Blues Jean Bar Before The Profit
Founded by New Orleans native Lady Catherine Reiss-Fuller, Blue Jeans Bar is a high-end jean retailer in San Francisco, California that was first opened in 2004. Taking inspiration from both her mother, a model, and her father who was a business owner, Lady ended up receiving an MBA before turning her eyes to the fashion business. Sadly, recent years have shown that she may have initially reached too close to the sun. In a state of financial issues and mismanagement, Marcus Lemonis steps in to lend a hand.
Blues Jean Bar On The Profit
Initially in the episode, it’s mentioned that Blues Jean Bar had over 12 locations riding on the concept that someone could order jeans like they order a drink (hence the bar of Blues Jeans Bar), but with competition and inexperience the numbers would simply not last. Starting out in San Francisco, Marcus meets Lady at the flagship store. He immediately sees a few issues with the model. First, using the term “belly up to the bar” seems off for a fashion store, and the fact that the customers cannot touch the jeans without an employee also seems like a huge limiting factor. A quick Q&A with a customer reveals both are not working out well for the company.
Trying out a few pairs of jeans, Marcus finds they don’t have his size, and felt that at best they had leftover pairs of jeans from other customers. He also addresses the odd name format, which is an homage to her creole background, but also mentions that it doesn’t feel very blue-sy. Next, margins are discussed, and it’s worrisome to hear that a 50% margin was an improvement. Most stores operate at 60%, with a combination of shirts and jeans. Inventory is also addressed, which is quite weak. Lady mentions she’s been needing to pay debts back and also attempting to keep buying pants. She mentions that the dozen stores have been reduced to three because she failed to understand the market of every location from Boston to Denver. Marcus shows more concern, as in his words, jeans are an easy market. In 2013, Lady ended up losing nearly half a million dollars keeping her stores open despite making over $8 Million in sales. This was primarily due to the three remaining stores making money while the other 9 were in the red.
Marcus asks about the inventory acquisition and merchandising, and finds Lady primarily does these tasks without real input from the outside. He eventually also comes around to asking her if Lady is her actual name, which she confirms, stating that it was her mother’s name, and that she had killed herself when Lady was quite young, and left her an inheritance. With this inheritance, she aimed to create a legacy. Marcus can relate, having recently lost his mother as well. He wishes to help her, but first needs to look at the financials.
The two hit it off in a San Francisco café, and even awkwardly flirt for a moment before getting down to the money. Total assets turns out to be 1/10th the total liabilities, which is a bit scary, especially considering her own financial future and private investments are on the line. Marcus offers $800,000 for 50% of the business, which can be used to clear the vendors, create working capital and take care of banking issues. Lady counters with 40% for $1Million to deal with vendor debt. Marcus states he needs to control the process but Lady can be the creative mind, and stands firm. She then says 50% is fine for $900,000, and he can decide how the money is spent. The deal is then made.
The following day, Marcus rounds up the team to discuss what happened the night before. He also says there needs to be a reworking of management, as well as plenty of new store renovations and stock recalculating. Later, Marcus decides to drop by the Chicago location near where he lives unannounced. He’s less than impressed with the dirty store front, and low inventory. The merchandise was a mess, and he decides to have a chat with the manager. It becomes clear that management has nearly no oversight despite the large management structure which further cements Marcus’s problem with it.
Marcus then invites the owners over to the Chicago location to more or less call everyone out. He then discovers that each manager is given freedoms that allow them to make corner cuts to try and make margins effective. He then drops to the basement and sees that a bunch of merchandise is waiting, and are likely to never actually sell. Marcus states he doesn’t know whether to be angry at himself or the staff. He then starts delegating tasks to Tasha, the sales manager, stating that they need to decide what to get rid of to make the store a viable company. He then states that profile definition is needed, and the owner and manager disagree on who the demographic should be (soccer moms with disposable income or a younger demographic respectively). The team then gets rid of a bunch of merchandise, and it’s stated that this is why data is important. He then calls a liquidation sale, which makes the store $15,000 from what amounts to clearing out the basement.
Marcus then brings in an interior designer to make up the Chicago store to be a model for the other locations. Disagreements between Lady and the designer occur nearly instantly with the issue of potentially removing the bar. Marcus defends the interior designer, and Lady says without the bar that they are “G.A.P. on steroids”. Marcus stands firm on a new design, and within 30 days a new look should appear. Then Marcus confronts Tasha on her failures, as there’s a lack of performance. He then encourages her to seek new solutions on her own.
Back in Los Angeles, Marcus sets up a wholesale account a manufacturer for upsell merchandise (T-shirts and hoodies, for example) so the company can survive and get wider margins. Afterwards, Marcus and Lady have a heart to heart about letting go of old ideas, and then visit the LA location to see that sales are up. Marcus is then presented with a map of employees from Tasha, which doesn’t please him as it’s far too complex. She then further disappoints him by not wanting to take a floor leadership role. Lady takes a stand and puts her in the proper role.
Back in Chicago, the rennovations are revealed, including a new name: Denim and Soul. The new name came with a much more refined personality and flavor, while still keeping some New Orleans soul to it. This turns out to be a great moment for Lady, who loves the new store design, fixtures and even inventory. The two joke about there still being a “jean bar”, but it being more self service. Finally, he shows her a permanent fixture of an image of her mother in the store, showing she can still honor the past but look to the future.
Blues Jean Bar Now in 2018 – The After ‘The Profit’ Update
