lemonis and thats the cleaning agent . Max yes. Lemonis wow. I did like the fact that she started her business out of a need to solve a problem, and i think oftentimes Business Owners dont do that. Kathy i love that about max, too. It was a need for her child and that she recognized, you know, surely theres got to be other families who are struggling with this and really seeking to find something that would work. Lemonis solve it. Amber max had good intentions. Lemonis yep. Kathy mmhmm. Lemonis whered the name come from . Max its peters fathers two middle names, Roderick Murchison hume kater. Hes on the wall over there. Lemonis have you had any headwind in the states with the name . Max oh, ive had resistance, yes. Lemonis merchantsin, i just. Max yeah, its murchison. Lemonis murchison . Max yeah. Lemonis not merch. Max theres no chin. Peter theres no n. Lemonis murchisonhume. Max i just thought it sounded like it had gravitas. Lemonis when you name your brand, you want it to be something memorable, and it has real clarity to it, not something with gravitas like a law firm. Are these the products right here . Max yes. Lemonis what are the price points . Max so the triggers are all 9 at retail. Lemonis 9 . Max i know. Lemonis who can afford that . Max yeah. Amber kathy, you know, with your, lets say furniture, a lot of the products that you deal with, youre almost the complete opposite of someone like max because youre selling more of this relatable product and price point. Its in walmart. Its all through wayfair. Kathy we do have our luxury brands, but we started with our opening price points, and people said you couldnt do that. You cant start at mass and move up, but nobody had a good reason why, but you have to build that trusted relationship with a customer. Once you build the trust you have to earn, then theyll grow with you, and theyll say, okay, i grew up as a little girl sleeping in this princess bouquet bed. Im getting married now. Im gonna spend a little bit more money on this gown, on these diamonds, whatever it is, but youve got to build that trust. And when youre starting, its so important that you really know who you are serving. Our customer, thats my boss, and if i dont listen to my boss. Lemonis theyll fire you. Kathy were all in trouble. Amber bang. Lemonis where do you manufacture it . Max we manufacture it in skokie, and we ship it to dallas. Lemonis thirdparty Logistics Business . Max correct, 3pl, yeah, yeah. Lemonis that seems inefficient. So for a typical bottle like this, what does it cost . Kathleen 37 cents for the bottle. Lemonis okay. Kathleen closure is 14 cents. Lemonis okay, and then how much is the label . Kathleen the label is 18 cents. Lemonis okay, so now were at 69. Kathleen the filling is 35 cents. The box is 6 cents. The partitions are 7 cents. Lemonis okay. Kathleen and. Lemonis ingredients. Kathleen . Is 12 cents. Lemonis so at 1. 29, its still sitting in chicago. Wheres the next place it goes . Max dallas. Lemonis okay. What does it cost to get it to dallas . Kathleen 50 cents. Max 50 cents a bottle. Lemonis murchison products are made in chicago, then transported to dallas, and then shipped out from there. To get them to dallas adds another 50 cents of cost to each individual unit, but keep in mind murchisonhume, like any wholesaler, sells to retailers at twice its cost, meaning that the 50 cents turns into 1 by the time it gets to the retailer. Then the retailer adds its markup, and that 1 becomes 2, and now an extra 2 have been tacked on to the retail price just because of dallas. And what do customers do when they see that inflated price . Well, you take a guess. They walk away. Amber why would max do Something Like this . It seems basic to have it in the same state. Lemonis it seems basic when we explain it that way, but they forget that the Multiplier Effect from them to distributor, distributor to retailer, retailer to consumer. It just gets lost, and so you start peeling that thing back. You can end up actually being more profitable as a company because as your price goes down, your velocity of sales should go up. Kathy when youre in it, it can be difficult to see it. Lemonis yeah, right. Walk me through this. Max so we used to have a textheavy label. I wanted to make it easy for the customer to identify, so we made some icons. Lemonis alright. Im gonna challenge you on that. Max oh, no. Lemonis i feel like its, like, buying products for my castle or something. Taylor the chair is kind of like a chair that would be in a castle. Max easy to identify, stylish, chic. Lemonis anybody have a chair like that in your house . Kathleen no. Max i do. Lemonis of course you do, lady. Do you think theyre too fancy . Taylor the bun is pretty tight. Max its a chignon. Lemonis what is that . Max its french. Lemonis its probably french for tightass product. Look, forget about the fact that these icons alienate regular people. The bigger problem with them is they dont actually describe what the product is. Like this lady with the bun, you would think thats haircare product. Right . Nope, its bathroom cleaner. Taylor we dont look like a cleaning product. Thats royalist. It looks, like, you know, the queen of england would have it, and i dont think it should. We make toilet cleaner. Lemonis what is the best in show trademark . Taylor we own that. Thats registered. Lemonis oh, really . Taylor yeah, we bought that. Lemonis look, i have a pretty big investment in the pet industry. Huge. Its a chain of pet stores called bentleys. Now, i dont know much about maxs petcleaning products. But the brand best in show . Well, that trademark is worth something. Id like to actually go over the financials with everybody. Kathleen okay, okay. Lemonis when i look at 2015, 900,000 of revenue, 489,000 of cost of goods, and all the expenses is 888,000. Kathleen mmhmm. Lemonis so last year, the company lost 477,000. Kathleen under the c. E. O. s watching. Lemonis is the c. E. O. Here today . Lilliana the c. E. O. Left. She got pinched by playboy. Max shes doing their digital marketing. Lemonis why was there a c. E. O. . Max i dont feel qualified to be a c. E. O. Lemonis cost, sale, gross profit. Max its not hard. Lemonis yeah. Max to minimize our 3pl cost, were gonna try to bring inhouse our directtoconsumer shipping. So were gonna fulfill downstairs. Lemonis so youre gonna get in the distribution business in an office plaza . Max kind of, yes. Kathleen were really not hoping to do so. Lemonis its not a distribution center. Its a Little Office in a strip mall. Secondly, i dont think its ever a good idea to distribute products from one coast to the other when you know that your buyers are all over the country. You own approximately 80 of the business, and the assets that are left inside the company are 289,000 of inventory sitting in the warehouse. So on the Balance Sheets, 80,000 in payables. Theres 53,000 in cash. Your past two payables exceed your cash. Kathy her brand could be tea. She could do a great tea brand. Amber next year, kathys gonna launch hume tea. Lemonis oh, if that [bleep] happens. Youre sort of out of gas. Kathleen definitely. Max marcus, some tea . Even when i mention the numbers and the fact that they were really bad, i felt like i was at afternoon tea. Can i spend a minute with max, just her and i . Max sure, definitely. Lemonis at what point are you gonna worry that your doors are about to close . I think she is actually in denial. Max, it feels like you guys are slightly delusional about whats happening. Its like it doesnt feel like a company in crisis to me. It feels more like appearances than reality. Max we should have been out of, by all rights, we should have been out of business three months ago. Lemonis so then why are you continuing . Max i just cant give up because i dont want to let everyone down, and i will have moved my family away from our Beautiful House to come out here and live in a little house, thats too small for us, on a highway. I owe it to my family to not give up and stay and figure it out. Lemonis okay. Let me pore over these numbers, and you and i will connect a little bit more. Max ill repair my lipstick. Lemonis how did you feel during that moment . Kathy it made me really sad because i want her to step up and be strong. Lemonis you think it was a tactic, or do you think it was real emotion . Kathy i dont want to make that judgment on her. Lemonis it felt sincere to me. Amber i actually think in that moment, she was really embarrassed. I think you were telling her what was wrong with her business and her finances, and someone who everything had to be perfect, getting real is hard for her. I think she wants to look and be perfect. I mean, thats her, in my opinion. Lemonis good seeing you. Good to see you. Peter good evening. Lemonis so hows the process been for you guys so far . Max very good. Lemonis how much money do you think the Business Needs . Max i think it needs about 1 million. Lemonis i was like, howd you come up with that number . I dont think you need 1 million because im not the person to give you 1 million. Max okay. Lemonis im not even the person to give you a half a million dollars. Its too big of a crap shoot for me, and so im not willing to invest more than 250,000 in the business, and i feel like im gonna have to do more leg work than i typically would, and so my offer has to be for at least 50 , at least. Max thats gonna be a problem. Im sorry. Okay, get it together, max. Kathy shes walking away, and i didnt like that. When things get tough, you dont walk away. Amber yeah, stay at the table. Kathy yeah. Amber i think as a woman. I dont know how you feel, kathy, but when i see that, i get so angry. Kathy i do, too, because we work so hard. Like, dont do that. Lemonis whats so weird is, as the nonfemale, i felt really bad for her. Amber i just. I would like to see a woman be stronger than that. Lemonis i think for me, what i was more bothered by, i wanted to have that open debate of, like, how you arrived at that and what youre gonna do with it. Kathy emotions or not, she could have continued the conversation and moved forward. Lemonis the fact that taylor came here with your direction and had her manipulate products was wrong. It was back to that, what sort of impression and image am i creating . Lemonis what was the first product think you need to buy expensive skincare products [ ] to see dramatic results . Try olay skin care. Just one jar of microsculpting cream has the hydrating power of 5 jars of a prestige cream, which helps plump skin cells and visibly smooth wrinkles. While new olay retinol24. Provides visibly smoother, brighter skin. For dramatic skincare results, try olay. And now receive 25 off your purchase at olay. Com brand power. Helping you buy better. Shbecause xfinity mobilehen ygives you more flexible data. You can choose to share data between lines, mix with unlimited, or switch it up at any time. All on the most reliable wireless network. Which means you can save money without compromising on coverage. Get more flexible data, the most reliable network, and more savings. Plus, get 300 off when you buy a new Samsung Galaxy s20 ultra. Thats simple. Easy. Awesome. Go to xfinitymobile. Com today. You ever launched in the market . Kathy socks, a single pair of socks made from recycled sodapop bottles, and i was an aging pregnant model at my kitchen table. I mean, doors slammed in our faces. We made some big mistakes along the way, and there were times when we slept in airports to save money. Its not a sacrifice. Its a bold investment. Lemonis part of the process. Kathy its part of it, and it, you know, made it possible for us to sell our 100 millionth pair of socks, but what. Lemonis how many pairs . Amber oh, my gosh. Kathy 100. Well, that. We had a celebration when we sold our 100 millionth pair. It was like, yay lemonis and how long ago was that . Kathy that was many years ago. Lemonis and how many do you think youre up to now . Kathy i dont know. Lemonis oh amber a hundred million. Lemonis and i love the fact that youre modest about it. A hundred million. Max im sorry. I needed to compose myself. Lemonis yes, you do. Max the lowest we would go would be 500,000 for 30 . Lemonis im willing to go 250,000 for 30 , and i want to own 75 of the best in show trademark. Max can i have 30 of best in show, since i came up with it, and i will work my butt off for you, and i have ideas. Lemonis yes. Oddly enough, i probably would have paid 250,000 for the best in show trademark. Even if i never wanted to manufacture anything, i could license the crap out of it. Kathy right. Max im down with that. Should we shake . Lemonis we have a deal . Max we do. Lemonis okay, thank you. Peter well done. Lemonis thank you. Max thank you, marcus. Wow. Lemonis the deal that we made is for me to invest 250,000 into the business. To drive down the actual cost of goods, these products cannot cost 1. 79 for a bottle, and its my opinion that the brand feels disconnected from the average american. Max, i think you struggle with your ability to be a good c. E. O. , and my goal is to give max the tools and the resources and the contacts and let her run her company. Max thats all i need. Lemonis yeah, great. Good, good. Amber you used to tell me, like, offcamera that it bothered you when max would say that she didnt think she was qualified to be a c. E. O. Why is that . Lemonis well, because i dont think a c. E. O. Is a title. I think its a philosophy, and if you have deficiencies in certain skills, then you can surround yourself with people. But why would you not want to be the leader, set the tone, set the tempo, set the culture for your organization . Because, if not, then just just be an employee. Kathy it feels like a lack of confidence. Amber are you the c. E. O. Of your business, kathy . Kathy yes. Lemonis even though she doesnt know how many pairs of socks shes sold, at least publicly. Amber even though shes up to, like, a billion pairs of socks. Lemonis four billion socks. Im gonna google that number. Im gonna find out by the end of today how many billions of socks youve sold. Max told me that she sold her products at the Container Store. So i wanted to head over and see what it looked like. What im ultimately looking for is to see the companys positioning on the shelf. Theyre giving you a pretty significant. Max they always give us great real estate. Lemonis it normally looks this good . Max always on endcap. Lemonis wow. Max theyre very good. Lemonis does it typically look this plentiful . Alana its usually just one row that weve got down toward the bottom. Lemonis which shelf would it typically be on . Alana it actually would go right along this line here. Lemonis this one here . Alana yes. Lemonis and so when did we get a better space . Alana we just moved it yesterday. We were asked to move it up to the top. Lemonis okay, by the regional manager or. Alana no, that was something that i think someone from murchisonhume who had asked us to do that. Max taylor came and did a tidy up. Lemonis a tidy up. To find out that employees came in and moved it around and restocked it, it was back to that, what sort of impression and image am i creating . And i dont know if i would have been angry if i would have gotten there and it would have been on the bottom. I would have been like, okay, great job getting in the Container Store. Its an amazing company, congratulations. Now what do we need to do to move up, instead of trying to trick everybody . Amber right. Lemonis thats a little weird that this got