Marcus Lemonis is proving his chops in yet another U.S. industry--the $60 billion pet supplies sector.
On the season premiere of CNBC's The Profit, Lemonis invested in Chicago-based pet food business Bentley's Corner Barkery. Founded in 2008 by husband and wife team Giovanni and Lisa Senafe, the company specializes in pet food made with all-natural ingredients, and bills itself as a "Whole Foods for pets." The Senafes were inspired to start the company after two of their cats died of cancer, something Lisa believes was related to eating unhealthy pet food.
Though the Senafes' seven stores generated more than $2 million in the first half of 2015, the business was still losing money. Here are three problems Lemonis addressed to turn the company around.
Bentley's Corner Barkery saw a spike in demand for healthy pet food soon after opening, leading the co-founders to open new locations and even acquire a separate pet food store. Focusing on expansion before getting the fundamentals of the business exactly right, however, produced problems at each store that the Senafes had no time to fix.
"One of the most important parts of an acquisition is being able to integrate that new company into an existing platform, but that assumes that there is a platform," Lemonis says in the episode. "Gio and Lisa's biggest struggle is their exuberance to grow is outweighing the prudence to do it well."
2. Lack of consistency.
Because each Bentley's Barkery featured a different look and layout, the business had no brand identity, with each store being run by different managers with their own operating styles.
"In any business, there should be one leader that is setting the tone, whether that's the way the store looks, how they merchandise, or the product they order," Lemonis says.
3. Alienated customers.
Though Bentley's Corner Barkery specializes in all-natural pet food, the Senafes refused to offer all-natural products from brands that also sold pet food with chemical preservatives. This decision limited their selection, giving customers no choice but to buy high-end products.
"As a retailer, you have an obligation to deliver to the consumer the choice to make that decision on their own--not for them," Lemonis says.
After renovations that gave each store a consistent design and a new product mix that offered more affordable items, Lemonis grew daily sales from around $3,000 to closer to $5,000.
"It wouldn't surprise me if, in five years, this company had 100 stores around the country," Lemonis says.