Emphasizing service, Lazydays parties through RV doldrums

SEFFNER — It's party time for members of the Freightliner Chassis Owners Club at Lazydays' Rally Center.

Line dancing class just ended; tonight's events include bean bag baseball. "They'll be cheering and yelling," said Pete Pizzaro, a longtime rally coordinator and official Lazydays ambassador.

"We'll be cheering and yelling," his wife, Alice, corrected him.

Life's always festive here at the largest, single-site RV center in the nation. But the down-home frivolity — where there's always free breakfast for campers waiting in the cafe and Dolly Parton songs playing at the Cracker Barrel — masks a deeper reality: a battle for survival.

The RV industry has weathered recessions before, but nothing quite like this. Some of the biggest RV manufacturers in the country — Monaco Coach, Fleetwood and Country Coach — have filed for bankruptcy reorganization. The top dog among manufacturers, Winnebago, recently announced a $35 million operating loss for the first six months of its fiscal year. RV sales nationally are off 45 percent year over year.

Banks have tightened financing for luxury purchases like recreational vehicles and boats. Bank of America went a step further with a new requirement: Any dealer who sells RVs built by manufacturers that have either filed for bankruptcy protection or gone out of business must get buyers to sign a document stating that they understand they may not get warranty service.

Ellsworth Clarke, president of Bank of America's dealer financial services, insists that money is still available for qualified buyers, but the bank has to be prudent in lending.

"The (RV) industry is, in my opinion, at overcapacity right now, and, unfortunately, it's because of the economic situation," Clarke said. "It will be a smaller group of dealers that will survive this."

Certainly, Lazydays is taking steps to remain in that survivors' camp. A few weeks ago came its fourth round of layoffs along with a 5 percent pay cut for workers who aren't paid on commission. Between job cuts and attrition, its workforce has shrunk from nearly 700 to 481.

There's an $8.1 million debt payment that was due to bondholders in November that Lazydays has repeatedly managed to push back, avoiding default.

Lazydays chief executive John Horton appears unfazed. Walking around his company's 126-acre complex, Horton exudes a calm, understated demeanor that serves him well in times like these.

"The market is down. We've seen dealers go out of business; we've seen manufacturers go out of business," Horton acknowledges, "but we're not doing anything fundamentally different."

In fact, he says, the last thing Lazydays wants to slash is anything affecting customer interaction. "The level of customer service we provide has to be better than it's ever been" to capitalize on the diminished customer base, he said. "This is all about the experience."

Signs of relationship building are everywhere. A fleet of 170 golf carts zips around the campus taking RVers from parties at Rally Park to the cafe to shop at the adjacent Camping World. Roughly 250,000 free breakfasts and lunches are served a year. Those who spend $250,000 or more for an RV get a three-year membership in the elite CrownClub, which comes with a lounge, bar, dining room, swimming pool, library and complimentary cocktails and hors d'oeuvres in addition to the free meals.

Dedication to customer service, Horton said, is one reason Lazydays continues to pick up market share as smaller, less-capitalized competitors fail. In 2008, Lazydays' lone location accounted for 10.4 percent of all Class A diesel motor homes sold nationwide.

Mark Polk, an RV expert from North Carolina who runs the "RV Education 101" Web site, thinks Lazydays' strategy makes sense.

The RV dealers faring best right now "are not centering everything around selling the RVs," Polk said. "They're trying to provide good service to new customers and those that already own RVs."

Dealers are also taking more units in on consignment, renting more of them, and relying more on used RV sales, Polk said.

Lazydays has sold more used than new RVs in the past year. In addition, more affordable towable and fifth-wheel vehicles have increased as a percentage of the sales mix.

The trio of major manufacturers in bankruptcy — Fleetwood, Country Coach and Monaco — are all on the new side and account for less than a fourth of Lazydays' business, Horton said.

Some shoppers raise concerns about whether warranties with those new vehicles will be honored. Horton says the majority of potential problems, including all the appliances in the vehicles, are covered by other companies. And if an uncovered dispute does arise, he says Lazydays' service department will try to work with buyers to handle it.

The Wallace touch

Tucked off Interstate 4 at County Road 579, Lazydays has become a mecca for travelers across the country.

The company lore around founder Don Wallace is well known in the Seffner park. A Tennessee native, Wallace moved to Florida as a teenager and went to school in Tampa before returning to Tennessee to farm for nine years.

He came back to Tampa to start a landscape business but, as a backgrounder on the company history states, "fate intervened." He enjoyed RVing as a family pastime and approached his father and brother with the idea of starting an RV dealership.

When Lazydays opened in 1976, its headquarters consisted of a mobile home, two travel trailers in inventory and $500 in capital. Twenty years later, the dealership was bursting at the seams and moved to its current location.

Co-workers called Wallace a natural businessman, a natural salesman. He parlayed that talent into building a fortune, and became a well-known philanthropist and owner of one of the most expensive and expansive homes in the Tampa Bay area.

In 2004, Wallace sold a majority stake in his company to the private equity firm of Bruckmann, Rosser, Sherrill & Co. for $206 million.

Looking ahead

Some say that RVs represent a bygone era, fueled by cheap gas and affordable long-distance journeys. Looking past the recession, bloggers tracking the industry have speculated that massive, fossil-fueled traveling homes won't survive.

Horton scoffs at that. Loyal RV customers may be holding on to their vehicles longer than the typical three-year trade-in, but they're still returning.

"As long as we treat them right," he said, "we know they'll be back."

Exhibit one: the Pizzaros.

Pete and Alice Pizzaro have driven through every state in their Fleetwood Discovery, "except for Hawaii,'' Alice says, chuckling, "and when they build a bridge, I'll go there. I don't like to fly."

Driving the open road together keeps them young, keeps them close, they say. Pete marvels at how many retiree couples he sees at RV rallies who are holding hands.

They feel taken care of and don't fret about warranties that might not be covered. Nor are they worried that the RV lifestyle will fade into the sunset. There will always be plenty of travelers like him willing to pay for it, Pete says.

"Once you get it in your blood," he said, "it's hard to get it out of your system."

Jeff Harrington can be reached at jharrington@sptimes.com or (727) 893-8242.

Emphasizing service, Lazydays parties through RV doldrums 04/03/09 [Last modified: Monday, April 6, 2009 2:30pm]

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