Wednesday, 5 October 2016

The Profit: Pacific Hospitality Teams Up with Grafton Furniture to Create Business, Design Dream Team

Pacific Hospitality

Pacific Hospitality


This week Marcus Lemonbis travels to Los Angeles to help furniture company Pacific Hospitality Design. The family business has been in business for nearly 40 years, however, paperthin margins and nonexistent processes threaten to put the company under. Lemonis brings in another business, Miami-based Grafton Furniture, to help advise Pacific Hospitality but rising tensions risk putting both companies in jeopardy, according to the episode description.


Visiting their office, Lemonis learns that they mainly focus on hospitality furniture, approximately 90 percent of their efforts. The rest is retail and residential. They are on track to make $2.8 million in sales this year but are unsure as to whether they’ll make a positive return from that. From there, Lemonis is struck by how little they know their numbers, down to how much their products cost.


Touring their manufacturing space, Lemonis says there’s high amounts of chaos. He says that there is “margin leakage” and questions the founder Gilbert and his daughter Ana as to the business’ inner workings. Her father’s health also makes it difficult to keep things running.


Given that it appears they will just break even this year, but given that the founder thinks with his heart and they have an incredible work ethic, Lemonis offers $300,000 for 40 percent equity, in additon to a partnership with Grafton Furniture, the first merger in the show’s history. He then ups it to 45 percent, giving a five percent share of Grafton to Pacific Hospitality Design.


Introducing Gilbert and Ana to the Grafton Furniture team, he updates them on the changes. He reiterates that he is 100 percent in charge, as always and gets down to business. They tour Pacific Hospitality’s manufacturing warehouse and Grafton says the flaws in their furniture are not okay for the residential side of business, a key aspect of the deal. Hospitality furniture would be produced in Grafton’s space, with the residential furniture being produced in Los Angeles.


They notice the problems in a nonexistent work process and glaring mistakes. Lemonis hopes to create dedicated stations to increase efficiency and minimize mistakes. There’s also too much leftover inventory, which Lemonis suggests throwing out. The furniture that hasn’t been touched in five months gets thrown in the garbage. They also clean the showroom, which causes Ana to get emotional given the sentimental value of the designs that she made being throw away. Her passion for design inspires Lemonis to draw up the plans for the redesign of the warehouse.


Once again visiting Grafton, Ana gets some inpsiration on warehouse design, including organized shipping and framing stations. She designs the plans in a week, and the warehouse will now include offices and more streamlined production stations.


Next, Lemonis proposes working with another company that he previosuly invested in, The Simple Greek, to work on their furniture. But tensions quickly boil over when Lemonis sugestions Ana focuses on designs rather than Grafton’s owner and designer Steve. Ana defends her aesthetics and commercial experience and they agree to each come up with their own designs, in a competition format. Back at the warehouse, they focus on continuing the redesign. It will include a paint booth, more efficient work environment and offices that present a better first impression.


After two weeks, they each present their design ideas. Ana wins over the vice president of The Simple Greek with her colorful, eye-catchy designs after Steve fails to present something unique. Given their presentations and evaluations of their strengths and weaknesses, Lemonis says he wants Ana to be in charge of design for Grafton and Pacific Hospitality from now on, which does not go over well with Steve, who would be in charge of business and managerial tasks. Steve is unwilling to let go, despite Lemonis telling him he is no longer in charge.


Steve says he thinks Lemonis is “dead wrong” and thinks Ana would have no idea how Grafton operates given that they live on opposite sides of the country. She says she’s a team player and thinks Steve may be a bit of a bully. He apologizes for coming across that way and encourages her to point it out in the future. They agree to put Ana in charge of design as head designer for all of Lemonis’ businesses, since he has always wanted someone with her skills.


Finally, they visit the new, beautifully-designed offices and warehouse. Both will increase margins and efficiency. Ana and Steve are also staying connected through virtual conferences, sharing designs and thoughts for the mutual benefit of the business as a whole. And one of the best parts? Gilbert finally got his vacation.


Social Media Reacts to Pacific Hospitality Design’s Appearance on “The Profit”


























What were your thoughts on this week’s episode of “The Profit”? Sound off in the comments section below!



Source: B2C
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