I find the guy I'm looking for in the lobby café of a small hotel on Manhattan's Upper East Side. He's wearing a fuchsia V-neck sweater with matching high-top sneakers, which makes him simple to spot, even before you notice the as-seen-on-TV glow. He's eating a bowl of granola with skim milk. It's not what he ordered--he had asked the waitress for raisin bran--but who sends cereal back? Donald Trump, maybe. Not Marcus Lemonis.
Lemonis is in New York City today to shoot an episode of his hit reality show, The Profit, which debuted on CNBC a year ago, soared in the ratings this past spring, and returns for the second half of Season 2 in October. The Profit is a bit like business turnaround shows Bar Rescue and Restaurant: Impossible, except that Lemonis isn't a consultant, he's an investor. In that way, The Profit is more like Shark Tank, except that Lemonis isn't fielding pitches from wannabes; he's seizing control of family-owned "sick businesses," as he calls them--a car dealership, a flower shop, a candy store--and fixing them. Invariably, things get messy. "In most cases, the people who apply to get on the show are really in need of more than just financial help," Lemonis says gently, and when he offers more, as he often does--by calling out a bully boss or defending an overworked and underappreciated employee--that's when viewers might see parallels with Dr. Phil or even the Dog Whisperer. A lot can happen in those 40 unscripted minutes.
While The Profit was on break, Lemonis kept going. He dove back into his day job as CEO of Camping World, a fast-growing, $3 billion national chain of recreational vehicle dealerships, and Good Sam, an affiliated RV travel club. He visited tiny Horton, Kansas, a failing prairie hamlet that he's been trying to rescue with the same mix of cash, know-how, and entrepreneurial passion he brings to struggling small businesses on The Profit. And, through his personal investment fund, he bought more companies--notably Crumbs, the gourmet cupcake chain that he and a partner have vowed to rescue from bankruptcy.
"I'm tired," Lemonis tells me before he leaves for the set. "I'm tired." I believe it. He also insists he's having a blast, and I believe that, too. But with each new episode of The Profit, with every sideline acquisition, Lemonis takes on a whole new set of open-ended commitments. "I have trouble falling asleep," he admits. "I have trouble shutting my mind off." And though the incessant mental chatter is often about work, just as often it's about the opposite--all the regular life stuff he has no time for.
"Working and being involved in multiple businesses and fixing things has almost turned into an addiction," Lemonis says. He knows it's not healthy. "But I can't seem to want to change it," he says. He is who he is, and it's taken him this far.
Lemonis was back at his old high school in Florida not too long ago, where he spoke to a group of alumni. During the Q&A, a man he recognized as a former classmate asked him for his email. Lemonis is not typically shy about sharing his contact information; his email address is posted next to his picture at the entrance to every Camping World location. If you send him a note, or a tweet, or if you comment on his Facebook page, he promises to respond, personally and without delay. But this man didn't know that. Nor did he seem to remember that before Lemonis was somebody, his classmates had treated him like a nobody.
"Absolutely not," Lemonis shot back. "I didn't come to the school reunion--you want to know why? Because I had two friends I went to high school with and you're not one of them. The lesson here, man, and you should teach this to your kids: You never know who somebody's gonna be, or what they're gonna do. So why not be nice to everybody?"
Lemonis was adopted from an orphanage in Beirut when he was 9 months old. He grew up in Miami. His mom came from money. His dad was a blue-collar guy who worked for his father-in-law's Chevy dealership in the parts and service department. The couple went to a lot of parties and Lemonis went with them, their darling only child all dressed up in a little coat and tie. "I became very comfortable communicating with adults," Lemonis says, but he struggled to connect with kids his age. "I never had any dates. I didn't get invited to parties. I didn't have any friends to speak of." The most exciting part of his day was getting off the city bus on the way home from the Catholic school he attended across town, he says, "because I knew I'd always see the ice cream man." He put on a lot of weight; by eighth grade, he was up to 196 pounds. Then, he developed an eating disorder and lost the weight too fast.
The stories Lemonis tells about his youth are like chapters in an endless saga of reinvention. (The term he uses is rebranding.) He tried playing sports--discus on the track team, long snapper on the football team--but he wasn't very good. He tried religion, and since he was having no luck with girls anyway, he thought, "Maybe I'll just be a priest and the other priests will have to like me." That didn't work out either.
For college, Lemonis chose Marquette in cold, faraway Milwaukee, and then spent the summer before freshman year exercising furiously. "I thought if I can get in real shape, like super fit, I could be that cool, tan guy from Miami." He was forever running for office--three times for student body president at Marquette--and was forever getting trounced.
What finally started working for Lemonis, quite simply, was work itself. Some people believe in the transformative power of faith or love or education. Lemonis was all about the transformative power of business. "The only thing I did well," he says, "was learn how to make money." He became Marcus the candy dealer ("Maybe the other kids will like me if I'm the candy kid"), Marcus the lawn-care guy ("I would be the pitchman, sign up the yards, hire the kids. I learned the art of persuasion"), and eventually, Marcus the club promoter ("I used to make, on a Sunday, just from the door, two, three thousand dollars"). In time, Lemonis began feeling better about himself. (Although to this day, he says, he's still "haunted" by his eating disorder: "I struggle with weight and its effect on my self-perception.")
Back home in Miami after college, armed with a political science degree, Lemonis joined the family business. It wasn't a good fit; he found the atmosphere oppressive. After seven months, he announced that he was running for state representative--as a Democrat, no less; all his relatives were Republicans--and his grandfather fired him. He lost the election, but he met a lot of powerful people during the campaign, one of them a lobbyist for billionaire entrepreneur Wayne Huizenga. That led to a job at Huizenga's AutoNation.
AutoNation was like B school for Lemonis. "I learned a ton," he says. The national roll-up strategy Huizenga devised for car dealerships was the same one Lemonis would later adapt for RVs at Camping World. ("We did it a little better" at Camping World, Lemonis claims.) That is, find an industry ripe for consolidation, one dominated by family-owned companies, that deals in a product that's not a fad, where technology and sophistication aren't the main drivers, and where the demographics are in your favor. And never forget that it's better to own a small piece of something big than a big piece of something small.
Still just 26, Lemonis left AutoNation after four years for the chance to run a struggling publicly traded company called Holiday RV Superstores. The situation was fairly desperate, which may explain why he got the job. (It didn't hurt that Lee Iacocca, whom Lemonis describes as "a family friend," was on the company's board.) His first day, Lemonis says, Bank of America called to tell him his floor-plan loan--revolving credit used to buy inventory--was in default. Lemonis spent a year and a half recapitalizing the company. Impressed by his chops, Bank of America and JPMorgan offered in 2003 to finance an aggressive roll-up campaign. That was the birth of today's Camping World.
Lemonis targeted mom-and-pop shops where the transition to the next generation was unresolved. John Sirpilla, now Camping World's chief business development officer, remembers the day 10 years ago that Lemonis showed up at his dad's house in Akron, Ohio, bearing cash and equity. Over lunch at the kitchen table, they cut a deal. Everywhere he went, Lemonis was careful to tweak the wording of his pitch--his prospects all knew each other from industry gatherings, and he assumed they would talk--but the bullet points never varied: a lucrative exit ("I gave each of them a piece of the action"); the chance to be a part of something truly grand; and for the hesitant, a poker-faced heads-up: "I'm gonna do this. Either you're gonna be on my team or I'm gonna run you over."
"I don't want to call it smoke and mirrors," Lemonis says now. "I'll call it a 'parlay.' In a six-month time frame, I signed up nine guys around the country." He had found his calling.
Do you love what you do?" Lemonis is asking me. I don't answer right away. Frankly, I'm a little ambivalent. Aren't most people? Not Lemonis.
He loves pulling up to Camping World's newest store in Saukville, Wisconsin, in his big black SUV, charging in unannounced just like on TV--"Hi, I'm Marcus!"--while salespeople spill from their cubbies and customers gawk. "You really opened a week early, didn't you?" Lemonis tells the store manager, locking eyes. He's not happy with the way vehicles are arranged on the lot. He wants better signage fronting the highway. And he wants the greeting desk to be across from the entrance instead of off to one side. But the wiring is already in place, the manager points out. "They can move it," Lemonis says.
The Profit takes Lemonis away from Camping World for long stretches--eight full days per episode, four to five months per year, and he's got three more years on his contract--but he loves that, too: doing deals, nurturing talent, solving problems, and making money, all the while cultivating influence, recognition, and respect, for himself and his companies. He's not interested in the stock market. He doesn't gamble. He doesn't bet on sports. He doesn't fund startups or buy perfectly good companies that don't really need his help, because what's the fun in that? "I want to prove to people that every single business can be reinvented and fixed," he says. "And I want to prove to myself that I'm good at it."
The locales and businesses vary, but once you've watched a few episodes, the plot lines unfold with soothing familiarity. Lemonis arrives on the premises, cameras in tow. He requests a tour. He asks a lot of questions. He sizes up the workforce. Then comes the dramatic sit-down with the owners, often a husband and wife, which includes the frank assessment, the offer, the flourishing of the check, the stipulation ("I'm in charge now"), the pushback (often from the husband), the don't-be-stupid-take-the-money (often from the wife), and the handshake. Then comes the inspirational staff meeting, concluding always with these words from Lemonis: "We've got a lot of work to do!"
Typically, that work centers on what Lemonis calls "process"--the application of "some very basic principles" to businesses that don't seem to have a clue. "Fixing the underlying margins and costs and process is not the hard part," Lemonis says, though those are issues that frequently emerge. The hard part, he says, is boosting revenue at these small outfits that have few customers and little brand recognition. HR issues also loom large. Lemonis can be brutally honest one minute ("You're a thief and a liar and a cheat!") and go all touchy-feely the next ("Who are the employees you think you've hurt the most emotionally?"). He loves to incentivize key employees with equity, as he did for the managers at Amazing Grapes, a California wine store that had languished under absentee owners.
Sometimes Lemonis takes a haircut, but overall he makes an excellent return on his on-air investments. Essentially, The Profit works like a turbocharged prospecting tool. At last count, he had received around 40,000 applications from companies begging for his help. And if a candidate isn't quite right for the show--"Marcus's criterion is money," says his producer, Amber Mazzola, "mine is good TV"--then maybe it will work for his investment fund.
CNBC would love to feature Crumbs in an upcoming episode of The Profit, but Lemonis is resisting. He worries about preserving the integrity of what qualifies--at least within the alternative-reality world of reality television--as a very real undertaking. His fee per episode doesn't even cover his travel expenses. He gets no royalties, no syndication, no back-end rights whatsoever. And when he writes a check and takes a stake, he's putting his own money at risk. It would seem that Lemonis negotiated an uncharacteristically bad deal for himself, but he claims the arrangement keeps things "super real and raw." If he were to put a company he already owns on air, it "could seem like a paid advertisement," he says.
Then again, there are few hard boundaries in Marcus World. He's always on the lookout for scalable mashups. One of the companies he bought this spring, Little Miss Muffin, makes cupcakes for Crumbs. Put them together with three investments he made earlier on The Profit--Mr. Green Tea Ice Cream, Key West Key Lime Pie Company, and Sweet Pete's--and he thinks he has all the right ingredients for an empire of desserts. Visions of red velvet cupcake ice cream and other confections dance in his head, alongside some big numbers: $7 million (the total he has invested in eight companies so far on air via The Profit) and $14 million (the current estimated net asset value of those initial investments, accounting for hits and misses--see "The Profit [and the Losses]" on page 102).
Of course, the TV show holds another appeal for Lemonis, who revels in the public attention. He made his TV debut a few years ago as a challenge sponsor on Celebrity Apprentice, and he did an episode of Secret Millionaire. But The Profit was a big step up. Lemonis was approached by a production company, which set up a meeting with CNBC president Mark Hoffman. Lemonis says Hoffman warned him, "Look, I need to tell you up front, nobody watches our programs at night." (Hoffman: "If I said it, I said it off the record.") "I said, 'You know what? I'll fix that. I will fix that.' " Improvement from "nobody" is a low bar, granted: The Profit attracts up to 700,000 viewers, according to Nielsen, compared with upwards of 15 million for a top-rated show on a major network. Still, it's CNBC's most-watched original series in the key 18-to-49 demographic. And, together with its Tuesday night lead-in, Shark Tank reruns, The Profit has helped make CNBC the fastest-growing cable network in prime time.
Lemonis turned 40 in November. That's a big one. Lying in bed, unable to sleep, he's at least as hard on himself as he'd be on a company he was trying to fix. "I think about what I didn't get to do," he says, "or what I missed out on. By no stretch of the imagination do I resent it. It's self-inflicted. But I missed out on a lot of things."
He thinks about the weddings of his two best friends that he was too busy to attend, about his marriage that didn't last, about the vacations he never took with others (and the ones he takes alone to Disneyland: "I like seeing the families there with the kids"), about a life so filled with performance and demands that all he wants at the end of another busy day is to be by himself. "I'm 40 in terms of my business experience," he says, "and I'm 20 in terms of my emotional maturity." He has some catching up to do. But he's working on it.
The Profit (and the Losses)
Lemonis has vetted 14 companies on The Profit and invested a total of $7 million in eight of them on air. (He has since plunked in even more.) "My ultimate goal is to make a reasonable return," he says. "If I can average 15 to 18 percent on my money, I'm happy. Which means I've got to hit a couple out of the park, right?" So far, so good. He estimates the current net asset value of his Profit portfolio at about $14 million. A few of the winners and losers:
Company: Mr. Green Tea Ice Cream, an ice cream manufacturer in New Jersey
Initial investment: $1 million
Outcome: Since Lemonis brought manufacturing in-house, margins have increased, sales volume is up 50 percent, and the valuation has jumped from $2.5 million to $7.5 million. Lemonis is integrating it with his other sweet investments, including Crumbs.
Company: AutoMatch USA (formerly Athans Motors), a car dealer in Illinois, Florida, and Utah
Initial investment: $3.5 million
Outcome: After a rebranding, AutoMatch USA opened three new locations, with three more coming soon. It also absorbed another Lemonis venture, car-buying service 1 -800 Car Cash. He's now in for $7 million, his biggest investment on the show and "potentially my most profitable," he says.
Company: A.Stein Meat Products, a New York City--based wholesale meat distributor
Initial investment: $200,000
Outcome: "My biggest disappointment," says Lemonis. He had covered payroll in exchange for rights to the company's Brooklyn Burger brand. A.Stein Meat still hasn't handed it over (or returned his money). He is suing.
Company: Skullduggery, a toymaker in California
Initial investment: $200,000
Outcome: Lemonis tried to broker a Nascar license for the toy company, but the founders blew the meeting. Skullduggery's owners backed out of the deal, and Lemonis took a loss on the capital he had already shelled out.