Amazing Grapes Before The Profit
Amazing Grapes opened in Orange County California around nine years ago. Greg Schroeder started that business since he already loved collecting wine. Before Greg started the company, he had to drive over 35 miles to find a fine wine store. Greg admitted that he’s never seen a profit off of Amazing Grapes even though they hit $3.5 million in sales the year before. Marcus believes that he could help them hit higher sales margins and achieve profitability.
Amazing Grapes Pro-Fit on The Profit
Marcus Lemonis went to visit the Amazing Grapes wine store. The first thing that he saw outside was a bunch of wine boxes cluttering the storefront. On the sign, he noticed that they have live music in this fine wine store which was odd. As he was looking at the sign, it fell from its hooks. Marcus entered the store, where he saw a bunch of inventory. He introduced himself to Brian, who was manning the register. Brian said that there are over 1800 SKUs of wine.
Next, Marcus met Daniel who introduced himself as the beer guy. Daniel explained that Bill and Greg, who were the owners, did not appear at the store every day. Daniel saw it as one of the issues that Amazing Grapes were facing. Marcus then met Dan, who was a wine buyer. Dan admitted that there is too much inventory, but Greg the owner asserted his control over the buying process and over ordered. Since Stan didn’t know where the owners were either, he brought Marcus back to the wine bar.
Marcus said that the wine bar was in a terrible location, and looks like a totally separate business. Marcus introduced himself to Mike, who oversaw the kitchen. Mike said that the bar and kitchen area generated $500,000 a year. Marcus asked if Mike was in charge of the layout, but Mike said that Greg was. Marcus is explained that the wine bar should help generate sales, and thus should be in a more central location conducive to the customer picking up a bottle of what they were drinking.
Marcus then met Matt, the retail manager. Matt explains that Greg only comes in about once or twice a month. Marcus said that he rarely invests in a company run by absentee owners, but he thought that the employees were doing a good job of keeping the business afloat.
Marcus met Gerri, the chef. She explained that the biggest problem that the kitchen was facing was that it was too small. Greg Schroeder finally walked in. Marcus pulled him aside and asked him what he did for a full-time job. Greg tries to tell him that he comes in three or four times a week. Marcus called him out on it, but he said that the management that was there knew how to run things. Greg told him that they were upside down a couple hundred thousand dollars for inventory. Marcus asked to look closer at the financial papers.
Marcus probes deeper into the financials and found out that they charge the same thing for people who buy the wine online as opposed to people who buy it in the store. He looked disturbed about that. Marcus explains that they don’t make enough to cover their operating expenses, so the $3.5 million in sales was irrelevant. Marcus asked what the most profitable part of the business was, and Greg said that was the bar. Marcus told him that he would reduce the retail space to give more space to the bar.
Greg explained that the co-owner for Amazing Grapes would not be coming since he was a business consultant who did all the financials, and he didn’t want to look bad to potential customers. Marcus asked Greg to call him. While he was on the phone, Marcus set up a meeting for Bill to come in at 5 PM. As they were waiting on Bill, Marcus explained that he didn’t drink a lot of wine because it impaired his critical thinking abilities and check writing.
When Bill Gary showed up, the three men went to sit at the bar to discuss their plan. Bill explained that none of the silent partners were willing to write a check for the business because they had already invested over $1 million in the company, and they were upside down to their vendors. Marcus said that he didn’t know that he had a deal to make sense they were $600,000 in the hole. He recommended liquidating the business, paying off the vendors, and shutting down. Greg protested, saying that he loved the business and he loved rolling up his sleeves to do the dirty work. Marcus didn’t let him get away with that, citing that he was never there. Marcus offered $300,000 in exchange for 51% of the business. He wanted the management team to on 25%, while the current ownership owns whatever’s left.
Marcus said that he wanted to put a leader in charge, and a process in place to buy inventory the Right Way, Greg accepted the deal. Marcus asked if he understood the Marcus would be 100% in charge, and Greg agreed. He thanked Marcus for saving them. Marcus met with the employees and told them that they now own a portion of the company. The wine buyer was very happy with this decision. He thought it showed the commitment that Marcus had to his people. Next, Marcus took a look at the amazing amounts of inventory that were just sitting in the back for the store. He wanted to liquidate the wine that wasn’t selling and invest the money into wine that would sell.
Then Marcus had a tasting of all the food that they sold in the restaurant area. According to the chef and the waitstaff, pizza was the best-selling item at amazing grapes. Brian, the retail sales manager, seemed unhappy with this revelation. Greg, the owner, started setting up for his band performance. An employee told Marcus that the band’s music puts people off, and cause them to walk out of amazing grapes. Marcus told Greg that he was not focused on the right things. He asked the other employees how much business they lose when the band comes, and he was told’s about 50 seats. They lost money through having to pay the band fee, as well as through losing customers.
The next morning, Marcus walked in to see how the night had gone. He went over the numbers and discovered that Greg’s band had driven away about 50% of the potential customers. Marcus decided that the band was not going to play at amazing grapes any longer. Marcus was unable to reach Greg on the phone. Marcus just brought in contractors and decided is that he was going to start without Greg.
Marcus attended amazing grapes that night since it was the last night they would be open for business before the major overhaul. The sales clerk that Marcus met when he first walked in decided to blab to the mayor of the town about some changes that he thought should happen. Marcus pulled him outside. He told him that it was vastly inappropriate to be announcing changes to the mayor like that. Marcus brought up the fact that he’d only been there a week, and he was talking like he owned the company. Marcus put them back in his place.
Next, Marcus brought some of the employees to a vineyard that allowed a purchasing relationship with them as opposed to a distributor. While they were there, Marcus and the new employee made up. Marcus and the employees learned that they could save a lot of money by switching to the vineyard. Marcus wanted to liquidate the wine that wasn’t selling in order to stock that kind of wine.
The scene switched to the amazing grapes wine store, which had already been hollowed out. Greg, the absentee owner, finally showed up and he looked upset. He thought that Marcus should’ve informed him about the renovations. Marcus pointed out that Greg should’ve been there. Greg said that Marcus should’ve emailed him, but Marcus pointed out that 76% of the owners agreed to move forward. Greg was less than happy with this determination. He walked away from the situation.
Greg promises that he would be more present, but he wanted Marcus to promise a mutual respect. They shook on it. 45 days later, Marcus walked into the newly renovated amazing grapes. The store looked great. While there is still wine retail space, the floor was open and focused on the chairs for the bar. The wines were all around the edges, the kitchen was spacious, and the wine bar was now front and center.
Greg started to get in Dan’s face about the pricing of wine. He was trying to assert himself over the employees. Dan told him that he was in charge of pricing the wines. He told Greg to stay out of his business. He went up to Marcus, and Marcus called a meeting. The two were unable to come to a resolution. Dan wanted an apology, and Greg refused to give it to him.
Greg started getting in his car to go home, but Marcus headed him off. He managed to get Greg back inside. Greg said that he wanted to prove to Marcus that he was very committed to this business. Marcus spoke to Mike, who told him that they’re doing an additional $5000 in sales. Dan told him that wine bottle sales had increased by 15%. People were buying more bottles to enjoy in-house, as well as getting wine to have at home.
Marcus said that he created a private label house wine. He showed it to the employees, and they seem thrilled. Marcus said that he enjoyed working with the employees because they actually made the business run. He ended the episode by saying that they were well on their way to make a lot of money. Let’s see how they did.
Amazing Grapes Now in 2018 – The After ‘The Profit’ Update
Since appearing on the profit, the Amazing Grapes wine store has been booming. Marcus is still in control of 51% of the business, and they’ve been having regular meetings. Apparently there has been one area in which sales have dropped. Since the reconstruction, Amazing Grapes has not done any web sales. Marcus went in and fired the web sales manager, who thought he didn’t have to do his job. Everyone else agreed that more web sales would bring high profits to Amazing Grapes. Amazing Grapes has excellent reviews both on Facebook and on Yelp. It seems like people genuinely like going there.
Amazing Grapes – Update Part 2
We recently received an email from a representative at Amazing Grapes. We are unable to verify any of the provided information so we are providing it to readers as another viewpoint to consider. The state below is unedited from the correspondence we received:
Now the truth. After 12 years in operation Amazing Grapes is closing its doors for good. Marcus has never taken legal ownership of Amazing Grapes and has refused to invest additional money into the business to finish projects that would have taken us to the next level. After promises to expand the kitchen and bathrooms as well as a cold box, and after we took on an additional 1800 square feet of space to implement the expansion, Marcus and his people at ML Foods dragged their feet for nearly 2 years and none of the expansion and changes have been completed. ML Foods has not paid rent since April and we owe $200K to wine vendors for wine that was delivered to us in good faith
Additionally, we were dragged into a lawsuit by a former waitress who complained that we did not have ‘scheduled’ breaks for our part time wait staff. The ‘scheduled’ part is true (we did not schedule breaks), but anyone that has been a waiter understands that breaks are taken at will when time allows. Unfortunately, California doesn’t see it this way and we were looking at a nearly $200K settlement plus legal fees to get out from underneath this. Marcus refused to get involved and after months of back and forth with Marcus’ attorneys, Marcus and his people went silent leaving the original owners, who, by the way, made a deal and sold 76% of the business to Marcus, were forced to protect themselves and file Chapter 7 bankruptcy. Our doors close tomorrow evening and the trustee will take over from there.