Spurred by the RV industry’s resurgence and a subsequent jump in sales over the past year, Southern California dealer Giant RV is poised to begin construction on a new dealership in Indio.
“We are back in expansion mode,” Frankie Barouti, vice president of Giant RV, told RVBUSINESS.com. “Business is strong and we see the opportunity to grow.”
Barouti reported that the 26-year-old company, which currently operates stores in Murietta, Colton, Corona and its home base in Montclair, also has long-term plans to open its first location in Orange County – a hotbed for RV dealers. Currently Giant RV, led by President Bob Barouti, employs approximately 270 people.
Situated on six acres in California’s Palm Desert region with immediate access to Interstate 10, the Indio property was purchased by Giant RV around seven years ago. Frankie Barouti said that initial landscaping was implemented after the land was secured, but the industry’s downturn delayed further construction.
“We brought in over 190 truck loads of dirt, bringing the land eye level with the 10 freeway,” he said. “It’s a great location, right next to the Auto Mall and in an area where there’s only one other dealership. We see a lot of potential.”
Giant RV is currently testing the market, operating a makeshift sales center from a suite of mobile offices and a huge tent area.
“Right now we’re just finalizing everything for construction,” Barouti said. “All the permits are in place and we’re talking to contractors.”
Giant RV’s vision, however, is well beyond the blueprint stage with completion projected for the fall.
“We are building a true state-of-the-art facility,” Barouti said. “The main building will be 5,000 square feet that will include sales and a full-service repair center with 14 bays. It’s going to based on the same design and upscale feel of our other stores.”
Barouti related that Giant RV is known as one of the premier dealers for toy haulers in the country and was a forerunner in the decidedly West Coast influence that fueled the sector’s rapid growth.
“We really dominated the toy hauler market over the last year 9 1/2 years,” he said, noting that the retailer sells a full range of new and used RVs. “Even during the downturn, we were able to bring in some of the hottest brands like Eclipse RV’s Attitude and the Cyclone from Heartland. We also added CrossRoad’s towable line.”
He added, “We’re back on it – doing what we do best – and are looking for another strong year. We think it’s a great time to expand and we see Indio as a great location for Giant RV.”
A fire Monday (Oct. 15) at Giant RV in Murrieta, Calif., burned one recreational vehicle, but the quick work of firefighters prevented the blaze from spreading to nearby vehicles, fire officials said.
The Press Enterprise reported that a diesel motorhome parked in the Giant RV lot caught fire about 10 a.m. Firefighters arrived to find the blaze had spread through the interior of the RV, which was parked at the edge of the lot along Interstate 15, said Battalion Chief Pat Jennings of the Murrieta Fire Department.
As firefighters gathered up hoses from the lot and the acrid scent of burnt RV interior hung in the air, Jennings said it was unclear what touched off the blaze.
He said dealership employees had turned on the RV and were charging the battery when the fire started. It appears they were preparing the motorhome to be delivered to a customer, he said.
A fire investigator was called out to inspect, Jennings said.
Because the fire started during business hours, it was quickly reported, Jennings said.
With RVs parked so close together, the fire could have easily spread to other vehicles, he said.
Editor’s Note: The following story, part serious, part humorous, was written by John Weeks, a staff writer for the San Bernardino (Calif.) Sun. What he writes about may never come to pass but it is interesting to consider.
It’s the first great idea of the new year, and it’s not even mine. It comes from reader Steve Fast, who lives in Hemet and works in Colton as a sales representative for Giant RV.
Check it out. He suggests that San Bernardino put on a spectacular street festival each year featuring … recreational vehicles!
That’s right, the RV Rendezvous, as we shall call it for now, would take place each year in January when all the “snowbird” people are here from around the country. The event would be a midwinter equivalent to the great Stater Bros. Route 66 Rendezvous, that one featuring cars, that is held each summer.
I love this idea. The RV crowd already is in the area, forming their annual encampments throughout the Southland desert. Why not invite them to swing through San Bernardino on a given weekend, or even multiple weekends? They’d have a great time showing off their rides, and the rest of us would have a great time partying down with them.
Just as the Route 66 Rendezvous features a long cruise line of hot cars through downtown San Bernardino, the RV Rendezvous would feature a long cruise line of dinosaur-size motorhomes. Of course, we may want to make the parade route a bit shorter, since these babies get about one city block per gallon of gas, but that’s OK.
There also will be “show and shine” events, maybe at the National Orange Show Events Center or else in large parking lots throughout downtown, where the RVs will just park for a while and allow spectators a closer look. Some owners even may allow visitors to step inside for a walking tour. Wow. You never see that at the summer Rendezvous.
The streets would be blaring with music, of course, throughout the RV Rendezvous. Some of the Baby Boomer music we hear at the summer event might work here, too. On the other hand, this will be a slightly older crowd, so we may want to work in some Big Band standards, a little Bing Crosby, Rudy Vallee, Tennessee Ernie Ford …
Hey, Ernie lived in San Bernardino! He got his start at local radio station KFXM. Perfect!
Speaking of noteworthies, we should establish an RV Hall of Fame that would serve as an added attraction during the RV Rendezvous. My nominees for inaugural inductees include the late daredevil stunt performer Evel Knievel, who used to jump motorhomes on his motorcycle; Anne Murray, who recorded her hit song “Snowbird” in 1970; and Good Sam, the smiling mascot of the Good Sam Club, the international RVers organization.
Maybe we even can have an RV Film Festival during the RV Rendezvous. We’ll open up the California Theatre and screen such classic RV-centric movies as “Motor Home Massacre” (2005), “Winnebago Man” (2010), “RV” (2006), “Lost in America” (1985) and “About Schmidt” (2002).
This is going to be great! Of course there will be plenty of vendor booths at the RV Rendezvous, offering items that appeal to the RV crowd. You know, lawn chairs, polyester clothing, floppy hats … stuff like that.
And there will be food booths galore, serving up all the street festival favorites, such as steak sandwiches, hot dogs on a stick, funnel cakes … the classics.
Hmmm, we also need something for those finicky seniors, don’t we? How about deep-fried steamed prunes?
As the 58th Annual California RV Show turns toward the home stretch of its 10-day run at Pomona’s Fairplex, the weather appeared to be clearing on Friday (Oct. 22) for the finale weekend.
And that’s a good thing, because six days of on-and-off rain have tested the nerves of participating dealers and the 43 RV manufacturers who have stepped up to show some 800 units at the Fairplex show, the Recreation Vehicle Industry Association’s (RVIA) only sponsored retail event.
On the other hand, there were encouraging signs at the 460,000-square-foot exposition — versus 420,000 square feet of exhibit space last year — that the Southern California marketplace is gradually coming back to life.
As Marsha McGinnis, RVIA’s western show director, pointed out: “The shoppers have been here. They’ve come out with their rain gear.”
Statistically speaking, attendance by Friday was probably running a bit ahead of last year’s show, which ultimately registered 18,200 attendees, according to McGinnis.
And the weekend weather forecast was looking rather good, as were some of the visitors’ buying habits. “Everybody has the notion that we save our best prices for the weekend,” said McGinnis. “The banks are here and the credit companies are here and the sales have been up. The buyers have been coming out in the inclement weather and buying in a greater percentage over 2009. That’s reflected on the move-out lists.”
The dealers with whom we spoke came down on both sides of the fence with regard to Pomona.
Of course, given the weather, show reports were mixed at week’s end.
Bob Barouti, of Montclair, Calif.-based Giant RV, which had several displays incorporating about 125 to 150 Fleetwood, Thor, Heartland, Forest River and MVP lines, didn’t sound all that enthused.
“We are not totally happy, but are thankful for what we are doing,” said Barouti, who had sold about 75 units by Friday. “Of course, we are not doing what we did several years ago. We used to do 300 to 400 units at the show. This year, we’re doing much better than last year, but the economy is still sluggish here in Southern California, which has put a damper on sales.”
“You would think we’re in the Pacific Northwest,” noted Mike Lankford, general sales manager at McMahon’s RV, with stores Colton, Irvine and Palm Desert. “It’s been damp, cool and misty. People in California are fair weather fans, but the buyers do come out. This separates the buyers from the shoppers, which isn’t necessarily a bad deal at all,”
Despite the rain, Lankford says he’s meeting his goals for the Pomona Show. “We’ve had an even selection of interest,” said Langford, who was showing everything from entry-level towables to Monaco Class As. “Nothing has dominated. Our target was (to sell) 300 units, and we’re tracking about 250. We’ve sold about 15 diesels, 20 Class A’s and 30 C’s. The weather has circumvented some of our business we had targeted, but we are up significantly from last year. For example, on Thursday, we sold five diesels in the rain.”
“Before the rain, we were substantially ahead of last year,” added Frank DeGelas, president of Mike Thompson’s RV Super Stores, Santa Fe Springs, Calif. “And, frankly, we’re ahead of last year, despite the rain. It’s a pretty positive show, but it would have been a very good show if it hadn’t been for the rain. The buyer interest is high. The credit quality is good. I think we’re seeing all the indications of a pent-up buying demand. It will be real interesting to find out what happens this final weekend if, in fact, we get good weather.”
DeGelas, for his part, can’t ever remember rain like this, keeping in mind that there were times when torrential rains washed out the show back when it was located at Dodger Stadium. But no one can remember sustained rain like this. “This is unprecedented for California,” he noted, “and I think that if this thing were happening in Washington State, where rain is commonplace, I don’t think the rain would have hurt it so badly. Around here, we just don’t go out in the rain.”
Weather aside, DeGelas sees the cup half-full in a business sense because he sees a turnaround in Southern California. “This year is a whole different ballgame than it was a couple of years ago,” says DeGelas. What I’m trying to say is that the volume is up, but the margins are up more significantly.
“Now, I’m not saying that it’s unleashing vigorously,” he told RVBUSINESS.com. “I’m convinced it will. What will trigger it? I don’t know. You know, the local politics and economic situation are pretty tough. But, that said, we see things coming back. Our dealership is significantly ahead of last year.
“But what’s the old saying? ‘It’s hard to fall out of bed when you’re laying on the floor. So, we have no way to go but up, and we are up.”
Barring the unforseen, DeGelas says 2011 looks to be a decent year.
“For Mike Thompson, next year will be decent,” he said. “We’re now well-positioned with our product and we’re profitable — certainly not much, but profitable — and going into next year, not competing with the new and used distressed merchandise like last year, it’ll be better. The question is how much.
“One of my concerns is whether we’re in a position as an industry to ramp up next year quickly enough. You know, I’ve been doing this a number of years and I see the back end of recessions generate pretty good sales when the pent-up demand unleashes. Granted, this downturn seems different because there’s such high unemployment. But we don’t want to endure all this pain and not be positioned for the upswing when it does occur, as it will sometime. The question is when.”
When Gary and Dottie Williams ordered their MVP RV Inc. trailer in April 2009, complete with nameplates attached to the bunk beds for their grandsons, they expected to get it a month later.
They planned a cross-country road trip, but stayed in hotels instead.
When they took a vacation to the lake, they rented a trailer.
In between April 2009 and April 2010, the Moreno Valley company that was building their trailer shut down its factory like several other RV makers had done, according to The Press-Enterprise, Riverside, Calif.
While the company looked for investors and tried diversifying its business by going into the electric vehicle industry, salespeople at Giant RV showed Gary Williams other trailers. He said he couldn’t find anything comparable.
He didn’t need to. Gary and Dottie Williams picked up their finished MVP RV trailer at the Giant RV dealership in Montclair this month.
MVP RV, the Moreno Valley maker of their trailer, didn’t get the funds they needed to build electric vehicles but they found an overseas investor willing to back their RV factory.
“It’s such a great feeling to come back,” said Brad Williams recently in his Moreno Valley office. “We survived.”
Manufacturers and RV dealers are beginning to climb out of the wreckage wrought by the recession much like the industry has done early on during past business cycles when the worst appears at an end.
Would-be campers are hardly stampeding to RV dealers to purchase high-end Class A diesel motorhomes, Class C RVs or even pop-up tent trailers but they are looking, and some are even buying.
“We’re first to get hurt, and the first to recover,” said Tom Powell, CEO of Riverside-based travel trailer maker Pacific Coachworks.
In 1979, preceding the 1980 recession that lasted from January to July, RV shipments fell a staggering 48.9% to 199,200 vehicles sent to dealers.
Wholesale shipments fell another 46.2% in 1980 to 107,200 RVs. By 1981, the number picked up 24.6% to 133,600 units. Despite a recession that stretched from July 1981 into November 1982, shipments increased another 5.2% to 140,600.
With the exception of a dip in shipments in 1985, RV production increased nearly eight straight years until 1989. The recession started July 1990 lasting until March 1991. RV shipments picked up 24.6% by 1992.
With the exception of another dip in 1995, RV production grew again year over year for nearly eight straight years until 2000 when it dropped 6.6%. A recession began in March 2001, ending November. That year RV shipments dropped another 14.4%. But by 2002, it was up 21.1%
The most recent recession started December 2007.
Two popular Inland recreational vehicle makers, Weekend Warrior Inc. and National RV Inc., bowed out early on before the economy started to exhibit true signs of stress.
Fleetwood Enterprises Inc., a longtime RV industry icon based in Riverside since 1963, had managed to navigate recessions before usually emerging a stronger company after other competitors blew a tire. This time though, saddled with too much debt, the company filed for Chapter 11 bankruptcy in March 2009 selling off the motorhome division to an equity group out of New York that moved all of the company’s operations to Indiana.
Before, Southern California dealers could pick up the RVs they ordered in Riverside. Now some say they pay extra for shipping.
Elsewhere, Monaco Coach Corp. filed for bankruptcy in March 2009. Country Coach Holding Inc. was liquidated late last year.
In 2007, RV makers shipped 9.5% fewer vehicles. The number dropped another 32.9% in 2008, and continued to cascade another 30.1% in 2009 until there were just 165,000 shipped to dealers, the lowest level since 1991.
First to recover
The Recreation Vehicle Industry Association (RVIA) is expecting shipments to jump 30% this year to 215,900 vehicles.
“When things go down, the RV industry takes it in the gut,” said Joe Laing, director of marketing for El Monte RV which rents ands sells trailers. But it also seems to be one of the first to recover, he said.
Laing said El Monte RV staff noticed year-over-year sales growth since January.
“We don’t know that it means anything,” he said, hesitant to herald economic recovery based on their business. “We’re pretty optimistic that it looks like we’ve come through the worst of it.”
Frank DeGelas, owner of Mike Thompson’s RV Super Stores including locations in Colton and Cathedral City, said he dumped older inventory at a loss to clear out his dealerships for new models being released by the manufacturers who remained.
Usually the recovery after a recession is strong and fast. This one, though, is taking its time.
He sold 11 Coleman folding camping trailers in three weeks, a sign that family buyers are looking for an affordable alternative, as well as Class B motorhomes and the larger Class A diesel RVs.
“I think I’ve been helped by my competitors failing,” he said. The pie may not be any bigger, he said of the RV selling market, but he gets a bigger slice now, he said.
DeGelas credits manufacturers who spent their downtime during the downturn designing new features.
“I’ve been doing this for a long time, over 30 years, and I have never seen the amount of innovation,” he said of new models from manufacturers like Fleetwood RV Inc., now under new ownership. The Encounter, Fleetwood’s latest model, features a bunk bed that converts into a dinette.
“It’s almost like a ‘Transformer’ motorhome,” he said.
Pacific Coachworks Inc., which survived the lean times after having shut down production in the first half of 2009, developed a trailer with a slide-out outdoor kitchen and in another trailer, a slide-out queen bed.
“When things are going extraordinarily well, there’s not as much impetus to be innovative,” said Tom Powell, CEO of Pacific Coachworks.
The company has 100 employees, about half of the staff compared to its height in 2007.
Powell described new orders as solid, “but it’s not sensational” especially compared to stratospherically successful years in 2005 and 2006.
Powell said he wished more Inland RV manufacturers had survived the recession, that way suppliers would take root in the area too. As companies closed, though, so did suppliers and the cost of doing business for those who remained rose.
His company and others are now building based on orders rather than making RVs with the hope someone will eventually order it.
“I think we all learned to be a little more cautious,” he said.
After securing funding from an overseas investor, MVP RV turned the lights back on at its Moreno Valley, Calif., factory and began building trailers a few weeks ago with 55 workers, slowly paying back debts one at a time, according to the Riverside Press-Enterprise.
“Everybody is driving with their brakes on,” said CEO and President Brad Williams, referring to the calculated approach the company is taking to increase production and pay suppliers and contact dealerships.
The company isn’t currently hiring or accepting applications, he said.
On Friday (March 26), he had two pages of trailer orders on his desk.
Gary and Dottie Williams, of Hawthorne — no relation to Brad Williams — ordered the company’s Summit travel trailer in April 2009. Nearly a year later, Gary Williams still has a deposit on the trailer through Giant RV and expects it to be delivered soon.
“I didn’t mind waiting,” he said. “If you wait and it’s something you really like, it’s worth the wait.”
Williams shut down MVP RV’s plant in the middle of 2009. Lacking capital, the company first tried merging with competitors and then sought loans from banks. Neither proved successful, so the company went overseas looking for investors.
The company considered bankruptcy, but didn’t want to “go out like that,” said Roger Humeston, CFO and chief administrative officer. Humeston said he explained to investors that the RV industry was bound to “come back with a vengeance.”
While looking for funding for their RV operations, they encountered CT&T, a South Korean firm interested in making small electric vehicles in the Unites States.
The idea of MVP-EV was born. Executives of both companies announced a partnership in September that would have MVP build CT&T’s cars, but not before MVP raised investment capital to reopen the Moreno Valley plant and retrofit the facility to make electric vehicles.
Unable to secure funding, the plan to build CT&T’s vehicles has hit a “plateau,” Williams said. The agreement between the two companies doesn’t preclude CT&T from partnering with another West coast manufacturer, he said.
Giant RV, the largest RV dealership on the West Coast (second largest in the country), has become a full line Damon Motor Coach dealer.
“We are excited about the Damon lineup,” said Dick Torres, general manager of Giant RV. “They are a good fit for many reasons.”
Damon, a division of Thor Industries, added Thor Motorized Services (TMS) this past year and the new commitment to back-end support has attracted attention, according to a news release.
“Damon has always been known for a high level of quality, exceptional fit-and-finish, and a full line of Class A motorhomes. Plus their management team and programs like T.M.S. helped make it an easy decision,” Torres added.
Giant RV has three locations in Southern California according to Matt Thompson, Damon’s vice president and general manager. “They are an aggressive organization — they’ve weathered the economic downturn and are in a good position to grow,” Thompson said. “We worked hard to sign them and we’ll work even harder to make sure our products turn.”
Grand Rapids, Mich.-based Statistical Surveys Inc. ranked Camping World Inc., with 77 stores nationwide, the No. 1 dealer of motorhomes, towables and combined towables and motorhomes in the U.S. for calendar year 2008.
The Top 5 dealers in each category, for the most past, were represented by the same companies as 2007 with some changes in ranking. Crestview RV Center in Buda, Texas, was the only newcomer, moving to fifth spot in the trailer group.
The top five retailers in trailers, motorhomes and combined categories for 2008 are:
• Combined trailers and motorhomes: Camping World, Lincolnshire, Ill.; General RV Center, Detroit, Mich.; Lazydays RV Center Inc., Seffner, Fla.; Fun Time RV Sales, Keene, Texas; Giant RV Montclair, Calif.
• Motorhomes: Camping World, Lazydays, General RV, Giant RV, Mike Thompsons RV, Santa Fe Springs, Calif.
• Trailers: Camping World, General RV, Fun Time RV, Giant RV, Crestview RV Center.