... giordano: faded royalty designed by rocco. lemonis: a streetwear designer tries to storm the new york fashion world. giordano: we're rebels in the fashion business. we do what we want. lemonis: but he can't get out of his own way. giordano: this is what's been holding me back. lemonis: this is what's holding you back, or you'rwhat's holding you back? he struggles to stay focused... rocco. giordano: no, no, no. we release things -- -lemonis: rocco, rocco, stop. -giordano: all right. lemonis: ...leaving his clothes without identity. nothing feels cohesive. you're all over the place. he's careless about managing money, leaving his friends holding the bat. so you funded, really, the whole business up to now? -man: basically. -lemonis: if i can't find a way to fix the fabric of his company... you can get mad, and you can pout. -giordano: i'm not getting mad. -lemonis: at the end of the day,

you're going to learn how to do it the right way. ...his business will be ripped to shreds. rocco, i don't know if i can do this, man. i really don't. my name is marcus lemonis, and i risk my own money to save struggling businesses. we're not going to wake up every morning wondering if we have a job. we're going to wake up every morning wondering how many jobs we have to do. it's not always pretty. everything is going to change. everything. but i do it to save jobs, and i do it to make money. this... let's go to work. ...is "the profit." ♪ in 2010, new york city fashion designer rocco giordano started faded royalty, a streetwear brand he was determined to grow into a household name. giordano: our whole thing is affordable pricing, good quality. lemonis: he had no formal training. his first venture was selling hats, and after finding early success, he was able to grow his brand, opening three retail stores.

giordano: there's only one rule in business -- stay in business. and i'll do everything in my power to make this work. lemonis: but as time passed, rocco's business couldn't generate enough revenue to cover the overhead. giordano: our business failure is cash flow. aeneas: right. giordano: i'm doing the best i can with little to no money. lemonis: now, with only a single location remaining and over $50,000 in debt, rocco is hanging on by a thread and is desperate for help. giordano: this business, if it went away, it would destroy me. lemonis: part of the reason that i wanted to visit faded royalty is i've recently made a number of investments into the active streetwear space, and this product really fits nicely inside of that. hi. -giordano: how's it going? -lemonis: i'm marcus. giordano: nice to meet you. i'm rocco. lemonis: nice to meet you, rocco. how are you, sir? aeneas: hi, aeneas. nice to meet you. lemonis: nice to meet you. well, this is a cool spot. giordano: the reason why i picked this spot, and i love this spot, it's the lower east side.

it's 50 percent tourists, 50 percent real new york. lemonis: did i catch a little accent in there? giordano: a little bit of an accent, a little bit. -lemonis: where are you from? -giordano: jersey city. lemonis: can i see some of the product? giordano: sure, sure. so these here are cut and sewn in new jersey. lemonis: all men's? giordano: mostly men's, but women can wear some of the stuff. -lemonis: did you design this? -giordano: i designed that. i do everything. -lemonis: good nice color. giordano: that's a really interesting piece. lemonis: this is a nice shirt. giordano: it's a very nice shirt. this was one of our first things. lemonis: it's got the high low here. giordano: it's got this slight high low for extended. lemonis: for a normal person, it's got a little bit of stretch. -giordano: this sells. lemonis: this is a totally different look. giordano: this is my funky. you always got to have a funky one. lemonis: i don't dislike any of it. i just didn't understand how it connected to everything else. giordano: there's a hat here that ties back into it. this hat gave me the idea -- lemonis: could somebody say you're shooting from the hip all the time? giordano: not all the time but most of the time. lemonis: what i liked about rocco's designs is that they had a combination of streetwear mixed with high fashion. it had good bodies to it and good color and good prints.

the challenge that i'm having though is that none of them really connect to another. is it for somebody that's 50 that lives on the beach, or is it somebody that's 19 that skates in the skate park? pick a lane, dude. just pick one. how do you put your collection together? giordano: i start taking elements of what i see, what i see people wear, what i see that's out there and just throwing them together. lemonis: really? giordano: when i started 7 years ago, i just opened a small store, half this size, in jersey city. my rent was 500 bucks, and it was the last 500 bucks i had, so i designed 12 hats. lemonis: you opened a store with 12 hats? giordano: with 12 hats. that sold in less than a week, and so i took that money and made t-shirts, and then by the first month, not only did i have the rent, i had more money to dump back into the company. and... -lemonis: that was a good move. i will tell you something. i am genuinely impressed by the creativity in here, but it still has t have a point of view, and i feel like that point of view is close, but i see something that has mainstream possibility. i like raw talent, and i need to stress the word "raw."

what's the name from? -giordano: faded royalty. so, basically, if a king has two sons, youngest son is faded royalty. he's still royalty, but he doesn't have the pressure of being king. we're rebels in the fashion business. we do what we want. -lemonis: okay. giordano: what's going on, guys? how's it going? lemonis: you guys seem like pretty sharp dressers. man: we'd like to think so. lemonis: i mean, would you wear something like that? man: i mean, me, personally, probably not. lemonis: would you wear something like that? man: nope. like, one of these short-sleeved button-ups. giordano: you want to try a button-down on? man: yeah, i'd like to try a button-down on. giordano: and now, there's an option here. did you like the fit? -man: oh, my god. it feels good. it doesn't even need darts. giordano: this is what we've been getting a lot of buzz, the cut and sew stuff. this sells really well. lemonis: it's a really nice shirt. i mean, it's got construction to it. man #2: if i'm looking for, like, a cool bomber jacket for friday night, yeah, sure. i'll come to a shop like this. lemonis: do you have the bomber jackets here? giordano: i feel like bomber jackets are on the tail end of the trend. for instance, now this is just a sample -- lemonis: okay, rocco. i'm just going to stop you. bomber jackets are not off-trend.

giordano: okay. lemonis: they are very on-trend, very on-trend. -giordano: okay. -lemonis: hey, man. you know that bomber jacket that you really, really want? yeah, that's way out of style. -giordano: thank you. -man #2: thank you. -giordano: see you soon. lemonis: now i definitely want to shop with you. do you run the store when he's not here? aeneas: i only work part-time. lemonis: are there any full-time employees here? giordano: unfortunately, right now, no. i don't have money to pay people. i probably take a day off every 15 days. lemonis: you better sell some hats. giordano: this is my photographer, j.d. lemonis: how you doing, my man? i'm marcus. -j.d.: j.d. -lemonis: nice to meet you. and so, what do you do? you come in, and you take product, and you shoot it on the street? j.d.: uh-huh. i do that part and also, like, the web site. lemonis: so let's go -- i want to see how this process works. giordano: yeah, let's do it. let's do it. aeneas also does some modeling for us. ♪ lemonis: the shirt that he has on, what's the name of that shirt? -giordano: i don't have a name. lemonis: what's the name of that shirt? giordano: chic gas station. it's like mechanic chic.

lemonis: what was the name of this shirt? short-sleeve polo zip-on. giordano: i don't have all the names of everything. lemonis: you don't have any names. i don't think that rocco knows who his customer is. it's probably anybody that walks in that he can sell something to. lemonis: so why -- in a nutshell, why did you call me? giordano: the company has a lot of potential, but it's not doing well. it's not all about money. it's about contacts. it's about that i'm entering my 40s without a paycheck, even though i'm doing what i love. if i didn't borrow money from my friends and fight to stay alive, i'd be out of business. lemonis: i sympathize with the fact that rocco wants to get to a point in his life where he has steady income coming. he has good ideas, but he's got to be able to implement them in a way where they can turn into revenue, and that revenue turns into profit, and that profit turns into a paycheck. giordano: my whole thing is, design a shop that grabs people, and then once they're in, they're your customer. hey, joe. -joe: what's up, brother? giordano: what's up, my man? -lemonis: joe, i'm marcus. -joe: pleasure to meet you. lemonis: nice to meet you, sir.

giordano: other than joe, i don't have any other investors. lemonis: i feel like the odd man out without a beard here. giordano: is that a beard? is that considered a beard? lemonis: why you dissing him already? he's your partner. joseph, what do you do for a living? joe: i'm a partner in a manufacturing business. we worked on these bags for him. -lemonis: oh, you designed this? -joe: well, he designed it. giordano: we worked on it together. lemonis: who paid for the build-out here? joe: i did. lemonis: and who paid for the inventory in here? joe: i did. lemonis: so you've funded, really, the whole business up till now? -joe: basically. lemonis: and how much do you have invested? joe: close to 50. -lemonis: really? -joe: yeah. lemonis: and how much equity does joe have? -giordano: 25%. -joe: yeah. lemonis: typical day, how much do you sell here? giordano: three hundred a day maybe. lemonis: three hundred a day? giordano: we break even after that. lemonis: and how do you buy inventory if you have no cash left? giordano: joe was able to open our first credit card. -lemonis: how much is that? -giordano: fifteen thousand. lemonis: and how much do you owe on it? giordano: eight thousand. lemonis: so you bought your inventory on a credit card? giordano: yes. no interest. joe: i don't think he thinks things through. i think he just buys stuff and doesn't, you know, budget himself accordingly.

-lemonis: but super talented? -joe: yes. -giordano: can't have it all. -joe: he's an artist. couldn't let him just close up shop and quit. after all the time and all the effort and all the money he put into it, you know, i just believed in him, and he's a friend. lemonis: joseph, thank you, buddy. -joe: thank you. -lemonis: i appreciate it. -joe: it was a pleasure. -lemonis: nice meeting you. -giordano: joe. thank you. -joe: i'll see you. lemonis: how many years have you been in business? giordano: october is going to be 7 years. lemonis: and you've been full-time in this business since the beginning? -giordano: full-time. lemonis: how do you pay your bills? giordano: i'm very lucky. my girlfriend, which i plan on marrying, she's my everything. lemonis: how long have you guys been together? giordano: four years, and she's been with me, and she's been supportive since day one. lemonis: she's supporting you. giordano: she's supporting me, and there's going to be a time where i'm going to hold most of the weight or all the weight. lemonis: this is now the second person that i know about that's funding this vision that he has. i don't think it's the greatest business plan. he's got no clear path to success at this point, and everybody else is paying his bill. where's all your inventory, like, back stock of items? giordano: we, actually, joe has a house where he has a 2-bedroom garage, and i'm storing everything there.

lemonis: how much is there? giordano: on the retail side, maybe $100,000. -lemonis: $100,000? -giordano: in retail, yeah. lemonis: by cost, how much is it? giordano: i would say maybe $40,000. lemonis: $40,000 of inventory? giordano: yeah. lemonis: it's a little odd to me that he's borrowing this money from his friend and his girlfriend to support this business, and there's $40,000 of inventory sitting in a storage facility. like, why don't you just sell off the inventory? something just isn't adding up to me. rocco. -giordano: no, no, no. we release things. -lemonis: rocco, rocco, stop. -giordano: all right. -lemonis: okay? do you remember when joe said you don't really have a plan? giordano: yeah, this could fall under that category. lemonis: no, it doesn't -- it couldn't, it does. giordano: it's what i can do with the money i have. lemonis: the money thing just doesn't work for me because there's $40,000 sitting in a warehouse. where's the plan to turn it into cash? there's not even a sale sign in the window. like, why isn't this whole place on sale? giordano: well, it's not on sale 'cause some of the products -- you know, most of the products are new. lemonis: so how old is this merchandise?

giordano: those tank tops are from last season. lemonis: are you in love with them? -giordano: no. -lemonis: well, why are they not on sale? -giordano: there's no sale sign. there's no sale rack because there's no room. lemonis: i think you're in love with your merchandise. -giordano: [ chuckles ] -lemonis: i do. tell me that you need money, and all the money that you need to live your life and take a day off... -giordano: is locked up. -lemonis: ...is locked up. rocco, i need you to be, like, brutally honest with me. giordano: i just feel... lemonis: how close is this store to closing? giordano: we could close in a month. lemonis: what financials do you have on your computer? giordano: i know most of it by heart. lemonis: i can't go on your heart. i got to go on something on paper. giordano: yeah, no, i understand that. lemonis: am i the only person that thinks it's crazy that people don't have their financials ready when i get there? thank you for coming, and i'm going to ask you to invest hundreds of thousands of dollars into my business with no information. oh, well, great. where do i sign? i want you to get a piece of paper. i want you to write down your revenue, your gross margin, and your profit for the last 2 years. giordano: sure. let me do it.

lemonis: okay. so you realize that this is a tax return, not a financial statement? -giordano: sure. lemonis: do you know the difference? giordano: i know there is a difference. lemonis: have you ever done a financial statement? -giordano: not a real one. -lemonis: how come? giordano: i'd like to think it's in my head, which isn't a good excuse. this is what i owe my friends. lemonis: so you owe your friends $19,700. -giordano: yes. -lemonis: what are these? giordano: these are the business. lemonis: so that's $36,500 in loans and payables. giordano: yes. lemonis: and $19,700 to friends and family for a total debt of $56,200. how much inventory do you have? between some garage and in the store? giordano: actual cost, let's say $5,500 or $5,700. -lemonis: hundred or thousand? -giordano: oh, $57,000. lemonis: did you just make that [bleep] up? -giordano: no, i had it here. -lemonis: okay. so $57,000 of inventory at cost and $56,000 of debt. -giordano: yeah. -lemonis: okay.

$167,000 of sales, $68,000 gross profit. so what are your monthly expenses? giordano: $2,800 for rent. it's about $1,700 a month for employees. say another $250 to web services like shopify and all that other stuff. lemonis: business has around $57,000 in operating expenses for the year, $68,000 gross profit. if you're left with $11,000 a year, and you have $56,000 of debt... giordano: how do you pay that back? lemonis: how do you pay it back? giordano: how do you pay that back? lemonis: and how do you buy new inventory? and understand the fact that your friend has funded your business and the fact that your girlfriend is funding your lifestyle... giordano: yes. i'm willing to change it, get the business healthy, and grow the business where it should be. lemonis: what if you go through the sidewalk sale process... giordano: i don't know -- look, i've never had a sidewalk sale, so i don't know if that's the right way. lemonis: i want to prove to you that you can do it on your own. you are capable. anybody that has the guts to start a brand and put their ass on the line

has all the guts that i like to partner with. giordano: great. lemonis: i want to make an offer. giordano: i'm going to fall off this chair. -lemonis: why? -giordano: it's nervous, this. i am, you know, i'm a little nervous. lemonis: if your business is in trouble, and you need my help, log onto the theprofitcasting.com. lemonis: i want to make an offer. (danny) after a long day of hard work... ...you have to do more work? every day you're nearly fried to a crisp, professionally!

can someone turn on the ac?! no? oh right... ...'cause there isn't any. here- (vo) automatically sort your expenses and save over 40 hours a month. without you, we wouldn't have electricity. our hobby would be going to bed early. (vo) you earned it, we're here to make sure you get it. (danny) it's time to get yours! (vo) quickbooks. backing you.

giordano: i'm going to fall off this chair. -lemonis: why? -giordano: it's nervous, this.

i am, you know, i'm a little nervous. lemonis: my offer is $150,000. the way the equity is going to work, i'll have 50, you'll have 40, joe will have 10, and i want to give joe $15,000 back of his investment. giordano: i just -- i don't know how i would feel with him coming in, helping me out, an saying, "hey, now you're getting less than the deal." i would go 25, joe is still 25, and you 50. lemonis: i feel like you have to have enough of a vested interest that it's meaningful to you, too. 25% is not enough, in my mind, for you to have, because i also gave him 15 grand back. i want to pay off all of the debt, all of the payables. i want to put $30,000 into developing a new collection. i want $30,000 of cash in the bank. i want to put $4,000 into a web site, and i want to put $10,000 into marketing. giordano: okay.

lemonis: what do pay yourself today? giordano: i pay myself lunch. lemonis: that's it? no wage? giordano: no wage, no. lemonis: i'm going to advance you $20,000 so you can get back on your feet. -giordano: that's amazing. -lemonis: i'm investing in you. joe, he's going from 25 to 10, but he's also getting 15 grand back. giordano: okay. lemonis: and now he owns 10% of a business that has no debt and a ton of cash. the inventory must be liquidated, and you have to think about clarifying what your product offering is. -giordano: sure. -lemonis: we have a deal? giordano: yes. deal. lemonis: you better get to work. ♪ i'm headed to rocco's cut and sew factory in new jersey to see where he makes a few of his products. is rocco here? -giordano: hey, marcus. lemonis: i'm liking this place.

giordano: this is a great place. lemonis: this is like a work studio. giordano: this is everything. this is good here. lemonis: and so this whole area is used to draw the patterns and cut the patterns? giordano: yes. lemonis: you can store bolts of fabric here. and where do the finished goods going when they're done? giordano: there's racks back there where you can go. lemonis: so this factory really has everything you need? -giordano: everything you need. -lemonis: how you doing? -i'm marcus. -bieder: zeev, how you doing? -lemonis: zeev, how are you? -bieder: i'm wonderful. lemonis: did you bring any of your pieces with you today? giordano: yeah, i have pieces over here. lemonis: in order for rocco to move the brand forward, he has to clearly define what it stands for, who he's making it for, and the way to do that is to simplify the offering. nothing feels cohesive at all. there's no story. giordano: i have a story. it's just -- lemonis: tell me what the story is. giordano: faded royalty is good quality product at affordable pricing. -lemonis: that's not a story. -giordano: okay. lemonis: that's a brand promise. giordano: can i show you the pieces? lemonis: no, i need to understand your thought process from inspiration to final product. -giordano: sure. lemonis: and i need to understand how those pieces

all tie together for one brand. is there something that inspires you? giordano: the time. i feel like, for me, its the '60s and '70s. lemonis: great. that's the genre. giordano: yep. lemonis: okay. now, take me to the next point. giordano: while the adding the edge of stuff from today. lemonis: and how are you adding the edge? giordano: the different modern cuts. not -- you know. -lemonis: keep going. giordano: so... lemonis: i'm going to give you an example. giordano: okay. lemonis: i believe that what you described is accomplished in this piece. giordano: okay. lemonis: i believe it's accomplished in the style because it's an old-school five-and-dime shirt. so, like, what prompted this from a design standpoint? where is the inspiration? -giordano: i had a grandfather. this would have been out of his collection. lemonis: so this, to me, so far, is the only piece that has met the description that you gave me. giordano: okay. lemonis: show me something else on the board. giordano: i also really like this. these are trail runners. -lemonis: let me have this. describe to me, again, what you told me the brand stands for while you're looking at this.

giordano: late '70s, early '80s track jacket. lemonis: i thought this was '60s or '70s, the brand. giordano: it's not necessarily '60s and '70s per se. lemonis: okay. we're going to stop. what i worry about with rocco when he struggles to explain himself isn't his creativity or his character or his integrity. it's his ability to organize and collect his thoughts. what i want to see you do is, on paper, before we go any further... -giordano: okay. lemonis: ...i need you to pick one thing that you're going to have a vision about that says to the consumer, "this is my classic piece. this is what i'm building the brand on. this is the audience that i want to serve. and i'm going to literally make my investment on this piece." giordano: got it. lemonis: "vintage," define that for me. giordano: old style. lemonis: give me more than that. give me descriptive words. old what, like old clothes?

giordano: not the feel but the way... -lemonis: retro patterns? -giordano: retro patterns. lemonis: write retro patterns. giordano: this is what gets me the most is the old retro prints, the colors. lemonis: is that a retro print on you? giordano: it's a retro print, but the colors pop. lemonis: so you want vibrant colors? giordano: vivid. lemonis: because right here, you wrote "muted colors." muted colors or vivid colors, which one? giordano: so let's take this out. lemonis: you got to pick a lane. you can't be all over the place. check off on there what this is. giordano: old cut, retro print, you wear that, and it looks like my grandfather's shirt. lemonis: this is your anchor piece? -giordano: yes. -lemonis: now, i want you to throw everything in the garbage except this shirt and start over. you are going to show me what you would do to this shirt to have it hang on a rack or in a wholesale showroom that would make somebody want to buy it. my goal is to have rocco identify one item that he can build his whole collection around. his grandfather shirt is the most successful garment he has in his entire collection and a really solid building block. each newly designed t-shirt, hoodie, hat, or accessory

needs to tie back to that original piece, not only with style but with color palette so the entire line can be viewed as a cohesive collection. task is clear, right? -giordano: task is clear. lemonis: okay. see you later. giordano: see you. ♪ lemonis: what are you doing, my man? giordano: how's it going? lemonis: rocco told me there was $40,000 of inventory sitting in joe's garage. i want to see what's here. giordano: it's, um... it's a shock. it's a shock. ♪ -lemonis: rocco. -giordano: i know. lemonis: i got to be honest with you, man. you need to take a step back. -giordano: this is scary. -lemonis: no, no, no. that's an understatement. what is this? giordano: this is what's been holding me back.

lemonis: this is what's holding you back... or you'rwhat's holding you back? giordano: well, sure. lemonis: i mean, most of this, honestly, feels like junk. giordano: it still sells. lemonis: why isn't it on the web site? giordano: i only have a couple of pieces of each. -lemonis: what are these hats? -giordano: these are the hats i showed you. these were in the shop. lemonis: what is all this fabric? giordano: for hats. that was going to be a button-down. thanks. this failed, a corduroy bucket hat. that failed. -lemonis: what is all this? giordano: this is the perfect -- lemonis: let me have it. giordano: all right. lemonis: this is my faded royalty look. -giordano: it's not a bad look. -lemonis: this is what i just invested how much in? -giordano: $150,000. lemonis: this is what i invested $150,000 in? giordano: no, you invested $150,000 in... lemonis: in what? in your system? -giordano: not my system. -lemonis: in your process? how could you convince me this is not a bad idea? -giordano: this is a bad idea. -lemonis: how could you can -- giordano: but investing in me and the company isn't a bad idea. lemonis: the company is in this garage.

if there's $10,000 of inventory here, i'd be surprised. giordano: no, there's $40,000 in inventory here. lemonis: no way. rocco, i don't know if can do this, man. i really don't. hoodies, faded royalty for $5. you can get mad, and you can pout. -giordano: i'm not getting mad. -lemonis: at the end of the day, you're going to learn how to do it the right way.

lemonis: if there's 10,000 of inventory here, i would be surprised. -giordano: no, there's $40,000 of inventory here. -lemonis: no way. rocco, i don't know if i could do this, man. giordano: this doesn't sum me up. even though it might look like that, but the inventory is here. the money is here. it has to be sold. i'll do what it takes. if we have to do a sidewalk sale, and we have to generate income, i'll do that. i want the company to grow. lemonis: here's what you got to do. everything here that's sellable, you need to get to the store. lemonis: because we need people to know that we're having a sale. giordano: it's going to be a sale. lemonis: this garage has to get emptied. then, once we sell that, we're going to come back here and check it again. -giordano: yes. -lemonis: okay. giordano: deal. lemonis: i'm keeping your clothes.

i want to see you take this button-down shirt and we're going to find new fabrics, and we're going to build the anchor product. giordano: got it. lemonis: now that we've established that the grandfather shirt is the anchor to the entire collection, i'm taking rocco to a fabric store because i want to have him start the process of designing some new pieces. giordano: i think regular camo is a little played out right now, but stuff like this, the bamboo stuff. lemonis: okay. it's really about seeing if you're picking things that line up with what you put on paper. -giordano: got it. lemonis: i want you to read those words out to me, and i want you to start with, "faded royalty is a brand that has..." giordano: faded royalty that is a brand that is a lifestyle brand that's faded, edge, modern fit, vibrant, bold, fashion-forward, grandfather conservative. lemonis: vibrant, bold, grandfather conservative. those conflict with each other? -giordano: it's a fusion. so grandfather conservative and bold is -- lemonis: that's such a [bleep] word because "fusion," to me, is a way to say, "i'm going to do whatever i want because i always explain."

fashion is a very finicky environment because you have to be able to explain to the consumer and the company that's going to buy your product exactly what your message is and what you're trying to address, and rocco is scattered and all over the place. what i need him to do is pick a path and tell a story. you will not successfully sell if you cannot communicate. you have to be able to explain it... giordano: i'm going to have to do all that. lemonis: ...so that a buyer doesn't have to do the thinking. when you described this shirt to me is a grandpa shirt... giordano: mm-hmm. lemonis: ...it would explain to people, "this cut"... giordano: "has this fit." lemonis: ..."has this inspiration." rocco, write this stuff down. four attributes. number one, the cut. -giordano: cut. lemonis: we're calling it a grandfather cut. number two... -giordano: embellishments. lemonis: okay. so what would be the next thing? giordano: the feel. lemonis: the quality of the fabric. giordano: and the fourth one, the actual print. lemonis: the actual print. you're describing for the consumer or the buyer the actual cut. it's a grandfather cut, okay? embellishments... -giordano: bold. -lemonis: bold.

how are you describing the print? giordano: retro. lemonis: he finally lands on two words that he believes are the cornerstone of his brand, "retro" and "bold." why did it take us 3 days to get to that? giordano: you know, i never had someone say, "hey, why this? why that?" lemonis: we're going to see if this works. -giordano: yep. -lemonis: okay? what about something like this? -giordano: yeah. i think you could do something to that. i could do polka dots, different variations. good. lemonis: yes or no? is this edgy? -giordano: we can make it edgy. -lemonis: yes or no? giordano: i mean, on the shirt, yes. lemonis: great. do you understand? giordano: i do. lemonis: you have to pick a lane. so i want you to go back, and i want you to make 12 shirts using six different fabrics, so each shirt has two variations of it. i want to see things with thread, stitching, buttons. change it up, but don't change what the brand stands for. okay? -giordano: okay. got it. ♪ [ whistling ] lemonis: i'm meeting rocco back at the store

to ensure that he's moved everything out of joe's garage, and he started liquidating things on the sidewalk. instead of seeing a sidewalk sale, which is what tasked him to do, i see rocco standing out front pouting like a little baby, and a store full of boxes that don't even look like they're open. i thought you would have been, like, out there with the table. -giordano: well... lemonis: were you waiting for me? giordano: i wasn't waiting for you because, you know, i don't know the full execution of all this. lemonis: i think rocco is so focused on the vanity of his brand that he doesn't want anybody knowing that he made some mistakes. faded royalty hoodies! faded royalty designed by rocco! man: i'll buy one. lemonis: five dollars. what size are you? -man: extra large. -lemonis: it's hard. it's a little hot out today but... five is good. -man 3: five is good? lemonis: thank you, my man. you can get mad, and you can pout. at the end of the day... -giordano: i'm not getting mad. lemonis: ...you're gonna learn how to do it the right way.

hoodies, faded royalty for $5. giordano: just 'cause it was in a garage doesn't mean that there needs to be a fire sale. lemonis: why not? giordano: because a lot of this stuff is still new stuff, and putting your foot down and saying "this has to get done," that's wrong. i'll give it to charity before i sell it in this fashion. it's something i can't do, where i just put it on the sidewalk and sell it cheap. that's how i feel about it. lemonis: how many hats are here? giordano: close to 5,000 hats. lemonis: and so how much is that? giordano: $30,000. lemonis: you understand how this flies in the face of everything we've been talking about?

giordano: it doesn't make sense to do a sidewalk sale in this fashion. it's something i can't do where i just put it on the sidewalk and sell it cheap. it's the integrity. i don't want to sell it in this fashion. lemonis: what do you mean "this fashion"? giordano: throwing it out on the sidewalk. -kristina: how's it going? -giordano: stressful. kristina: what do you need help with? -giordano: no, you don't -- -kristina: i want to help you. -lemonis: how are you? -kristina: i'm good. how are you? -lemonis: i'm marcus. kristina: kristina. nice to meet you. -giordano: my better half. -lemonis: okay, awesome. kristina: so we're having a sidewalk sale? lemonis: have you asked him to do this before? giordano: how long have you been wanting me to clear out that garage and stop the hoarding? kristina: forever. but this is good. i'm glad this is out here. giordano: if she's happy, then i'm happy. kristina: i think this is the right step. giordano: i get what you're saying. i need to move it, and i will move it now that it's here because it's not going back in the garage.

five dollars! five dollars. try that on. twenty bucks. i got this in large. lemonis: five dollars. this one? giordano: five dollars! five dollar hats! you both need tank tops, five bucks. five dollar hats. this guy right here needs a hat. one time only sample sale! lemonis: how is it shaking? want to get a little count? giordano: yeah. lemonis: so i have 1,100 in this pile, 1,200, 1,300, 1,400... giordano: three hundred. lemonis: so we're at 1,775 right now. giordano: that's what i did in a week. lemonis: okay. and that was in 2 hours. okay. we're moving stuff. five-dollar sweatshirts! five-dollar t-shirts. all designed by rocco. giordano: five dollars, you get a hat. lemonis: five bucks, my man. ♪ after i gave rocco some direction, and i gave him some time to design some of his shirts, i asked him to come out to la... what's happening? giordano: good, man. nice space. lemonis: ...and present to me where he was going with the line. giordano: so the one on the left is our standard fit, but what i changed... i like this detail with the pocket flap,

which is different from the original. lemonis: and so your current shirt does not... -giordano: does not have this. -lemonis: okay. giordano: so this is the current shirt but with this. lemonis: all right. let's see what else. okay, so the 12 shirts that you -- this is not... not a fabric that we picked. -giordano: no, no, no. there was actually enough to make 13, so i experimented with one. so if we wanted to do a collection that ties all in together -- lemonis: now, i just have to tell you this. this wasn't as much of a fashion exercise as it was a don't-do-more-than-you're -supposed-to exercise. giordano: okay. lemonis: because one of the things that you and i have had as a small issue is you are all over the place. -giordano: okay. -lemonis: right? and so we're working to get it honed in. giordano: honed in. lemonis: so that we don't end up with a garage full of stuff that, like, "oh, i had this, and so i made it." this is an example of what got you in trouble. giordano: okay. lemonis: because you didn't do the task. here's what's frustrating for me. i think this came out great. i think this came out great. you changed the color. you changed the buttons. you changed the side pin. so i know what talent you have.

the fact that he did not follow instructions really watered down the creativeness. i couldn't even focus on the fact he had some good ideas because i was still so annoyed by the fact that he didn't just do exactly what i asked him to do. we got to pick a lane and you got to literally get committed to something that's cohesive. so i'm comfortable with you continuing to develop the shirts. i want more changes to them. -giordano: got it. lemonis: so i want you to create 12 shirts using six fabrics. we're going to try this again. -giordano: okay. lemonis: i want you to make six styles of hat. i want you to make t-shirts and sweatshirts, but they have to connect to what you did. i'm looking to see an entire collection that's cohesive. and then, once we finish making that, i'm going to take you to a retailer, and we're going to see if they actually want to buy it. -giordano: okay. -lemonis: is that garage empty? giordano: yes. lemonis: there's nothing in that that's yours? -giordano: yes, yes. -lemonis: all right. good job. -giordano: thank you, buddy. ♪

-lemonis: rocco. -giordano: got it. thank you. lemonis: i'm taking rocco to one of my storage spaces in new york city, and it's vital that he proves to me that he can actually organize the merchandise and treat it with respect. i want everything that does not sell at the sidewalk sale to be brought here and hung here. get it inventoried. get it put on a spreadsheet and establish the dollar amount. giordano: got it. lemonis: historically, rocco used to dye his garments one at a time in a bucket at his house, and in order for the volume to really grow here, he's not going to be able to do that, so i'm going to take him to a dye factory in new jersey. binson: if you want to do different novelty pieces for, let's say, 50 shirts or 20 shirts -- -lemonis: or 1,000. -binson: or 1,000. giordano: yeah. lemonis: if this brand is going to explode like i think it can, i want him to have more resources at his disposal so he can try new things. that looks good for a t-shirt. we want to do all of our stuff, our dyeing here. thank you, guys. thank you. man: no problem. lemonis: one of the things that rocco really loves to do

is use prints on different fabrics. how are you? -zimmerino: hi, marcus? lemonis: i'm marcus. zimmerino: jeanette zimmerino. nice to meet you. lemonis: jeanette, nice to meet you. and so i arranged for him to work at a digital printer so he knows any idea that he has can be printed. giordano: right now, we want to center our collection so he knows any idea around this style of shirt, and, for us, if we can nail this material, i think that'd be great for us. lemonis: after giving rocco time to organize his inventory, i'm heading back to the storage space because i wanted to see if he's actually followed my process. giordano: so everything that was in the garage is down here. lemonis: there's a lot of jackets here, man. giordano: there's 96 jackets here. lemonis: how many hats are here? giordano: close to 5,000 hats. however... yes, yes. a lot of these hats -- so, how we got to this point... lemonis: so 5,000 hats at an average cost of what? giordano: six and a half dollars. lemonis: and so how much is that? 5,000 hats... giordano: it's about $30,000. lemonis: well, how much is it exactly? giordano: five thousand times 6.50. it's $32,500.

lemonis: the fact that there's 5,000 hats here is a big deal. he's supposed to be selling inventory not hoarding it. and furthermore, he should know how much inventory he has there. i don't know how long i can tolerate this. lemonis: you understand how this flies in the face of everything we've been talking about? okay, show time. giordano: so, this piece might not be for everyone. it's very fashion-forward. svendsen: it would be a pretty hard sell to bring that in.

lemonis: you understand how this flies in the face of everything we've been talking about? giordano: i understand that. liquidate all of the hats. wasn't that our deal? -giordano: that's our deal. lemonis: that's got to happen. giordano: so i got to move this inventory. lemonis: focus, man. you got to focus. ♪ what's up, bearded men? -giordano: how are you, buddy? -lemonis: how you doing, my man? -joe: pleasure. how are you? lemonis: it's been a couple weeks, and rocco has done a decent job in starting to sell some of the inventory down, but there's one thing that i really want to know. so i've asked rocco to meet me at joe's garage. i'm anxious to see what's inside. joe: good. lemonis: there's no inventory here. -joe: no, absolutely not. -lemonis: okay. when are you getting married? -giordano: very soon. -lemonis: did you get a ring? -giordano: working on it. lemonis: why don't you sell some of that [bleep] in the basement and buy a ring? giordano: yeah. she deserves it.

lemonis: yeah. giordano: we're going to have the first profit wedding. lemonis: it's going to be a nonprofit wedding. you're not making any money on it. okay, buddy. -giordano: see you, buddy. lemonis: i'll see you back there. see you, brother. -joe: thank you. -lemonis: thank you. i'm meeting rocco at the cut-and-sew facility because i want to check on his progress and see if hes actually focused on the assignment. what's the good word? how you doing, brother? -bieder: i'm doing great. -lemonis: you're doing good? -bieder: yes. -lemonis: good. and i have to be honest, if he doesn't have this right, i'm sort of running out of patience. that's cool. giordano: i think no one is really doing this. lemonis: so the idea is to have, like, a little hoodie baked in there. giordano: it's more fashionable now. i like it this pattern because it makes sense. lemonis: i kind of dig it. giordano: and then another option is without the hood and add a sleeve to it underneath. -lemonis: i like it. -giordano: yeah. so this is the collection. one thing that's not ready yet is in a hat. all this fabric... -lemonis: all digitally printed. giordano: that's something i created. it's a camouflage. it's a light camo, and then i take the same material, put it on the hat to tie it all back together. lemonis: that's badass right there.

giordano: thank you. lemonis: i'm really liking what i'm seeing rocco put together, and i always knew he was talented, but now that he's tied all the products together, i know that it'll make sense to buyers. they'll be able to understand the story and the look that he's going for. giordano: twelve cut-and-sew, to six hats, the six hoodies, and the six t-shirts to put it all together. lemonis: there you go. i think the work that you did was amazing. i want you to write a one-sheet narrative on who the customer is. i want you to create a person in your mind. giordano: okay. lemonis: so, when you go pitch to a national company, they're going to need something that brings people in. they're going to need something that makes your collection something they have to have. you need to tell them whey they have to believe in you. giordano: i can definitely do that. lemonis: see you soon. today, i'm taking rocco to minneapolis to visit my business, the house. i'veger him to put a whole collection together and to pitch it to their buyers.

this is for the blue one? -giordano: this is for the blue. lemonis: the house is a catalog and web site business that specializes in skate, streetwear, board wear, things that are exactly who rocco's audience is. giordano: these all go together. this whole collection goes together. lemonis: and while i may own the business, i don't influence their purchases. want to put them in order? -giordano: put them in order. lemonis: when you take them through the collection, stay focused. deal? -giordano: deal. lemonis: rocco is completely on his own here. if they like the product, they'll sell it. if they don't, they won't. okay, show time. -giordano: hello. -currier: hello. giordano: i'm rocco, creative director and owner of faded royalty. currier: hi, i'm chris. giordano: chris, nice to meet you. behind me is a mixture of '60s mod english, like that vintage, the who feel with new york edge. my demographic is 16 to 30, a lot like yours, mid-30s. he's someone that's social. he's someone that's out there, but he wants to stand alone. he doesn't want to have the same clothes everyone else is wearing. he wants to be a little different

without being a distraction. right now is the best time to bring those two worlds together. the quality is amazing, and for the most part, this averages at 55% margins, which is pretty good. lemonis: you see how they are like, "yeah, buddy." we like margins. -giordano: money is good. so let's so start with this, our mandarin collar. here, take a feel. the retail on this is $70, wholesale $35. now, the margin is 50%. however, this shirt is made in america. here's something where we changed the yoke on it. the buttons are clear. the yoke is different. it's like a throwback to a bowling shirt. currier: yeah, this print is really great, yeah. -lemonis: you like the print? -svendsen: yeah, i like it. giordano: embellished with our star logo. -rohlfing: simple. -giordano: simple. rohlfing: i feel, like, the quality of it, too, you just feel like you can bang around in it and not worry about worry about it, right? giordano: exactly. it's a really great shirt. currier: i think the made-in- america, too, adds value to it. people like to support that. svendsen: i mean, that's pretty easy. currier: call that out clearly, and you can sell that. svendsen: that's definitely something to call out. giordano: now, this piece might not be for everyone.

it's very fashion-forward. try this on. -currier: here you go, buddy. you look like you want to wear this. lemonis: who asked for a robe? giordano: it's got a two-way heavy zipper on it to make it more masculine. lemonis: wasn't me. giordano: you got the hat if you wear a hat, but i think that looks good. lemonis: and honestly, it was ugly, really ugly. rohlfing: this is tough for me, just personal preference. but i think your fashion-forward kid would be into it, but it's a very niche market for that. giordano: it is a niche market. svendsen: it would be a pretty hard sell to bring that in. breitenfeldt: it's all too fashion-forward for us. definitely. lemonis: for exclusives, extras, and business advice, visit theprofit.cnbc.com.

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would be into it, but it's a very niche market for that. giordano: it is a niche market. svendsen: it would be a pretty hard sell to bring that in. breitenfeldt: it's all too fashion-forward for us. rohlfing: and i mean, it's an interesting piece for -- giordano: it's not for everyone and -- lemonis: and it wasn't part of the assignment. giordano: well, it was the hoodies. lemonis: well, that's not a hoodie... just because it has a cape on it. there's no question that rocco's creative, so he gets an a for creativity, but he gets an f for showing up to one of my businesses with a robe. i mean, honestly, dude, i don't know where the robe came from but no robe. giordano: so here's the experimental. this is a great t-shirt. -lemonis: sublimation. -giordano: the sublimation. and they actually make the material, which is pretty unique. feel that. rohlfing: is that your logo thrown in there? giordano: my logo is thrown in there. lemonis: so can you guys do me a favor? if you could go through the racks, left rack is something that you would buy that's a style or you like the concept.

right side would be something that, even if you changed the color, even if you -- it's just not going to work. svendsen: yeah, we can keep that. yeah. and i think that's something interesting. i think you could work with it. -giordano: all right. those are pretty good odds. lemonis: are you surprised? breitenfeldt: yeah, i was actually going to say it was pretty scattered online but now, knowing, like, the color stories and everything kind of fits together. the cohesiveness now, it makes a lot more sense. lemonis: assuming that the pricing and the margins are clear, assuming that you're able to only buy the ones that you want, do you think this is something that could sell to your customers? -breitenfeldt: yep, definitely. -lemonis: okay. giordano: i put my heart and soul into this. i'm glad you guys liked it, and i look forward to working with you guys and doing a lot of business with you and making some money. you know, money is good. lemonis: thank you very much. breitenfeldt: yes, yes. thank you. lemonis: i think that rocco is always going to push the edges of creativity, but through this process, he was able to get rid of his inventory and really put together a cohesive line. it's now clear to me that his brand stands for something. i feel like he's come a long way.

do i ever want him to suppress his creativity? no. do i want him to make robes? definitely not. i thought your presentation today, compared to the first day i met you in your store... giordano: oh, it's night and day. lemonis: if i was grading the presentation, i would give it a nine out of 10. this on clinton street is going to do very well, and it will do very well online. it will do well in chris' store. it'll do well in all of their businesses. what did you learn through this process? giordano: what i learned is stay focused, and i think what came out of it is just a stepping stone. i think what's to come is going to be even better. lemonis: quick question, by the way. did you get engaged? -giordano: soon, soon. lemonis: what's "soon" mean? giordano: i got how it's going to be done really set down. lemonis: so you get the ring yet? giordano: i didn't get the ring. lemonis: get your ring. get your [bleep] together. -giordano: thank you. -lemonis: i'm real proud of you. all right? -giordano: thank you. -lemonis: okay, buddy. -giordano: thank you. ♪

♪ welcome to "street signs." these are your headlines >> european markets falter on chinese growth concerns after gdp comes in at 6.6%, slowest official pace in 28 years amid the on going trade war with the u.s. economic error and a political mistake, sharp words from the french finance minister the