Outdoor Insight

outdoorinsightmag.com November 2018 • Outdoor Insight • 25 Carhartt workwear. Others are campers in need of an Igloo cooler, a Gregory pack or a new, private label bike. Only 15 percent of the store's assort- ment is dedicated to branded soft goods, including product from The North Face, Columbia and Carhartt. The remaining merchandise is focused on lower-margin, but in-demand hard goods such as fishing poles, guns, bicycles and tents. The assortment seems more general than what would be found in any of the five Uncle Dan's or seven Rock Creek Outfitters, two regional outdoor specialists acquired by Camping World over the last two years to provide merchandising strategy insight. The RV Lifestyle Retail Strategy Publicly traded Camping World Holdings acquired the former Gander Mountain and Overton's marine business out of bankruptcy court in May, 2017 and has subsequently sunk capital into integrating the businesses into exist- ing operations. "The primary goal behind Gander Outdoors was to find additional locations in key markets where we could sell more RVs," CWH chairman and CEO and reality TV star Marcus Lemonis told analysts in early August. "The secondary benefit is that we are finding new customers for our funnel and as that funnel gets wider, we start prospecting with people who have an affinity for the outdoors… So the story is starting to become clear that we are an outdoor company, and whether you hunt, fish, camp, whatever you do, you do it in an RV. You drive there in a RV, you stay in a RV, you do your activity and you drive back in the RV." U.S. RV shipments surpassed 500,000 units for the first time in 2017. An RV is defined as "a vehicle that combines transportation and tem- porary living quarters for travel, recreation and camping." This includes motorhomes (motorized) and towables (towed behind the family car, van or pickup). More than 11 percent of U.S. house- holds headed by 35- to 44-year olds owns an RV. versus a 9.3 percent ownership rate among those 55-and-over, according to a 2011 University of Michigan study. Meanwhile, both families with children and empty-nesters are strong potential RV buyers, as are younger, ethnically diverse consumers, according to a Harris Interactive study commissioned by the Go RVing Coalition. Yet the lack of consumer credit can limit sales of the highly discretionary purchase. Camping World is in the midst of aligning all of its outdoor businesses at both the brick-and-mortar and online levels. For example, a full assortment of RV parts and accessories will be available in all 64 Gander locations by year-end and there are plans to add RV sales to 40 Gander proper- ties, including in Paducah, KY, Fredericksburg and Roanoke, VA, and Lakeville, MN. RV sales expansion into Wisconsin, Minnesota, Texas, Michigan, Ohio, Pennsylvania, North Carolina, New York and Illinois represents nine of the top 16 RV states, according to Statistical Survey, and accounted for nearly 35 percent of all RV registra- tions in the last 12 months. Meanwhile, 35 Gander locations, where size and local restrictions prevent the addition of RV sales, will be co-branded with Camping World and include RV parts, accesso- ries and services. Overton's departments within Gander doors include an assortments of kayaks, inflatables and fishing gear. Financial Factors CWH's investments make some on Wall Street nervous, but not Lemonis. He told analysts it takes 12-18 months to "feel good" about ROI and has touted an eventual Camping World financial picture that includes $1.4 billion in annual rev- enues and $100 million of EBITDA. But Gander will generate at least a $60 million EBITDA loss in 2018 before reaching a $100 million EBITDA profit by 2020, Lemonis confirmed to analysts in August. In mid-October, a federal lawsuit seeking class- action status was filed against Camping World Holdings, alleging that Lemonis and other CWH execs misrepresented company financials. Additionally, there are currently five or six Gander Outdoors locations that may not survive beyond the holiday season if store performance does not improve, forecasted Stephens. The investment house also opines that the 35 Gander doors without RV sales "are likely to be the least profitable and have the highest likelihood of being closed." Notes Stephens' Nelson, "The ultimate goal of Gander Outdoors and Gander RV is to drive the high-margined Good Sam Club, whose members bring add-on revenues such as credit cards, insur- ance, warranties and subscriptions that contribute $100 million in annual EBITDA and provide unique hedges to a downturn." l Camping World Holdings acquired the former Gander Mountain and Overton's marine business out of bankruptcy court in May 2017 and has sunk capital into integrating the businesses into existing operations. In addition to Gander Outdoors, C a m p i n g W o r l d H o l d i n g s ' s acquisitions since Feb. 2017 have included Erehwon Mountain Outfitter, TheHouse.com, Uncle Dan's Outfitters, Rock/Creek Outfitters and more than a half dozen RV-specific retailers. What is the Plan? The primary goal behind Gander Outdoors is to find additional locations in key markets and sell more RVs, according to Camping World chairman and CEO and reality TV star Marcus Lemonis. In doing so, the retailer expects to be a draw for people who have an affinity for the outdoors. Camping World is in the midst of aligning all of its outdoor businesses at both the brick-and-mortar and online levels. A full assortment of RV parts and accessories will be available in all 64 Gander locations by year-end. Who Owns Gander Outdoors? "The primary goal behind Gander Outdoors was to find additional locations in key markets where we could sell more RVs." Chairman & CEO Marcus Lemonis

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