![]() ![]() lemonis: do you have children now? lulu: i do. when i moved here, i had an idea of what my children were gonna be named one day when i had children. lemonis: can you explain the name to me? lulu: yeah. lemonis: any boutiques? lulu: we're in goop, in their boutiques, and then we're in small boutiques. lemonis: and how about any department stores? lulu: no, we. lemonis: so black is core, no problem, but core isn't gonna get you to a million bucks. lulu: it's hard to go back to the same customer, you know, several times a year and have her buy a handbag. That there's a possibility that lulu isn't designing products that will get customers to come back on a repetitive basis. lulu: yeah, and it's actually very confusing because also, lemonis: well, it's just the way you're accounting for it. was that because you were building inventory? lulu: because you have inventory. i'm a little confused on why the cost of goods was higher than revenue, and you showed a negative gross profit. lemonis: this is the financials? lulu: yeah. lulu: well, this is very important to me. lemonis: well, you would be one of very few. lemonis: the fact that you have a folder. lemonis: so one compliment - the preparation that you have ready. lemonis: do you have any financials with you? lulu: i do. lulu: this is really where i think i need a lot of help because we've lost a lot of money trying to promote the company. Lulu: so, scott, my husband, we put roughly $175,000 in. lemonis: the kind of elements that i'm looking for are little items around hardware - zippers, the lining on the inside, anything that you can think of that's a detail that somebody would notice and see value in. i know it's a good-quality product, but she's not clearly telling me why the price is justified. lemonis: the number-one impediment to growing this business is getting the perceived value of the product right. the consumer is gonna say, "for the same amount of money, i'm gonna buy a brand." lulu: that's our exact conversation all the time. what are those price points? lulu: most expensive is around $400 retail. and in order to repeat purchases, she's gonna have to innovate with color, shape and size and materials. in order for lulu to ultimately grow her company, she's gonna have to establish a customer base and then get them to repeat their purchases. The bags that you design, you can't just do black on black on black on black. lemonis: so, lulu, what i would ask you to think about is, lemonis: you don't like color, huh? lulu: i don't love color. lemonis: is everything black? lulu: we have to have the black always. these are the crossbody that also becomes a bum bag. so where is your core collection? lulu: we have a core collection. lemonis: my first impression of the actual product is that it seems to be of good quality, and it doesn't look like lulu is skimping on the quality of the leather or the quality of the hardware. we've been working with goop for about 3 years and have done custom collections for them. lemonis: are these all yours? lulu: yeah, they are. my whole life, i've always, like, sewn my own clothes and sketching and done art. lemonis: why did you get in this business? lulu: i was trained in haute couture from a designer in paris, actually, a danish designer. florence: oh, you think so? let's see that. Lemonis: you and i are going to be really good friends. lemonis: are you also a patternmaker? florence: yes. lulu: she's produced for us from day one, from 2013. lemonis: how are you? florence: hi, marcus. ![]() ![]() but can you be unique and follow the trend? lulu: this is florence, our production manager. now i know that there's this idea about being unique, and that's fine. lemonis: i find it odd that lulu tells me right out of the gate that she doesn't follow trends. lemonis: okay, because i'm going to keep asking you that. lemonis: is that you or the business? lulu: me. how we designed it up until now is, we actually have a core collection, and we really don't go with trends. lemonis: so this is the equivalent of a copacker. this is where we design, so we have everything made here and shipped out of here. so this is actually the production facility,Īnd they have a couple of different clients. lemonis: are you lulu? lulu: thanks for coming. about a year ago, i received an application from a company called lumillamingus, which was started about 6 years ago and continues to struggle. man: yeah! lemonis: this is "the profit." ♪ i've always been interested in investing in the multi-billion-dollar leather industry because it allows for great margins and great sell-through. lemonis: it's not always easy, but i do it to create jobs, and i do it to make money. I'm marcus lemonis, and i risk my own money to help businesses. ![]()
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