RANCHO SANTA MARGARITA – The piles of boxes cluttering the floor is what jumped out at Marcus Lemonis as he walked through the door of Amazing Grapes Wine Store in Plaza Empresa.
After spending some time at the store and time talking to employees, Lemonis, star of “The Profit,” a CNBC reality show in which he invests in struggling small businesses in exchange for an ownership stake, also discovered other issues.
The wine store owed $540,000 to vendors for inventory, most of which was stacked up inside the store. The business was losing money despite generating about $3.5 million a year in sales.
Still, Lemonis believed in Amazing Grapes’ potential and wrote a $300,000 check to buy into the business.
The store was featured earlier this month on “The Profit.” The April 8 episode showed the transformation of Amazing Grapes as Lemonis and the employees clashed with a former owner.
The episode became the most-watched original series telecast in CNBC history, averaging 590,000 viewers, CNBC spokeswoman Beth Goldman said.
“There wasn’t really anything staged,” said Michael Maley, the wine store’s general manager. “It was all genuine.”
Amazing Grapes opened in 2004. The store struggled to stay afloat after the economy tanked in 2008, and one of the owners applied to get help from Lemonis in October, Maley said.
The store would have closed by June had it not received help, Maley said.
After researching the business through Skype interviews and visits to Amazing Grapes, Lemonis and his team selected it for his show from among more than 1,000 applicants, Maley said.
“What really made me confident to do it was that it was making almost $4 million in revenue already,” Lemonis said.
Lemonis bought 76 percent of Amazing Grapes for $300,000 so he could take full control of the business. He retained 51 percent and gave 25 percent to the existing managers. The initial owners, who could not be reached for comment, retained 24 percent.
Lemonis transformed the business with an emphasis on creating high margins. He pointed out that the bar, the most profitable business, was tucked into a corner, taking up 10 percent of the floor space.
“We want our patrons at the bar to actually get up and buy a bottle or a case of whatever wine they were just drinking,” Lemonis said in the show. “It’s common sense to have the bar help drive retail sales, but you can’t do it if it’s across the other side of the room.”
He closed the store Dec. 29 for $323,000 in renovations. He got rid of aisles of wines and placed retail products along the walls. The 1,600 types of wines sold in the store were cut by half to focus on high-margin products, Maley said.
The bar and kitchen were expanded and 25 dining tables were placed in the middle of the 5,000-square-foot suite, which now looks more like a restaurant than a retail store. The bar now has 18 beers on tap, up from four, to attract new customers.
Amazing Grapes reopened Feb. 8, and the business has been better across the board, Maley said. The bar and restaurant used to generate $3,000 in sales on good nights, but they do about $8,000 now, Maley said on the show. Retail sales increased by 10 percent to 15 percent.
Jerry Crowther, who used to shop at Amazing Grapes about once every few months, visited the store the day after watching “The Profit” episode.
“It’s a hell of a transformation. I’ve never seen this place with so many people,” Crowther, 53, of Dove Canyon said. “It’s more open, and now it’s a place to hang out. I’ll keep coming – maybe more often now.”
Lemonis said he plans to be at the grand opening, set for May 10. He said he wants to open another Amazing Grapes in Chicago by the end of the year.
“This is one of the better experiences I’ve had in fixing businesses, because I’ve gotten to work on the front lines with the people that actually make the business run,” he said.
Article sourced from http://www.ocregister.com/articles/store-611204-lemonis-grapes.html