The Profit: Murchison-Hume Deal Turns into a Mess, Marcus Lemonis Walks Away

Murchison-Hume

This week, Marcus Lemonis pays a visit to Los Angeles in order to help Max Kater of Murchison-Hume get her business back on the right track. According to the episode description, Kater has put her business in jeopardy with “aristocratic marketing, high prices, and an unwillingness to face reality.” If she doesn’t change things, her entire business could be derailed.

Visiting their office, Lemonis is first confused by the office decor and questions the naming of the brand. They hope to make”everyday domestic tasks more glamorous.” Their product offerings include dish soap, all-purpose cleaners, bathroom cleaner and furniture cleaner. He also thinks their offerings need to be narrowed and better focused. Many of their non-toxic, eco-friendly cleaning products cost $9. He also believes their third party logistics shipping is hurting their business.

Next, he takes on their logo. He said it reminds him of things found in a castle and finds the icons pictured on the label, including stylish armchairs and silhouettes, “too fancy” and high-style. The logo also does not effectively convey what each product does.

After crunching the numbers and being offered some “afternoon tea,” he offers $250,000 for 50 percent equity. Kater counters $500,000 for 30 percent, causing Lemonis to counter $250,000 for 30 percent, while owning 75 percent of their “Best in Show” trademark, which gets countered at 30 percent. They agree to $250,000 for 30 percent equity with 30 percent ownership of their “Best in Show” trademark.

First, they visit The Container Store to scope out their shelf positioning. The store just recently moved their products to the top shelf, at the request of Murchison-Hume. Lemonis finds it “a little weird” that it was staged and tells Kater that it was wrong of the business to take that approach.

Next, Lemonis tackles the branding aspect. He suggests changing the logo by integrating aspects of the art director’s possible name change “The Clean Evolution.” Kater says she doesn’t like it, but everyone in the office disagrees. Lemonis says she needs to be more open to change, but she quickly shows she isn’t willing to do so. Kater takes off and Lemonis explains that her “vision needs refining,” however she accuses him of lying to her.

Attempting to refocus her and build up her confidence, Lemonis introduces Kater to Kathy Ireland to help with their branding efforts. She likes the idea of a “Clean Revolution” name, along with the tub icon, despite Kater trying to sneak a Murchison-Hume logo bottle into the running. She encourages Kater to “throw away her facade.”

Visiting a pet store, Kater tells Lemonis that she’s worried about his laser focus on the “Best in Show” trademark. She backtracks on the deal they made and says she feels as though they deserve more. She once again counters Lemonis at 15 percent of the initial investment and 15 percent when he “proves himself” and drives the price down. He says he’s offended that she feels as though he needs to prove himself to earn extra equity and he turns down her counter.

Further digging a hole, Kater shows Lemonis their mini distribution center, which Lemonis had originally rejected. He suggests moving forward and once again, shaking hands on their original deal. Given the value he adds, Kater and the co-owner once again accept.

Next, Lemonis discovers that there’s a discrepancy in the inventory number that Kater originally said they had. The $280,000 in inventory was one reason he had made a deal in the first place, however, the actual number turns out to be much lower.

With no apologies for not knowing her numbers regarding inventory, her “flippant attitude” and her unwillingness to be more open, Lemonis decides to walk away from the deal.

Twitter Weighs in on Murchison-Hume Mess

What is their target demo Downton Abbey? #TheProfit @TheProfitCNBC

— Arnulfo Valadez Jr. (@chachovaladez) September 28, 2016

The pain of holding on to your business even when its not practical #TheProfit #CNBC

— Ronica Brown Agency (@RonicaBrownCPA) September 28, 2016

Honey cleaning the toilet is neither glamorous nor a "treat" #TheProfit

— Evil Jensunami (@Jensunami) September 28, 2016

Keeping up with appearances is a dangerous game. #TheProfit

— Miss Trini (@TraceySolo) September 28, 2016

The product looks like deep conditioner. #TheProfit

— Tretta Bush (@TrettaBush) September 28, 2016

Not sure why we are trying to glamorize cleaning. Easier? More Efficient? Yes! More Glamorous? No. #TheProfit #CNBC

— Lane Slagle (@em_slagle) September 28, 2016

@marcuslemonis All I could picture… #TheProfit pic.twitter.com/25teL7OGub

— Sara Guerard (@SaraGuerard) September 28, 2016

Wow. She"s a little crazy. I think she"s a control freak. #TheProfit

— Jaye Cheríe (@jayecherie) September 28, 2016

Another one flies the coop! Running away from constructive critique and problem solving is NOT leadership #TheProfit

— Michelle Batten (@iMediaMichelle) September 28, 2016

Vision ALWAYS needs refining. Part of the business. #TheProfit

— Lynette Lovelace (@lynettelovelace) September 28, 2016

.@marcuslemonis made a handshake deal with you, and now you want to change the terms? Doesn’t work like that. #TheProfit pic.twitter.com/mqWaI5JlYu

— CNBC"s The Profit (@TheProfitCNBC) September 28, 2016

The arrogance and disrespect of some of these entrep"s never ceases to amaze me. @marcuslemonis has better things to do. #TheProfit

— ~Seira (@SeiraRulez) September 28, 2016

Max needs to come clean with everything. Misinformation is bad information. #TheProfit

— Theodore (@theodoreterry) September 28, 2016

Is it too late now to say "sorry" #TheProfit pic.twitter.com/8JvR6HDUIy

— Rothweiler Events (@RothweilerEvent) September 28, 2016

What are your thoughts on the way Kater runs Murchison-Hume? Did you think it was wrong of her to run off from meetings with Lemonis? Share your thoughts in the comments section below!

Source: B2C