Greg Schroeder loved collecting wine. He would drive over 35 miles in southern California to find a suitable wine store. So, he opened Amazing Grapes in Orange County and saw $3.5 million in sales the year before appearing on The Profit. The problem was that Greg had not yet made a profit, and was hoping Marcus Lemonis could help. He hoped that The Profit could help Amazing Grapes achieve higher margins and begin making money.
Amazing Grapes on The Profit
The Profit Season 2 Episode 7
Marcus probably wishes he would have seen the signs, particularly the one outside of Amazing Grapes – it became dislodged from its hooks right before his very eyes on his way into the store. Unfortunately, things would not get better from there. Wine boxes cluttered the storefront space, and the place was a mess.
Marcus walked around the facility, talking to some of the employees. Greg was nowhere to be found, which apparently was a standard procedure of the operation. Inventory was everywhere, and Daniel, who introduced himself as the “beer guy,” told Marcus that Greg was in control of the buying process and was continually over-ordering products.
The wine bar area looked out of place and appeared to be a completely separate business unconnected to the rest of the shop. Marcus felt a more centrally located wine bar would do more to encourage customers to purchase the wines they would drink at the bar. Mike oversaw the kitchen, which he said was generating around $500,000 a year. He was not in charge of the layout design.
Marcus rarely invests in companies that have absentee owners. The retail manager, Matt, admitted that Greg makes appearances at Amazing Grapes just a couple of times a month. Marcus liked the staff and thought the employees were doing an excellent job with what they had to work with, and what they did not.
Owner Finally Arrives, Lies to Marcus
When he finally arrived, Greg started off his relationship with the man he was hoping would provide funding and expertise to help his business by lying to him. Marcus asked Greg if running Amazing Grapes was his full-time job. Greg defensively responded that he comes to his wine shop three or four times a week. Setting aside that a 3-4 day work week did not even qualify as a full-time job when Greg was called out on this, he simply said his employees were running things fine. Marcus moved on to the financial breakdown of the business.
The fact that Amazing Grapes was generating millions in sales was made irrelevant when Greg was not making enough to cover operating expenses. The most profitable aspect of the business was the bar, so Marcus suggested reducing the retail space and featuring the wine bar.
Greg’s co-owner and the manager of the finances, Bill Gary, explained that their silent partners were unwilling to invest more money in the business with over $1 million invested already. Marcus suggested they make the company liquid to pay off the vendors they owed and shut down the business. Greg protested the idea, saying he loved the business, even though he was rarely there. Marcus offered $300,000 in exchange for 51% of the company, which would give him majority interest and control of the operations. The current management team would get 25%, with the rest would go to Greg and Bill.
Without much deliberation, Greg accepted the deal and thanked Marcus for saving his business. Marcus made sure Greg understood that Marcus would now be in total control of the day-to-day operations of the company. The first order of business for Marcus would be to liquidate a portion of the inventory that was not moving and invest it into wine that would.
Stop the Music!
An employee confided to Marcus that when Greg’s band would play at Amazing Grapes, their customers would be turned off by the music and leave. As Greg was setting up the band equipment, Marcus expressed concern Greg was not focusing on the right things that would lead to success. Amazing Grapes was losing money to pay the band and losing customers when they played.
Marcus returned the next morning do discover that Greg’s band drove away half of the customers who had come in. Marcus was unable to reach Greg on the phone to tell him the band had played their last gig at Amazing Grapes.
Getting to work on contacting contractors without Greg, Marcus prepared to shut down Amazing Grapes for a significant overhaul of the store. When Greg finally did the show, he was dissatisfied with the renovations, claiming he has not been consulted, even though he was not reachable.
Greg ultimately promised Marcus he would be more present in the business, and 45 days later, Marcus walked into a new Amazing Grapes. The kitchen was redesigned and spectacular, and the floor space focused on the wine bar, which was front and center of the operation.
Marcus ended the episode by telling the employees how much enjoyed working with them and told them they were all on their way to success and making a lot of money.
Amazing Grapes After The Profit
In the time immediately following its national television debut on The Profit, Amazing Grapes was doing great. With Marcus still in control, the entire web division was fired and replaced after discovering that Amazing Grapes had completed no online sales. Business seemed to be good, and Amazing Grapes was getting positive reviews on social media and other review sites.
Amazing Grapes Shuts Down
Things seemed to go downhill from there. Amazing Grapes shut down operations nearly three years after Marcus’ original investment in the company.
A message posted on Facebook by Dan Isenhart, the former wine buyer, and managing partner at Amazing Grapes, announced the closing with a long list of serious grievances and accusations against Marcus and his management company. The two went back and forth on Twitter, with both threatening legal action.
While little information could be verified about the fate of the business and what really happened, there is really only one thing that is undeniable. After securing a deal and completing renovations that seemed to have been a great success, Amazing Grapes is no longer in business.
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