In 2004, Lady Catherine Reiss-Fuller opened the Blues Jean Bar in San Francisco. The high-end jeans retailer was founded on the concept of customers ordering blue jeans behind a bar as if they were ordering a drink.
Lady’s mother died when Lady was a young girl and left her an inheritance that Lady wanted to turn into a legacy. Her father was a successful businessman in his own right and Lady wanted to take the combined talents of her parents to make Blues Jean Bar a success in their honor.
Blues Jean Bar had expanded to 12 locations throughout the country, but fierce competition and an inability to properly manage the finances of the business was putting a strain on the growth and success. As hard as she tried, Lady found herself and her business in some deep financial problems. Mismanagement of the company had put Blues Jean Bar in serious financial jeopardy. She looked to entrepreneur Marcus Lemonis and CNBC’s The Profit to see if she could regain control of the finances and continue her mother’s legacy.
Denim & Soul formerly Blues Jean Bar on The Profit
The Profit Season 3 Episode 11
The first thing Marcus notices when he meets Lady, at the flagship location in San Francisco, is the ineffectiveness of the setup model for the store. Even the term “belly up to the bar” seems inappropriate for a clothing store. Customers are not even allowed to touch the merchandise without the help of an employee, which goes against the bar concept and limits one of the selling points in the fashion industry, the ability to touch the merchandise. Marcus consults with a customer in the store, who confirms his concerns.
Marcus tries on a few pairs of jeans, but they do not have his size. The name “Blues Jean Bar” is an honorary tribute to Lady’s New Orleans beginnings, but Marcus feels it does not flow and does not have a very “bluesy” ring to it. Setting that aside, Marcus focuses on the store’s profit margins and how to improve them. While most successful fashion stores operate at a 60% profit margin, Marcus was disappointed to learn that Lady was pleased with an improvement to 50% for Blues Jean Bar. Lady explains that she has been trying to pay back her debts while trying to keep her inventory stocked and remain profitable.
Only three of the original 12 Blues Jean Bar locations remained when the others failed to make a profit. Lady ended up losing $500,000, despite generating over $8 million in sales. Business liabilities are 10 times that of the assets.
Marcus offers Lady $800,000 in exchange for a 50% equity stake in Blues Jean Bar. The money would be used to pay off vendor debt and create capital to run the business operations. Lady proposes a counteroffer of $1 million and only 40% of the business. Marcus said he needs to have financial control, but she could retain the creative direction. She agrees to the 50% but wants $900,000 and Marcus can make the decisions on how to spend it. Marcus agrees and a deal is made.
Meeting at the Chicago location, Marcus discovers a good deal of merchandise in the basement that is not likely to ever sell. He is not sure who to be mad at, the staff or himself. A liquidation sale is effective in cleaning out the basement, bringing in $15,000 in the process.
Lady and the sales manager, Tasha, argue over the fine-tuning of their target demographic. Lady thinks they should be going after soccer moms with a lot of disposable income, while Tasha feels they would be better off seeking out a younger customer base.
Marcus plans to make the Chicago store the model for all other locations. He brings in an interior designer, whose first suggestion is to get rid of the bar. Marcus agrees with the designer, but Lady pushes back. The bar is the defining feature of the store and the reason the name makes sense. Marcus does not budge and says renovations should be completed in the next month.
Marcus confronts Tasha regarding her lack of performance and cohesiveness with the rest of the staff. Later, she presents him with a complicated map of the employee line of command. She then refuses to take a floor leadership role. Lady eventually puts Tasha in a proper role that best suited her and the success of the company. The biggest takeaway was Lady learning how to better manage her company and her staff with Marcus’ support.
Setting up a deal with a wholesale merchandiser in Los Angeles, Marcus develops a plan to increase profit margins by adding high-profit merchandise like t-shirts, sweatshirts. Marcus and Lady visit the Los Angeles location, where sales have increased. Marcus uses this as an example of how Lady needs to let go of old ideas that are holding the business back.
The renovations in Chicago were completed and a new name for the company was revealed – Denim and Soul. The rebranding included a more refined character and style while maintaining the original soul of New Orleans. Lady is very pleased with the new design and even the changes in inventory.
Marcus ends by showing Lady a permanent fixture in the newly remodeled store that links the past with the future. The image of Lady’s mother honors the past and allows her to look towards the future together.
Where Are They Now? Blues Jean Bar After The Profit
Denim and Soul, formerly Blues Jean Bar grew back to 11 locations in Jacksonville, Dallas, Atlanta, three locations in the Chicago area, several in California including the flagship store in San Francisco. Denim and Soul even opened up a location in New Orleans.
Marcus’ leadership brought a more upscale product and customer in the high fashion marketplace. Eventually, Marcus bought Lady out of Denim and Soul for another $500,000. The business is not under the Marcus Lemonis Fashion Group brand. Marcus considers his involvement in Denim and Soul a great success.
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