RV Weekly

The story that broke late last week that several large RV dealerships were going to lose their Camping World stores after refusing to sell their dealerships to FreedomRoads is an interesting one, indeed.

I received several phone calls Friday afternoon from RV dealers and others in the industry telling me about the “big news.” Digging into the story seemed to confirm many of the details I had heard, if not through outright confirmation, then by carefully worded non-denial denials. The story made sense to me because it seemed to follow the modus operandi of how Affinity Group’s companies seem to treat other firms.

• Campground owners have long realized that if they don’t advertise or reduce the size of their ads in the Woodall’s directories, their site ratings mysteriously fall that year.
• Dealers who submit customer names for camping discounts through Good Sam Club find their own customers solicited by Affinity Group’s other corporate entities.
• Dealers who agree to stock Woodall’s directories in their accessory stores treat customers to many pages of advertising for Camping World and other AGI entities — it’s like putting competitor flyers at the front entrance to the dealership.

So why wouldn’t FreedomRoads strong arm a dealer into selling his location and then retaliate if the dealer turned the company down? Worse things have happened in our competitive, capitalistic marketplace.

Then, an amazing thing happened Saturday morning. Marcus Lemonis himself called my cell phone to discuss the story. Marcus wanted me to have the “facts.” It was an amiable conversation in which he outlined his rationale for closing the store in Clarksville, Ind. He also denied threatening to pull the location in Amsterdam, N.Y., but said he wanted to keep his options open. He outright denied claims that the Katy, Texas, store was closing because it was already attached to a FreedomRoads store, not Holiday World of Houston.

Marcus spent a great deal of time reassuring me that FreedomRoads is not a bad company and that he’s not a bad guy, and I don’t doubt that. But the whole FreedomRoads/Camping World saga does raise some questions.

Marcus claims there is a stone wall — he called it a Chinese wall — separating FreedomRoads from Camping World and both from the Affinity Group. He said they are separate companies operated independently under a common owner. In fact, he cited Berkshire Hathaway as a similar example noting that the megacorporation owns Dairy Queen and Fruit of the Loom.

As independent companies, Marcus claimed there was no exchange of information between FreedomRoads and Camping World and the Affinity Group. My how I wish that was true. It’s hard to imagine completely separate entities being run as independent businesses under the direction of the same two people — Marcus Lemonis and Steve Adams — when FreedomRoads stores are hosting Camping World locations and Camping World RV Sales stores are popping up all over the country.

It seems so much information is exchanged between the three companies that some believe a stone wall really insulates the conglomerate from the industry, but that a white picket fence separates the companies within that wall.

This summer, I spoke with several former FreedomRoads employees and even a dealer who sold out to FreedomRoads. I also spoke with RV dealers who have been approached by FreedomRoads and Camping World. I chatted with an independent RV dealer who leased space to Camping World for a store at the dealership’s locations. If there is one undeniable fact, it’s that proprietary dealer information frequently finds its way to Camping World. And from there it is a short hop, skip and jump to FreedomRoads.

Time after time when independent RV dealers exchange customer names and addresses with any company affiliated with the Affinity Group, the dealers’ customers almost immediately begin receiving Camping World solicitations.

In the past it really didn’t matter to the dealers because, for many, there wasn’t a Camping World in their market. The mailings were more of a nuisance because customers would bring the flyers into their local RV dealership asking if the dealer could match the Camping World price.

But, as more Camping World locations pop up around the country, dealers are now finding themselves face to face with a serious, well-funded competitor selling rolling stock either at FreedomRoads locations or through Camping World RV Sales. The customer names and addresses provided in goodwill to Affinity Group companies for some other benefit, like camping discounts, are now being used to draw those customers away from their dealership of origin.

Some of the bigger names in the RV industry have pretty much had enough of this tactic. A few lawsuits are pending and we’ll keep an eye on those as the cases unfold. Several are claiming that FreedomRoads/CampingWorld/AffinityGroup have breached a contract or non-compete agreement in the way they enter a market or market products. It could get ugly as manufacturers are drawn into the fray over territorial rights.

Gold Medal Camping World dealers who have leased space to the store or, in some instances, designed new facilities to specifically accommodate a Camping World location are learning a tough lesson as Affinity Group’s FreedomRoads subsidiary buys out a nearby dealership and opens up a Camping World store on that site. The dealers who designed and leased the space hoping to draw traffic to their locations are left holding the bag as their customers are enticed to the new location.

As I have said in this space many times before, it’s not that I have anything against Camping World or Freedom Roads or even Affinity Group. Independently, these businesses would be good for the RV industry. Joined together, I think they are dangerous for their ability to control and influence a huge segment of the market.

Yes, Berkshire Hathaway may own Dairy Queen and Fruit of the Loom. But they are two very different companies operating in completely different markets — and you don’t see many Fruit of the Loom displays in Dairy Queen locations, nor do you receive underwear coupons with your Dilly Bar.

If AffinityGroup/FreedomRoads/CampingWorld is serious about creating a stone wall between the companies, it would be nice to see a cement truck in the neighborhood.

Thor Industries announced this week that it had promoted Dicky Riegel as its new chief operating officer and that all Thor subsidiaries will report to him.

I have only had the opportunity to meet him on a handful of occasions, but each time Mr. Riegel has impressed me as being a genuinely nice guy. He seems passionate about what he does, but caring enough about people that he isn’t a ruthless crusader climbing to the top over the backs of others. Apparently, the chieftains at Thor see even better qualities in him as evidenced by his meteoric rise in power and influence at the company.

Before he was 38, Riegel brought Airstream into the 21st Century as its president. At 40, he was tapped to serve as group president over seven other Thor manufacturers and helped lead the company to continued profitability quarter after quarter. His latest promotion shows that, at 41, Riegel is being groomed for greatness in the RV industry.

I’m sure it helps being the son-in-law of Thor Chairman, President and CEO Wade Thompson. But, as a dad of daughters only myself, I suspect Thompson sees something in Riegel that sets his heart at ease in knowing that he can entrust two of his most valuable assets to Riegel’s care — his company and his daughter.

Although I feel uncomfortable calling the leader of a billion dollar company “Dicky,” I’ll simply offer my congratulations to Dick for his remarkable performance and a well-deserved promotion.

With thousands of people left homeless by the ravaging wildfires that torched California, it will be interesting to see how FEMA responds to this latest tragedy.

Sitting in storage sites along the Gulf Coast are hundreds, if not thousands, of quality temporary shelters produced by the RV industry in the weeks following Hurricane Katrina. Many have never been lived in. But all can be shipped to California by Monday, with a little coordination and planning on behalf of our federal emergency response agency.

We’ll see if FEMA has the guts to do the right thing and send those units to California, or if they will side with the Sierra Club and keep the units locked up tight over fears they’ll “poison” people because of so-called toxic levels of formaldehyde.

By the way, neither FEMA nor the Sierra Club have been able to come through with my offer to spend a week in a FEMA trailer to prove the alleged toxic effects of our products are nothing more than environmentalist whacko hot air.

Our hearts go out to the folks at Franklin Coach who lost everything in the tornado that ripped through Nappanee, Ind., late last week. I can only imagine the emptiness that owners Don, Rick and Steve Abel must feel in after investing time, effort and money in the 62-year-old business only to lose it all in the blink of an eye. Employees who also invested sweat equity in building the business must also be devastated after realizing how quickly they were put out of work.

The staff at Gulf Stream also has its hands full cleaning out tons of debris from fallen buildings, smashed products and the remains of the Franklin enterprise blown onto their property from across the street. Because they are located in the heartland of America where people genuinely care about others, I’m confident the Gulf Stream team will rally around the company and get it back on its feet quickly.

In the other end of the country, ultra-fast-spreading wildfires have already destroyed several RV parks and, likely, RV dealerships. The disaster is advancing so quickly that government officials admit they don’t have an accurate count as to how many homes and businesses have been destroyed. At the very least, the thick smoke blanketing the area is rendering the RVs on dealership lots unsalable.

Fueled by 70 mph winds and extremely dry conditions, the impact of this disaster will be unfolding for days to come. Already, 374 square miles of land has been torched. Nothing can stop it. Witnesses on a 10-lane Interstate highway helplessly watched as 100-foot flames raced up the land, lept over the pavement and scurried up a hill to consume 10 homes in less than 10 minutes.

More than 500,000 people have been forced to flee from the area. It’s unfortunate that many of them likely own RVs, but can’t legally park them in their driveways or yards in order to evacuate themselves, their pets and their neighbors when emergencies like this arise.

These sobering incidents remind us all of the absolute necessity to frequently and consistently back up important data — and store it off site. They also remind us that the government is essentially helpless in truly protecting us from disaster. To rely on them before the fact is foolish and dangerous.

The incidents once again give the RV industry another opportunity to step up to the plate and help those affected by natural disasters. If there is anything we, as an industry, can do to help our fellow business owners recover, I’d like to know what it is. I’ll be happy to use this blog and our forum to post their needs in hopes of marshalling resources quickly to the impacted areas.

We’ve proven over and over again that our industry not only helps its own, but it rushes in to help others as well.

With two RV dealerships under its acquisition belt, Charter Equities has distributed a brochure to potential investors suggesting they could generate a 1,000 percent return on their investment in Charter stock. I’ve uploaded a copy supplied by a reader which you can download by clicking on Charter Equities Bull Market Investor Alert.

In a publication distributed called the Bull Market Investor Alert, Charter Equities boldly claims “The Recreational Vehicle Industry Continues to Earn Record Revenues” — something that may come to the surprise of many RV manufacturers and suppliers going into the fourth quarter of 2007 scratching their heads and muttering “what happened?” Maybe someone should tell Charter that they are seeking investors in the recreation vehicle industry not in recreational vehicles.

“CEQI could be the hottest stock of the fall,” the publication claims. “Early investors could make huge profits with CEQI.”

Noting that Charter Equities has acquired Saddleback RV, “a $24 million per year Recreational Vehicle Dealership with plans to acquire additional dealerships by 2010 delivering potentially over $150 million per year in additional revenues.”

I certainly wish any company luck in their ability to grow a $24 million RV dealership into a $150 million enterprise in 26 months.

To add credibility to these outrageous claims, the document drops names of truly influential companies like Winnebago Industries, Fleetwood, Monaco and Thor Industries. The firm even manages to tie its own future success story to that of Warren Buffet’s acquisition of Forest River.

The full-color brochure highlights the wonderful accomplishments of many manufacturers and features RVIA-supplied lifestyle quotes from celebrities, sports heros and even Barack Obama. However, the point of Charter Equities apparently is to acquire RV dealerships. Wouldn’t it make more sense to promote the profitability of dealerships than the profitability of manufacturers?

“Are you seeing the potential? CEQI is trading at THIS LOW PRICE and has OVER $24 million per year in revenues. At THIS PRICE can you imagine where this could be in a few years if CEQI has over $150 million per year in revenues? OPPORTUNITY IS KNOCKING! CALL YOUR BROKER AND PICK UP SOME SHARES TODAY!! A $20,000 investment could easily be worth $100,000 in a very short period of time. You could take your profits and buy your own Recreational Vehicle.”

I checked. The stock is trading today at 30 cents per share. So, yes, it would be a good deal.

In the past couple of months, my inbox has overflowed with ridiculous offers from various Chinese companies trading stock for pennies, but poised for immediate growth. I never thought I’d see the same tactics applied to companies in this industry.

For the record, I have attempted to contact Charter Equities several times to meet with them when I’m in Phoenix next month. Apparently, they are too busy scrounging up investors for the Recreational Vehicle Industry and laying the groundwork for HUGE PROFITS to return my call.