The fashion industry has a merchant prince waiting in the wings — Marcus Lemonis, the star of CNBC’s reality show “The Profit.”
Under the umbrella of the two and a half year old Marcus Lemonis Fashion Group, he has invested in brands selling jeans, ready-to-wear, cashmere, scarves, T-shirts, footwear and watches. His investments include Inkkas Shoes, Printed Village, Flex Watches and Susana Monaco, and last fall, Lemonis discretely launched Marcus, a specialty chain selling women’s contemporary fashion, footwear, accessories, books, home decor, chocolates, gifts and the artwork on the walls. It’s moving fast, with 21 stores up and running already, most converted from other small retail operations in which Lemonis invested.
“I saw an interesting void in the market,” Lemonis said, citing the demise of Scoop and Barneys Co-op shops and how Intermix hasn’t had the same panache since Gap Inc. bought it in 2013. “Scoop went out of business, when they took Stephanie out of the equation and put in a mass buying process,” Lemonis said, referring to Stephanie Greenfield, Scoop’s founder, who sold the business to private equity firm Yucaipa Cos. “They didn’t differentiate product and signed leases that were outrageously big…The challenge in my mind is can retailers manage their cost structure. If you run the right cost structure, the business lasts forever.”
The real pressure point in retail, “It’s all built around rent. Period. End of story,” he added.
Speaking exclusively to WWD, Lemonis opened up about his strategy for Marcus — its distinctions, growth plans and why, at a time when retailers up and down the price spectrum are downsizing, he’s advancing a new bricks-and-mortar concept.
Aside from perceiving a void in the market, he’s a fashion lover. Lemonis said he craves the fast turn of the inventory — eight or nine times a year at the Marcus stores — and discovering up-and-coming brands in which to invest. Certain businesses he’s taken stakes in — be it stores, products or people — have been integrated into the Marcus retail operation, including 20 percent of the assortment.
At the Marcus stores, “We have great third-party brands, both established and up-and-coming, [interwoven] with brands that I own,” Lemonis said. “I love finding up-and-coming brands at smaller [trade] shows or start-up brands and giving them a shot. I make a small investment, provide a little funding to give them wind behind their sails.”
In exchange, he gets favorable terms on orders for Marcus stores. “You have to have 60 percent plus margins,” Lemonis said. “You have to have relationships with vendors that are consistent, that give them the volume they need and enable you to get enough discounts so it works for both sides. Across all of my stores, I may have 30 vendors. They are getting real volume. In exchange, I expect to get a reasonable discount. My idea isn’t to strong-arm the vendors. It’s to say everybody has to make money for this to work.”
Much of the motivation for launching Marcus comes from his late adopted mother, the most influential person in his life. “She was very fashionable,” Lemonis recalled. “She always dressed me to the nines.”
Marcus was born in war-torn Beirut, Lebanon in 1973, and at nine months old was adopted by a Lebanese and Greek couple living in Miami. “Mom and Dad both worked, and she worked 40 hours a week, earning $362 a week, managing an office building in downtown Miami. Burdines [which converted to Macy’s] was the only place she shopped. She would go to Burdines on her way home and bring me a new shirt every single Friday, for $55 or $60. I was 13 years old and I remember my mother saying, ‘For people to take you seriously, you have to look good.’ She would spend 20 percent of her paycheck buying me a shirt.” She died three years ago.
Lemonis, whose personal style has evolved from nerdy to cool, is big on Tom Ford crewnecks, and very big on white Brioni shirts. “I literally have 60 of them.”
“When I first started making the show, I wore khaki pants with loafers and socks. Then I started wearing jeans because I got into the jeans business. Then I started wearing sneakers because I got into the sneaker business. I really started wearing the male version of what we carry in Marcus. You’ve got to live the lifestyle. We sell a lot of jeans, sweaters, embellished T-shirts, great outerwear…The only thing I won’t let go of is my white shirt.
“Today, if you went into my closet, you’d see it’s very organized. Shirts are organized by color, by stripe, by sweaters. I merchandise my closet. That’s how I learned to merchandise my stores.”
Lemonis first entered fashion retailing when a family business on Manhattan’s Upper East Side, called Courage b, appeared on “The Profit” in 2014. Courage b locations have been converted to Marcus shops, and Lemonis tapped one of the members of the family, Stephanie Menkin, as president and a partner in the Marcus Lemonis Fashion Group.
Lemonis lives in Lake Forest, Ill., with his wife Bobbi, who, like Lemonis, is deeply involved in the buying and merchandising. They were married Feb. 17 after meeting two years before at the Coterie trade show. “She came up to me and asked me to buy her boutique.” Smitten, Lemonis bought her Runway store in Deerfield, Ill., which he said was in great shape, unlike the businesses seen on “The Profit.” He opened additional Runway shops, which he later converted to Marcus stores, as he did with the Courage b stores.
The first Marcus store opened at 110 East Delaware Place in Chicago last October. The newest opened a month ago at 402 West 13th Street in Manhattan’s Meatpacking District. The store has a hip look, with chandeliers; a polished concrete floor; high, exposed ceilings, and no mannequins. It will be the scene of the official Marcus launch party Thursday.
“We get shipments daily. About 20 percent of the store changes each week,” said Menkin during a tour of the Meatpacking location. “The idea is we have to keep it fresh and new. We’re into something, then we’re not.”
The largest category is sweaters and tops including colorful, embroidered sweatshirts and T-shirts from Lauren Moshi; cashmere sweaters from Autumn Cashmere; basic sweaters and T-shirts from The Line; activewear by Koral; Blanc Noir ath-leisure, and yogawear from Spiritual Gangster.
Denim, a key category, ranges from DL 1961, a technical line, to McGuire, a contemporary, trendy brand with unique zipper treatments, stripes and other accents.
The store also sells Brooklyn-based Kempton bags; Ellison eyewear handmade in Greece; A.M Marcus Anthony silk blouses; leather Sangria Sandals, and Marcus-branded candles. Other brands include ATM, Agolde, Rebecca Taylor, The Kooples, Theory, Zadig + Voltaire and Halston. Plans are to introduce chairs and ottomans supplied by Grafton Furniture, another company featured on “The Profit,” and kids apparel.
Lemonis sees another four to five units opening in the next 12 to 15 months, and possibly another location in New York City. He targets neighborhoods — malls and urban high streets are avoided. According to Lemonis, the chain is currently tracking at $30 million in volume.
Marcus stores range from 1,500 to 2,5oo square feet in size, though in July, Lemonis will open a three-level, 7,000-square-foot “mini-department store” in an historic former bank building in Hinsdale, Chicago. The store will sell home furnishings, kids, ath-leisure, accessories, jewelry and there will be a candy shop, undoubtedly selling chocolates and other sweets from companies Lemonis has stakes in.
“There’s really a science to it,” Lemonis said, regarding store rollouts. “I understand that every market is different. I can have a store in Meatpacking and sell a sweater for $395 and another store in Arlington Heights in Illinois, where I can’t sell a sweater for more than $155. We really study the numbers.”
The merchandising is tailored to the local market and its climate, down to the weight of the fabrics, the color palette of the mix, and the prices. Still, there’s a consistency from door-to-door in terms of the overall aesthetic, taste level, emphasis on layering pieces and categories sold.
On “The Profit,” Lemonis invests in small, distressed businesses of all types with an eye for making a profit by rescuing and rebuilding the operations and salvaging jobs. In the process, he sometimes finds himself caught up in uncomfortable confrontations with partners resisting relinquishing control of the company despite agreeing to, or being less than transparent with financial obligations.
The exchanges, Lemonis said, are real. “It’s not scripted. Unfortunately, that’s why the show sometimes goes very bad. They forget about the camera.” But like a white knight with a heart of gold, he’s prone to giving people second chances. All told, he has ownership, partial or full, in over 100 companies.
With retailing, Lemonis realizes compelling experiences must be created to get the traffic back. Yet as he sees it, the answer isn’t so elusive.
“It’s not about fireworks and unicorns,” Lemonis said. “Make the stores relatable and approachable. I want people to walk into my store, and see fun T-shirts, candy, chocolates, sunglasses so it feels like anybody can shop there. People buy with their eyes. There shouldn’t be barriers, like a museum, where you can’t touch anything.”