Patrick i mean, i dont want to be, like, sitting here just. Lemonis . Working . His brand wont just go out of style, it will go out of business. Patrick im just so [bleep] scared. Lemonis 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. In 2008, Patrick Dilascia moved from new york city to los angeles to launch his namesake clothing brand, dilascia. Patrick i want to have my life. I want to have my dream. Lemonis specializing in screenprinted tshirts with playful designs, patrick built a storefront, a website, and most importantly accounts with bigname retailers, like nordstrom and barneys. And as his company grew, his siblings dan and kelly came to l. A. To pitch in. Patrick people are going bananas for them. Lemonis but then one of their biggest customers closed. Patrick kitson sold 600 a week of those. Lemonis . Putting the business and the siblings under tremendous pressure. Patrick why didnt you just call me in the first place and tell me . Kelly i sent it to you. Patrick its a [bleep] mess. Lemonis now their sales are slipping, their debt is climbing, and patricks dream is in serious danger. Patrick oh, my god, you guys. Dan let people do their job, patrick. Take their advice. Lemonis ive invested in several fashion brands in recent years. And in patricks designs, i see some really fun ideas. If i can harness his creativity and get the business back on track, im confident we take dilascia to new heights. Patrick hello welcome to dilascia. Lemonis im marcus. Patrick im patrick. Its so nice to meet you. Lemonis nice to meet you. Ive seen this logo before. Patrick mmhmm. Lemonis ive seen it at barneys. Ive seen it at nordstrom. Patrick its everywhere. This is kind of what made our brand super famous. I literally drew it on, like, a piece of paper. Im like, we have to make the plane look backwards and do everything in reverse print. Lemonis that is pretty cool. Patrick im originally from new york, and then i moved here, to los angeles. Lemonis where in new york . Patrick im originally from upstate binghamton. Lemonis okay. Patrick which is where we had our family bakery and our family business. And then i lemonis you were a baker . Patrick my dad was. My dad lives in upstate new york. Lemonis and your mom . Patrick is no longer here. Lemonis she passed away. Patrick my mom died eight years ago this week, actually. Lemonis oh, man. Patrick when someone is dealt Something Like that and such a tragedy and she was superyoung, too you can either go super depressed and put your head under the covers, or be like [bleep] it, life is too short. Im gonna live my dream and do exactly what i want. So, 10 weeks later, after my mom died, i found myself living here with no job, and i knew i was gonna have a clothing brand. Lemonis well, your mom would probably dig this. She would think it was cool, right . Patrick she probably would be pissed that i moved to l. A. With no Health Insurance or, like [laughs] i dont want it. I want to have my life. I want to have my dream. When i was 18 years old, i was working for American Eagle in new york, and i worked in italy. I did sweater production for armani in italy, and then i got the job at burlington as a buyer. So, i bought for their 600store chain, and my job was to make them cool. Lemonis okay. And then whats this . Patrick why does it say tmz on it . Lemonis yeah. Patrick so, i have a partnership with tmz. Lemonis is that a license, or how does that work . Patrick yeah, we have their license deal. We do all of their tshirts. We come up with all the designs. So, if you click shop on the tmz website, it goes directly to our website. Lemonis it does . Patrick yeah. Lemonis the fact that patrick has these licensing deals is impressive to me, because if a strong brand gives dilascia the rights to its logo and name, they boost the perceived value of the apparel. It also means that patricks a really good salesperson, because Big Companies dont just license their names to anybody. Patrick so, mens is our biggest part of the store, which is from here on. Kids is probably about 45 of our business. Mens is 35 . Womens is the smallest at 20 . Lemonis the womens Apparel Market in the United States is twice the size of the mens market. But, oddly enough, it only accounts for 20 of patricks business. It should be more like 50 at a minimum. Wheres the womens section . Patrick this right here. Lemonis i would have expected to see more styles, more bodies. And what he is offering the ladies just isnt enough. Man so, these are all your girl stuff . Patrick all girls is right here. Lemonis he doesnt have hoodies. Woman do you guys have hoodies, or no . Patrick not right now. Lemonis the shirts are boxy. And theres not a real wide variety of fits. Patrick these. Woman 2 im probably not a teen. Lemonis if youre a woman looking for some options at dilascia, youre probably gonna go home emptyhanded. Patrick hi kelly hi. Patrick hello. Marcus, this is my sister, kelly. Kelly hi, marcus. Lemonis hi, kelly . Kelly pleasure to meet you. Yes, kelly. Lemonis nice to meet you. Dan hi, im dan. Lemonis dan, nice to meet you. Dan nice to meet you, marcus. Lemonis so you guys all wear the stuff . Dan yeah. Kelly yeah. Lemonis now, is that a ladies body . Kelly yes, this is a ladies body. Lemonis okay. Kelly yeah. Lemonis i was surprised how small the ladies section was in comparison to the universe of fashion. Kelly i would love to do more feminine styles for girls and tweens. I think theres a huge opportunity there. Lemonis how much business do you do overall . Total company. Patrick well, in 2014 we did 1 million. Last year, we did 900,000. And now this year, cause of all the situations were having, were on track to do about 600,000. Patrick you know, one of our biggest retailers that we work with, kitson, is closed. Lemonis how much business did you do with them on an annual basis . Patrick on an annual basis, about 300,000. Lemonis and theyre gone . Patrick gone. Lemonis so kitson was 30 of your business. Patrick easily. Lemonis to lose 1 3 of your entire business when one account goes out of business is way too vulnerable for any business to be. What that tells me is they dont have enough wholesale accounts, and im guessing that has something to do with their narrow Product Offering. And how much revenue does this store do . Dan does about 60,000 a year. This is a constant battle with my brother. He spends a lot of time here selling tshirts and making small sales. Patrick yeah, but im also on the phone. This is like my office. This is like my home. Dan but its an expensive house. [ scoffs ] lemonis do you get paid . Patrick mmhmm. 50,000. Ive taken like three pay cuts this year, though. Kelly i was making that up until march, and now im not being paid. Lemonis so, youre not getting paid, either . Dan no. Lemonis nothing. Do you have equity in the business . Dan no. Lemonis how is the equity split up . Who owns the business . Dan him 100 patrick i own it all. Lemonis you own it all. How did the cash come into the company . Dan when my mother passed away, she left an inheritance to us. Yeah, it was about 300,000. Lemonis a third, a third, a third . Dan yeah. Lemonis so how much money came out of it for this . Dan all of his. Lemonis 100,000. Dan . Is gone, yeah. Lemonis how much of yours went in there . Dan about 20,000. Lemonis okay. Patrick my brother has done everything for me, like, when i opened my first store. Lemonis well, whats the beef with your sister . Patrick i feel like sometimes you talk down to me and you feel like im a moron, when im the one that started this. So, i feel like you just came in and took over, like you were like, this is how were gonna do it. Kelly cause im here im here to get the job done. Lemonis what is your role, exactly . Kelly im able to cut through the chaos and get some things going and add that structure. Patrick i you definitely bring stuff to the company, but my opinion didnt matter. I had no voice. Kelly youre wrong. Patrick even though i have done this for buyers. Ive done this with the people. Kelly a lot of the processes are broken, and we need. Lemonis its still not good, is it . Kelly . To keep it growing. We had to look at doing things differently, and you needed to be open to that. Dan i feel like theyre my kids sometimes, because i have to break up fights. Its that arguing, that is petty sometimes, that drives me crazy. Kelly and i didnt know what i was walking into when i got to this store, and almost babysitting that i had to do of my younger brother. As we were getting ready to come out here, and i was unpacking some things, i found a note from my mom that i had tucked in something, and it said thank you so much for helping patrick out. Thats what familys about. No one cares more than we do. Our name is on it. And its so frustrating cause we all want it to work so bad. You know, we grew up in a family business, we grew up working together, and this is this is everything. Lemonis why is it everything . Kelly [ sighs ] [ shakily ] because we put so much time and effort into it. [ sighs, sniffles ] its been the best job i ever had, and i think when were when were good and were making money, we work so well together. When times get tough and mistakes start happening, we are at each other. Lemonis what id like to see is where all of this is made. Are you guys printing in the back . Where do you do your printing . Patrick we print in our warehouse in downtown l. A. Lemonis okay. Patrick so, we have our warehousing and our printer that we work with in the same building. Lemonis and so i want to understand what the warehouse looks like, where the inventory is. Whats at stake for you right now, with this business . Patrick my whole life. My whole life, i mean lemonis what does that mean . If this thing closes, what happens . Patrick i have nothing. I mean, i eat, breathe i dont i dont, like, do anything else but work. Ive made my friends through this company. I dont have, like, a relationship. I dont have, like, kids. This is all i have. Lemonis its clear to me that patrick has invested everything not just financially, but emotionally, as well. So this would be devastating for him. Patrick here we are. Lemonis . If it doesnt work out. Everything happens here . Patrick yeah, its kind of like the central brain of the company, i guess. Hi, guys. This is marcus. Chris im chris. Nice to meet you. Noel noel. Lemonis noel, nice to meet you. Is this your company . Chris yes. Yes, it is. Lemonis what do you do for dilascia . Chris we do his silk screening. Lemonis all of it . Chris all of it. Lemonis and where are their screens . Chris patricks on this side, and then our other customers. This whole walls him . Chris most of it, yes. Lemonis and how much of this actually is the bulk of the business . Lets say theres how many screens here . Noel over 200. Lemonis 200. And how many of them make up the bulk of the business . Noel like 50. Lemonis 50. And for every screen, 150 of them that got wasted, how much is that money thrown in the garbage . Noel probably like 175. Lemonis out of the 200 screens that patrick has designed, over 150 of them are useless. Patrick pays his printers 175 for every screen they produce. With the ones that are sitting on the shelf collecting dust, thats over 26,000 thats gone to waste. But the losses dont just end there, because thats just the cost of making the screen. Theres time that he put in to make each design, the cost of the fabric used to make the initial run of shirts, and the cost of storing those shirts. All told, i would bet that patricks wasted over 50,000. To say his process is broken is an understatement. Its a disaster. Did you bring the financials with you . Dan i did, yeah. Lemonis can we grab them . Lets sit down and look at them. Dan this is yeartodate. This is last year. Lemonis okay, lets start with last year. So, 919,000 worth of business. 100,000 loss. Wheres the Balance Sheet . 45,000 of inventory, 6,000 of blanks, for a total inventory of 51,000. 16,000 of cash, bringing your total assets to 67,000. So, on the liability side, 198,000 of payables, 15,000 in credit card, 61,000 in merchant loans. 67,000 of assets minus 274,000 in liabilities. So, its 207,000 in whats called negative equity. Essentially, it means the companys insolvent. Do you know what that means . Patrick no. Im screwed . Lemonis no, but. [ scattered chuckles ]. It means that your liabilities exceed your assets. Patrick right. Lemonis and so, typically, what happens in that model is people will then file bankruptcy. At the end of the day, the situation here is very simple dilascia . Theyre out of business. They just dont know it yet. Store rent is 43,000. The store loss 31,382. Kelly the stores a fight. Patrick its always gonna be a fight. Lemonis big fight . Dan for me, its always been. Its probably the biggest one. Patrick you could not pay me 1 million to work out of that [bleep] warehouse. I hate it there. The creativity of the business dan no, it doesnt. Thats a lame excuse. Patrick it doesnt come from me sitting in that cubicle over there. Dan it doesnt come from there, patrick. It does not. Patrick where i get inspired. Its where i get inspired. Dan okay, but it doesnt come from there. Lemonis honestly, patrick, my biggest fear is how much are you willing to pivot and adjust . Patrick mmhmm. Lemonis what im potentially buying into is a guy who. Patrick . Is crazy . Lemonis youre not crazy. Youre creative. [ laughter ] you have good licenses with tmz. I see value in that. You have a lot of contacts with a lot of big boxes, and so theres a recipe there. Im not investing in a pile of tshirts. Im really investing in you. So im gonna make an offer. Okay . So, my offers 200,000 for 50 of the business. Wed be equal partners. But im still 100 in charge. Dan dont you think it seems low to get it going to where you want it to go . To get it where you want it to go, i dont think its enough. Lemonis but i put in more than 200,000 for a business thats losing 100,000, then the equity ask is gonna go up, and i dont want to do that. I dont want you to be disincentivized. I want you to still feel like its yours. Does that make a little more sense . Dan yes. It does. Kelly yeah. Lemonis im gonna find new vendors, im gonna open doors for you. The 200,000 would be spent to pay your vendors and reinvest in some inventory. Dan its a fair deal. Hes gonna grow this, patrick, to the degree that we can never do it. Patrick i know. I think im gonna throw up. Dan patrick, your stuff will be everywhere. Patrick im just so [bleep] scared. Kelly im scared of if this keeps going. Dan this is scary. Patrick i know. Dan what hes gonna do is not scary. Lemonis so, what are we doing . Patrick im not in love with this building. I feel like ill be, like, trapped. I mean, i dont want to be, like, sitting here, just. Lemonis . Working . If you cant change your thinking, im not sure what were doing together. I may have made a mistake. Dan hes gonna grow this, patrick, to the degree that we can never do it. Patrick i know. I think im gonna throw up. Kelly this should be not a throwup feeling. It should be a happy feeling. Dan hes getting us out. Hes getting you out. Lemonis i have another little twist for you. Patrick okay. Lemonis so, my offer to you is 200,000. Patrick yeah. Lemonis . For 50 of the business. Then, once we agree on that, ill go down to 40 , youll go down to 40 , and each of them will have 10 . I wanted to do this for dan and kelly, because i wanted them to feel really vested in the business. But i also thought it would be good for patrick to know that him and his family are in this together forever. Patrick we have have a deal. Lemonis we do . Patrick mmhmm. Lemonis you look, honestly, so stressed. Patrick [ laughs ] im scared. Kelly thank you. Patrick thank you so much. Lemonis congratulations. Kelly thank you, again. Lemonis congratulations. Dan thank you, marcus. [ dog yelps ] lemonis so, i wanted to get everybody together and give you guys who are part of the team who were not at our meeting the other day a quick summary on what happened. The deal that i made with patrick is for me to invest 200,000 for 50 of the business. With that 200,000, were gonna take care of our vendors, were gonna invest in product development, were gonna work on growing the womens category. Kelly i feel better now. Lemonis why . What did you think was going to happen . Kelly i dont know. I was nervous. Patrick shes always paranoid about everything. Kelly im yeah. Lemonis well, you should be paranoid about it a little bit. A little more paranoid it will be good for you. That you didnt think everybody else was gonna clean up your mess, because theyve been doing it for years. Kelly hes the little brother. Were always trying to take care of him. Lemonis why do you help so much . Dan i i dont know. [ sighs ] just something ive always done. Lemonis why . Dan because my mom would have taken care of him. [ voice breaking ] shes not here. Lemonis patrick, youre a lucky guy, because i have rarely seen Family Businesses where you have a brother and sister that makes tons of sacrifices with no theres no reward for them. Patrick i know im lucky. But i would do anything for them, too. Lemonis i can see the talent in you, and my job is to rip it out of you. Even if it hurts. Okay . Patrick mmhmm. Lemonis [ claps ] lets go to work, okay . Kelly okay. Lemonis from what i saw at the warehouse, patrick pretty much produces any idea that pops in his head. Thats his design process. He doesnt want to take into account the time it takes, the money that it takes, or whether the product even sells. Today, im gonna force him to think about it. Like, if i walk through, like, how many of these have you sold . Patrick 20 . Lemonis how many of these did you sell . Patrick probably around 50. Lemonis around 50 . Kelly no, because youve thats been wholesale to nordstrom. Lemonis how many . Kelly [ sighs ] lemonis how many of these did you sell . Patrick a lot. Lemonis how manys a lot . Patrick that was that was big online. Lemonis how many . Patrick like over 100. Lemonis exactly or are you just whiffing it . Patrick im just whiffing it. I lemonis we cant we cant function that way. Wheres the data in the system that supports the numbers . Dan theres no data. Patrick theres no data. Dan theres nothing. Its all a guess. Lemonis im trying to prove one point there is no process to actually launch products. And the three of you liking the design isnt a process to me. I need these guys to know that if they dont know their numbers, they dont know their business. You cant track whats selling or not selling. You cant do any forecasting to build inventory. You cant even monitor trends or customer behavior. You have no shot at success. Let me bring this back to your family business. When your father woke up in the morning, did he just start making bread . Patrick no. Lemonis how did he base his forecast for that day of what to make . Dan based on the orders that came i