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Competition Heats Up in Central Ohio Market

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August 23, 2010 by   Leave a Comment

Tom Raper Rvs logoA battle for central Ohio’s recreational vehicle dollars has begun, the Columbus Dispatch reported.RCD Sales logo

On one side is RCD Sales, an established local dealer with stores near Hebron and Pataskala. It’s a family business run by twin brothers.

On the other side is Tom Raper RVs, an Indiana-based superstore that just opened a showroom in Madison County.

The battle will be fought with swivel entertainment centers, inner-spring quilted mattresses, foot-flush toilets and at least one inflatable monkey.

Both companies downplay the rivalry.

“Columbus is a big market,” said Chuck Haire, co-owner of RCD. “There’s room” for several competitors.

Like the auto industry, RV sellers have suffered through years of low sales and tight credit. Many of the retailers have shut down or scaled back. For example, the region’s oldest outlet, Post Traveland on the north s ide, is relying more on parts and service and used-RV sales.

RCD and Tom Raper are two of the exceptions, among the few that have expanded. They both stock hundreds of RVs, from palatial motor homes that cost more than $300,000 to used tent campers that sell for as little as $2,000.

The RV industry considers people 55 to 64 years old its “sweet spot,” and that group is projected to grow 15 percent between 2008 and 2013, a sign of better times to come for the industry, according to a July research note from Robert W. Baird & Co.

Because of this, leading manufacturers such as Thor Industries Inc. and Winnebago Industries Inc. are optimistic, although they are bruised by recent challenges. Thor, which includes the Airstream brand, is based in Jackson Center, Ohio.

The customers are people such as Sharon Mullinex of Dresden, who was browsing at RCD’s Hebron store recently. She and her husband visit their children and grandchildren across the Midwest and vacation in Florida. They save on hotels because they’ve found that Wal-Mart stores and Flying J gas stations allow RVs to park overnight for free.

“When you travel, it’s like your little home on the highway,” she said.

Family business

The business that became RCD began in 1974 selling various types of used vehicles, but not RVs. Charles Haire, the father of the current owners, hoped for a fresh start in central Ohio after he had moved his family out of the Cleveland area. The name RCD was chosen almost at random; it was the initials of one of the people involved in the venture, Ronald Charles Davidson.

In 1983, the business began selling new travel trailers. By that time, Charles’ identical twin sons, Chuck and Tom, were full partners. The RV part of the business took off, and RCD began selling larger towable trailers and even motor homes.

The company persevered because it was frugal, Chuck Haire said. The owners reinvested profits in inventory and reduced debt.

Today, a third generation does much of the day-to-day management. Chuck’s son, Ryan, is at the Pataskala store, which opened last year. Tom’s son, Brad, is at the Hebron store. The stores have more than 200 units in stock.

The business keeps them so busy that this RV family almost never goes camping, Chuck Haire said.

While RCD grew, many of its competitors came and went. One of the largest, Farber RV Superstore in Reynoldsburg, closed its showroom during the recent recession. The company chose to focus on its other product line: specialty vehicles for commercial use.

Several local car dealers opened RV lots, only to close them in the past few years. Examples are Ricart Automotive in Groveport and Bob Caldwell Automotive on the North Side.

Rhett Ricart, co-owner of Ricart Automotive, found that customers were willing to drive across the country to get a good price or the right features on an RV — much farther than they might drive to buy a car. This meant that dealers needed to have a gigantic inventory and the room to display it.

“You can’t possibly stock enough units,” he said.

Have monkey, will travel

In this nationwide market, a few superstores are willing to pay to offer customers a huge selection. Among them is Tom Raper RVs, which was started in eastern Indiana.

The namesake founded the business in 1964. He initially sold used cars, but then found he had a special talent for selling RVs, said Jim Leep, general manager of the central Ohio store near London.

“He built something from absolutely nothing,” Leep said.

And he built it on a memorable name, one that ended up seemingly everywhere, particularly on billboards and the radio.

The founder sold the business to a group of investors in 2002, and he is retired in Florida. The new owners could have changed the name, but they found it was a valuable brand.

Today, there are three

Tom Raper stores in Richmond, Ind., in the Cincinnati area and now in central Ohio have a total inventory at the three of more than 500 RVs.

Many central Ohio customers were willing to drive to Richmond, off I-70 just across the state line, to shop, Leep said, but he hopes the new store will enable the company to get a larger share of local sales and parts and service.

The Madison County store opened early this summer. It doesn’t have a permanent sign installed yet. The best way to spot the place is the giant inflatable monkey, put there to get the attention of drivers on I-70.

Like the monkey, some of the high-end motorhomes are a jarring sight, almost like spaceships on wheels. The Allegro brand features swivel captain’s chairs up front and top-of-the-line furniture and cabinets in the back.

The tag line: “Absolute power delights, absolutely.”

Low sales, tight credit

As RCD and Tom Raper have grown, the industry has shrunk. The nation has about 2,700 RV dealers, down about 180 from two years ago, according to the Recreation Vehicle Dealers Association (RVDA).

This is because of a decline in sales and reluctance by banks to maintain dealers’ credit.

“When it comes down to it, RVs are a discretionary purchase,” said Phil Ingrassia, spokesman for the association. “When people feel better about their job situation and feel better about the stock market, they invest in an RV.”

There are early signs of a rebound. Through June, dealers had sold 92,227 units this year, up 3.2% percent from a year earlier, Statistical Surveys Inc. (SSI) reports.

The credit problems have been particularly troubling for smaller dealers such as Post Traveland, which has been around since 1956.

“Last year was as bad as you can imagine,” said Wayne Post, the semi-retired owner.

His lender, Bank of America, raised the cost of credit to the point that it no longer made sense to borrow to pay for new inventory, he said. This was frustrating to Post because Bank of America and other lenders have gotten government aid, and he sees little reason for the restrictive lending terms.

Last year, he sold 59 new RVs, the fewest in company history. His company is still profitable, though, because of other profit centers, such as parts and service, sales of used RVs, RV rentals and propane sales.

Like his larger competitors, he has benefited from the closings of other dealers. He is now one of the only options for RV service in Franklin County.

Post is staying in business because he enjoys it. At heart, RVs are fun, he said.

That is a common sentiment among all the dealers interviewed, and one that makes the last few years a little more bearable.

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