The Profit: Marcus Lemonis Invests in Polar Bear Coolers

Marcus Lemonis has an interest in the outdoors, camping and tailgating so when Polar Bear Coolers came to him with a potential investment opportunity, it felt like a natural fit for his product portfolio. With the high-end cooler industry booming, Marcus was eager to learn more about Polar Bear Coolers to understand how he could help the company and make his investment grow.

His first impression of the company was that the owner, Strud Nash, didn’t appear to take his company or his role in the company very seriously. When Marcus showed up, Strud and his fiance were having the equivalent of a garage jam session at the business. Upon meeting with Strud and the rest of the company, Marcus realized that there were some serious respect and appreciation issues between Strud and his employees.

Even more concerning than the company culture was the financial health of the company. The company has lost 30% of its business and over $1 million year-over-year. Strud takes responsibility of the downturn of the company citing that it has been caused by bad financial decisions on his part. He has taken too much money out of the business which crushed their product margins because they must buy product in smaller batches. This limits inventory, innovation, and marketing efforts.

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After touring the facility, Marcus is surprised by the state of their warehouse and inventory. They do not have a good understanding of which products are the best movers so they have money tied up in inventory that is not generating money for the company. Because they are financially constrained with this inventory, they can’t afford to purchase inventory of the products that they are actually selling. Their warehouse is very disorganized and there is not a clear picture or communication of goods moving in and out.

Marcus feels that the product is very good but there is room for improvement with their processes. The biggest change he wants to see is around Strud’s focus on his people. He is quick to criticize and slow to appreciate his employees. He has cut their pay and put them in financial turmoil causing his staff to lose their tolerance with the fluctuations of their business and market. Marcus works with Strud to learn how important it is to value and empower his employees. When employees feel valued, they work harder for the company and all ships will rise.

When's the last time you told someone how much you appreciate them? #TheProfit

— CNBC's The Profit (@TheProfitCNBC) November 27, 2019

Because Marcus questions Strud’s judgment on how he spends the company’s money, he decides to set up a line of credit rather than a straight equity investment. He will provide a $540,000 revolving line of credit to Polar Bear Coolers which allows them to borrow from it to stock inventory. After selling that inventory, the profits will be placed back into the loan which carries a 5% interest. After it is paid back, the loan goes away. In exchange for this line of credit, Marcus wants a 25% share of the company. Strud agrees.

In order to get Polar Bear Coolers back on track, Marcus has a plan to organize inventory, liquidate slow-moving products, create a clear digital direct-to-consumer marketing strategy, and help the employees to have a clear path for financial growth as the company grows and succeeds. To develop their digital marketing strategy, Marcus works with Strud and his team to develop a new website using an outside agency. He also has them clearly develop target markets so that they are intentional about the way in which they sell their product.

By refining the process, consolidating the product and modifying the way in which they care for their employees, Polar Bear Coolers has turned their business around and Marcus is impressed. He decided to write an additional check (outside of his loan) to help them with their inventory levels. With the new infrastructure in place, salaries going up, and a newfound respect, appreciation, and trust through the company, Marcus feels more comfortable that he will get his investment back.

What do you think about the transformation that took place at Polar Bear Coolers? If you were Marcus, would you have invested in Strud’s business? Which change do you feel was the most instrumental in their journey? Start the conversation in the comments below!

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