Peter
Marcus Explores Growing West End Coffee Company
Despite the fact that this was another walk out by Marcus it offers some valuable business lessons, including one big one.
Background
West End Coffee Company is roasting operation located in Greenville SC, serving local restaurants and specialty shops. The company was purchased by the two owners, John Brown and Becky Schramm in 2012 for $499K. We are not told how long it had been in existence prior to the purchase.
Marcus Lemonis and Unique Salon & Spa
This was a surprisingly drama-free episode. It’s also the stuff of a typical Harvard Business School case study. In other words, it’s not a particularly interesting business but some good lessons do await us.
I didn’t write this but wish that I had. These are some great business insights on how to grow a business from self-made billionaire John Malone. Malone is one of the greats along with Ted Turner from the cable TV industry. If you want to learn more about him I recommend the book Cable Cowboys.
Marcus Lemonis and the Fishy Seafood Store
Okay, let’s take a look at this one. We finally got the train wreck we have all been waiting for. I know you guys and gals love them.
Background
Swanson’s Fish Market is a 41 year old family business located in Fairfield, CT. It’s currently run by the founder’s son Gary Jr. His wife Sue is also involved to some debatable degree. Their daughter Larissa recently quit her job to come work as the book-keeper for business.
On July the 4th, 2009 the building that housed the original store burned down and all was lost including a full year of operations and income. Today the business is $900K in debt and struggling to become profitable.
Financials
Despite the huge debt Gary Jr. initially paints a bright picture when asked about the store’s financial performance. Monthly sales are over $150K. The fresh seafood has a decent gross margin of 30% while the soups and other prepared meals have a strong margin of 60%. Marcus immediately starts seeing $ signs as he thinks about expanding the latter. On top of that the new building makes additional money by renting out two storefronts to a cafe and burger joint. This income more than covers the mortgage payment.
Sweet! Sure it’s a dull business but Marcus has the Midas Touch and can turn it into another money maker.
How Marcus Plans to Grow Queens Vibe (formerly “Artistic Stitch Sports Complex”)
Well this episode was a bit of a roller coaster ride with some serious plummets that could have killed the deal. It also has some interesting deal-making aspects.
Background:
The Artistic Stitch Sports Complex is an odd collection of businesses all operating under one roof in Queens. The two owners, Sal and Nic, are friends who have been in business 18 years to date. Their bread and butter businesses are embroidery, silk screening, (and sign making*). However, they were able to get a deal on an old 28K sq. ft. warehouse a while back which had far more room than they actually needed. So to justify taking over the entire building they came up with some pretty weak secondary businesses. These include a restaurant and a sports complex where people can play basketball or get in some batting practice. These add-on businesses appear to take up 80%, if not 90%, of the floor space, with the profitable ones “shoved into a corner,” as Marcus put it. Walking around the place, he described it as the “world’s weirdest mini-mall.”
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