Lincolnshire, Illinois-based Camping World Holdings, one of the largest companies in the recreational vehicle/camping sector, has abruptly closed 37 store locations and laid off an unknown number of employees, likely to be in the hundreds.
According to a Securities and Exchange Commission filing, the Board of Directors have approved a plan to strategically shift its business away from locations where the Company does not have the ability or where it is not feasible to sell and/or service recreational vehicles. The Company is in the early stages of evaluating the impact of the Plan and has had preliminary discussions regarding the sale, repurposing, relocation or closing of certain locations, with the current expectation of either selling, repurposing relocating or closing approximately 27 to 37 Outdoor Lifestyle Locations. The actual number of stores the Company sells, repurposes, relocates, or closes may change. As part of the Plan, the Company is also evaluating the impact on the Company’s supporting infrastructure and operations. For instance, the Company is in the process of rationalizing inventory levels and composition, as well as warehousing and distribution resources. The Company will have a reduction of headcount and labor costs for those locations that are sold or closed and the Company expects to incur material charges associated with the activities contemplated under the Plan, with the majority of those activities currently expected to be completed by December 31, 2019.
The company is headed by celebrity investor Marcus Lemonis whose CNBC program “The Profit” features investment opportunities for Lemonis to invest his own money in turnaround situation. His favorite saying is that once you get the “people, process, and product’ right, you are a step closer to success. According to Lemonis, “We believe the sale and/or servicing of recreational vehicles is our core and most important offering and, with the RV and outdoor consumer crossover, we believe there is an opportunity to continue growing our market share and improve our financial performance through the operation of locations with RV sales and/or service and, when feasible, our hunting, fishing and camping products. We will continue to operate our RV sales and/or service locations under three banners: Camping World, Gander RV and Outdoors, and Gander RV.”
The company initiated a restructuring effort in January 2019 when Lemonis commented, “Our 2019 focus will be to better serve our customers, associates and shareholders while continuing to expand our RV market share with opportunistic RV acquisitions and completing the rollout of RV dealerships into newly opened retail locations. We will also have an intense focus on dramatically reducing our retail inventory levels and aggressively reducing capital expenditures to maximize and drive free cash flow. As previously indicated, we will not hesitate to close underperforming locations, and we have recently closed four unprofitable RV dealership locations in addition to eight retail locations that we felt would not be accretive long term.”
It appears that a number of private equity firms are involved and may be pressuring Lemonis and the Board to drastically cut costs, including headcounts.
Change is coming. There will always be a tomorrow, no matter how much you may try to ignore it. There are no guarantees in life, or promises for a bright future. Just because something bad hasn't happened yet, doesn't mean it won't. It can happen to anyone, anytime, anywhere. No one is guaranteed to wake up tomorrow and still have a job by evening. Are you now wondering, Am I Next?