RV Weekly

Something about Bob Lee’s complete separation from National R.V. Holdings last week raised my eyebrows, enticing me to delve into the situation. His sale of all remaining stock signaled the presence of bad blood between the struggling manufacturer and the man who founded a company which eventually merged with National R.V.  Or is it the red ink pouring from the California manufacturer that left Lee with a bad taste in his mouth?

Lee founded Country Camper in 1973, which later became Country Coach. In 1996, he sold the company to National R.V. for $9 million in stock and continued to serve as Country Coach CEO while also serving on the National R.V. board of directors. Last August, Lee announced his resignation from that board, citing a crisis that threatened the future of the company. The story is a sad ending to what was once one of the most profitable mergers in RV industry history. The story also calls attention to some questionable oversight at National R.V.

On Jan. 2, 1996 — the year Lee sold Country Coach — National R.V.’s stock was selling at $11.61 per share. By year’s end, the stock was up to $14.48. In the months that followed, the stock price soared to a high of $50.44, at which time the company offered a 3:2 stock split in July 1998. For the rest of the decade, the stock hovered in the mid-$20s, closing 1999 at $19.25 per share. It wouldn’t take a rocket scientist to see that the company had clearly turned the corner and was heading south.

The National R.V. board of directors responded by promoting Brad Albrechtsen to the position of CEO in September 2001 when stock prices opened at $12.26 and closed the month at $10. The firm enjoyed some success as stocks rose to a high of $14.10 in April of 2002. Since then, the company has been on the fast track to financial distress.

In November 2005, when stocks opened at $4.66 — just 9 percent of its all-time high — Lee sought to take over the company with the help of a Los Angeles investment banker. They proposed a buyout of $6.25 per share. But the board of directors refused the offer, opting instead to hold the course.

On Jan. 2 of this year, stocks opened at $3.67 per share. Yesterday, they closed at $4.46. In a few weeks, National R.V. will sell its manufacturing plant in Perris, Calif., for $31.75 million only to lease it back for the next 20 years. That’s a incredible expression of optimism if I’ve ever seen one.

You would expect the market to react negatively to a corporation’s stock when a sitting board member resigns in disgust — and it has. But, you would also expect the board of directors to heed the warning, sit up straight, set down the brie and crackers, wipe the Chateau Margaux from their lips and get to work investigating the claims before the stock could be sold on the penny market.

In 2006, the RV industry was stunned when manufacturing company Sunline suddenly shut its doors.  In that instance, the public, employees and dealers were unaware of the impending financial crisis.  That is not the case with National R.V. The firm has written its financial statements in red ink for nine straight quarters — and 17 of the past 21.  We may have found something that can offer a worse return on investment than Social Security.

I credit Bob Lee with having the guts to call a spade a spade. He set the example by resigning from a company apparently set on milking investors and the firm’s hard-working employees and dealers who also have a great deal of sweat equity, if not a financial stake, in the firm’s long-term success. But, it seems to me that several more resignations are in order.

I spent the weekend preparing tax forms — an annual exercise in frustration.  But, buried in this year’s tax forms is a credit called the Telephone Tax Refund in which taxpayers receive a credit on their federal excise tax on long-distance phone services billed between March 1, 2003 and July 31, 2006. This is the only year in which taxpayers can apply for this refund.

Taxpayers can either add up every line of excise tax from their phone bills or take a standard deduction. The standard deduction varies from $30 for a taxpayer with one exemption, $40 if you claim two exemptions, $50 for three and $60 for four or more.

Or you can gather up all your old phone bills and add up the amount of excise tax you were billed for long-distance services and deduct the full amount.

The refund appears on line 71 on form 1040 and works like a tax credit reducing the amount of tax due.

By the way, did you see Congress is proposing a plan to “simplify” the tax forms once again.  How’s this for a tax form?

Line 1 — Enter your gross income

Line 2 — Subtract $30,000

Line 3 — Multiply the balance by 15 percent

Line 4 — Write a check and mail it in

 Anyone think this would work to simplify our tax structure and put government on a budget?

Having just returned from the StagParkway dealer show in Las Vegas, it’s hard to understand how the company can continue raising the bar of excellence year after year, but they do.

As wholesale distributors, one would expect StagParkway to be concerned only with selling parts and accessories and quickly shipping them to dealers at the lowest prices possible. After all, that’s what most of their competitors strive to do. But, the staff at StagParkway takes distribution to a whole new level.

The company invests a considerable amount of time, effort, energy and money in offering first-class educational programming to help dealers become more profitable and more efficient in the long-term. To the best of my knowledge, NTP Distribution is the only other wholesale distributor to take an active interest in dealer education. Both NTP and StagParkway work hard to prepare dealers to compete today – and to take advantage of emerging trends so they can effectively compete tomorrow, too.

The educational sessions at this year’s Stag show helped parts and accessories managers see how product mix, promotions and merchandising could improve sales performance. Dealers learned how to compete against online retailers, big box stores and how to beef up their businesses in tough markets or during a slow economy. 

Any forward-thinking distributor knows that better managed RV dealerships are better able to move products for their supplier partners, which in the end helps the wholesaler make more money. Unfortunately, there’s a shortage of forward-thinking distributors. Yes, the purpose of a buying show is to take orders for supplier products, and dealers are expected to step up and make purchasing commitments.

But dealers and suppliers who participated in this year’s StagParkway event walked away with far more than good bargains. They left confident in knowing that StagParkway is a unique business partner truly concerned about their success.  And it’s clear that StagParkway considers dealers and suppliers to be their partners. It’s a symbiotic relationship in that by helping dealers and suppliers make more dollars, StagParkway earns more pennies from every transaction — and that’s the key to everyone’s long-term success.

Talking to dealers, I’ll hear that StagParkway isn’t the cheapest distributor in the RV industry. But their business partners (dealers and suppliers) get their money’s worth for their affiliation. For example:

• StagParkway doesn’t have its own proprietary line of knock-off products they use to compete with their supplier partners. I cannot imagine hosting a buying show and making suppliers pay a lot of money for booth space, only to take that money to pay for the distributor’s own exhibit space so their staff can take orders for their own line of products that undercut the suppliers supporting the show. 
• StagParkway’s strategic acquisition of DTI gives them the ability not only to deliver repair parts quickly, but to use technology to show dealers which part to order, then to place the order and later find the right part in the right bin.
• With 11 warehouses, the dealership can virtually guarantee next day delivery of most parts to almost every dealership in the country.
• Their annual aftermarket show not only brings buyers and sellers together, but it does so in a fun environment in which success is celebrated and everyone can enjoy a good time.
• They sponsor the annual Lifetime Value Award which recognizes RV dealers who are committed to seeing each transaction as a foundation for developing future business and creating a lifetime revenue stream for the dealership.
• They are one of only two wholesale distributors which actively invest in the RV Learning Center, thus supplying money to develop curriculum to train people at all levels of an RV dealership.  Not surprisingly, NTP Distribution is the other wholesaler stepping up to support the industry which drives its business.
• Stag, like NTP Distribution, derives 100 percent of its income from the RV industry which allows both companies to focus their time and expertise in serving RV dealers.
• Stag is the only wholesale distributor on Go RVing’s Go the Extra Mile contributor’s list. They donate at the Pacesetter level.
• They launched an initiative last year to help RV dealers reduce buyer’s remorse – and sell more aftermarket products – by helping consumers select lifestyle products from a catalog while waiting for the finance manager to complete paperwork to close a sale.
• StagParkway give suppliers an opportunity to promote their products through product training seminars at their dealer show.
• While NTP Distribution may have pioneered the store-set concept to give RV parts stores a makeover, StagParkway pioneered the bolt-on electronic parts catalog which makes it possible for dealers to offer a full line of thousands of RV parts and accessories online without having to stock the inventory themselves.

In my opinion, NTP Distribution’s commitment to excellence is similar to Stag’s, and its influence in the RV industry is growing as demonstrated by the agenda for their buying show which takes place Feb. 26 to March 2. Competition is a good thing because it makes everyone stronger. Hopefully, RV dealers are smart enough to see which wholesalers are truly helping them to build strong businesses for the long haul, and then reward that investment in their success by helping the distributors achieve theirs.

Next year, StagParkway will be hosting their dealer show in New Orleans, a fitting location since most other distributors who compete against them are already singing the blues.

It continues to baffle my mind why so many RV dealers opt out of actively participating in the Go RVing campaign.

The most conservative industry estimate shows there are 3,500 RV dealers in America, yet less than one in four cough up the $225 annual fee to become an “official” Go RVing dealer. For just 62 cents per day, those dealers who do invest in the campaign receive a complete set of Go RVing posters and access to a professional ad builder website that creates messages for local dealerships that feed off the national campaign. They get to tap into the resources of one of the nation’s most brilliant and expensive marketing agencies. The also get access to professional lifestyle photography and B-roll footage to augment their local advertising efforts. More importantly, these dealers get access to more than 250,000 leads – names, addresses and phone numbers of people actively investigating the RV lifestyle.

Pretending that only one in 50 leads were located anywhere near the dealership’s primary market, that still means Go RVing dealers have access to 5,000 potential buyers.  Pretending that only one in 10 leads turns out to be a legitimate prospect, the dealership still has access to 500 solid leads.

The 2007 Go RVing campaign kicks off on Valentine’s Day with a high-profile spot on American Idol – television’s juggernaut franchise. Ads will also appear during horseracing’s Triple Crown series, professional bowling’s championship series, and ESPN’s NASCAR coverage.

In fact, ads will appear on more than 30 major cable channels, 29 national or regional magazines, and 25 of the most popular websites and search engines.

I doubt the average RV dealer could afford to have a significant presence on any one of these high-profile media venues. Yet, millions of consumers will see the Go RVing ads and thousands more will be intrigued enough to visit a local RV dealer or RV show.

Walk into most dealerships and you’d hardly tell a massive, expensive national advertising campaign was underway. There are no posters, no brochures, no local tie-ins, no banners, no buttons, no flyers – nothing – that ties the local dealership to the national campaign.

This is an incredibly short sighted approach to business marketing. Can you imagine McDonald’s Corporation investing millions in advertising the latest Disney movie to entice families into the restaurants – only to find no posters, banners, buttons, counter displays, cups, Happy Meals or tray liners that didn’t tie into that campaign?

At $1.5 million, the average McDonald’s restaurant isn’t nearly as capitalized as the average RV dealership. Yet, they make a fortune selling $4 Happy Meals, not $25,000 travel trailers and $100,000 motorhomes.  How?  By leveraging the power of a national marketing campaign at the local level.

As a former professional photographer, I never turned down an opportunity to participate in a national marketing campaign orchestrated by my film processing lab. By doing so, my firm was recognized as the fastest growing event photography firm in the nation in 1988.

Dealers who scoff at spending $225 a year to actively participate in the Go RVing campaign wouldn’t bat an eye at spending $2,250 for a single advertisement in the local Sunday paper to generate far fewer than 500 hot leads.

Dealers aren’t the only businesses at fault here. Unless I’m living in a vacuum, I don’t see many advertisements from RV manufacturers that tie into Go RVing themes, other than a logo on the back of a sales brochure.

I’m hoping someone can explain the rationale behind what appears to be irrational marketing decisions.

After much reflection, here are what I consider to be the top news stories of 2006.  What did I miss?

Camping World sales continue to decline – Once the feared giant of the RV industry, dealers are much less anxious to hear a Camping World store is opening near them following news reports published only by RV Trade Digest that the company’s same-store sales figures are declining.  Have dealers become savvier in branding quality over price when it comes to accessory items?  Or have consumers realized that the Wal-mart of the RV industry isn’t the place to go for knowledgeable advice on which products work best for a particular situation?

Sunline RV shuts its doors – After 40 years of service, Sunline RV abruptly shut its doors leaving many people to scratch their heads wondering what happened? Dealers say they want quality products, manufacturers tell me dealers can’t sell quality at prices that justify the expense. Sunline RV, well-known for its quality products, shuts its doors after 40 years of service claiming it can’t make money. Maybe the manufacturers are right after all because dealers vote with their checkbooks to support OEMs who don’t provide quality but hit the ever-subjective price-point dealers are looking for.

Gas prices – Who could have predicted gas prices would soar to record levels this summer only to fall back almost as quickly as they rose. The fluctuating prices posed headaches for motorhome dealers, but travel trailer buyers seemed more interested in paying for quality time off.

Richard Coon takes command of RVIA – The former CEO of Onan hit the ground running when he formally took control of the RV industry’s largest trade association. Working side-by-side with outgoing RV Industry Association president David Humphreys for more than a year did much to prepare Coon for his new job. The first order of business was to start a fire to barbecue a few sacred cows, especially those related to the industry’s lackluster record regarding RV service issues.

Fleetwood’s turnaround – Perhaps the most underreported story of the year, the folks at Fleetwood have done a phenomenal job in turning around the RV division. The products are innovative, the marketing is exceptional. At both the National RV Show and Fleetwood’s own dealer event a few months earlier one thing was apparent – the company has a vision and the entire team appears to be on fire and focused to a mission to reclaim lost ground and capture market share from its competitors.

Coachmen struggles – Coachmen had a tough year in 2005 when sales fell 25 percent. Sales continued to slide in 2006, but the company well managed its finances to show a profit. The sudden departure of Claire Skinner as chairman and CEO in August signaled the company was still struggling to redefine itself in face of tough competition, especially from Thor which passed the $3 billion mark with sales increases of 20 percent.

RV Trade Digest enters the 21^st century – Our staff started posting breaking news on its website in January of 2006. Since then, weekly page views have risen nearly 1,800 percent as people discovered the benefit of news being reported from an independent source. Then, in March, we introduced flip books, which proved to be a convenient way for people to receive RV Trade Digest and Aftermarket Success electronically.

RV movie is a big hit – Nobody knew for sure what to expect when plans for the RV movie starring Robin Williams were announced during Committee Week in 2005. But the final product was a big hit with families as it made $87 million at the box office worldwide and ranked as the 32^nd highest grossing movie of 2006.

The maniacal control of RV owners by local governments – Perhaps the second most underreported story of the year is the disturbing trend about city governments reaching out the long arm of the law to prevent RV owners from storing or parking units on their own property or on city streets. Convenience may soon become a hindrance to ownership.