Camping World said the opening of its first Gander Outdoors locations are off to a good start. Officials also estimated that its overall Outdoor and Active Sports business segment–also including Overton’s, TheHouse.com, Uncle Dan’s, W82 and Erehwon–will bring in $400 million in revenue in 2018.
All of those businesses were acquired over the last year by Camping World, best known for its Camping World stores catering to RV owners, to “give us access to a more diverse base of outdoor lifestyle consumers,” according to Marcus Lemonis, chairman and CEO of Camping World, on his company’s fourth-quarter conference call with analysts.
Lemonis said the first Gander Outdoor store opened in December, and there are currently 11 in operation. Said Lemonis, “Early trends in these stores have been very promising and we’re seeing healthy early conversion rates of Gander customers store Good Sam Club and our Good Sam credit card.”
Lemonis has long said that the acquisitions particularly enable the company to sell its Good Sam services business, which includes selling club memberships, credit card services, warranty insurance, repair and other aftermarket services, to a wider array of outdoor enthusiasts.
Said Lemonis on the conference call, ”Our goal is not just to sell the products that we carry in stores and online, but to grow our customer file, expand our base of Good Sam Club members and then cross-sell a broad array of products and services into a growing and increasing base of customers and Good Sam Club members. That has always been our business model and it will continue to be as we continue to diversify.”
Sam’s Club has added more discounts on fishing trips and outdoor apparel and hunting apparel to its program as part of that effort. Given the promising early signings at the Gander Outdoor locations, Lemonis said Camping World overall could see growth inside Good Sam Club in the 10 percent to 12 percent range, which is significantly higher than its historical growth rate.
Camping World acquired rights to the leases of Gander Mountain, which has since undergone a name change to Gander Outdoors, in bankruptcy court in May 2017. While lease re-negotiations are continuing, the plan is to open nearly 72 Gander Outdoors stores by mid-June.
Said Lemonis, “As I’ve said many times, we’re being very calculated and disciplined in how we open stores, and how we manage this business. We are only interested in operating stores that we believe have a clear path to profitability. We’ve aggressively negotiated rents, diversified the mix of merchandise, added a service department and layered out on a number of new benefits and savings to our Good Sam Club for the Gander Outdoors and Overton’s customers.”
Asked in the Q&A session about the merchandise mix at the Gander Oudoor’s locations, Lemonis said the new Gander box now averages around 40,000 square feet, down from 100,000 square feet previously. The former Gander Mountain concept was also more heavily focused on hunt while the new concept is split between hunt, marine and outdoor lifestyle.
Explained Lemonis, “So, historically, Gander was skewed, hunting and apparel. And what we’ve done now and the team has done remarkably market-by-market is to literally split the pie into three pieces, a massive fishing in marine store by using our historical Overton’s database and data on sales. Big fishing department’s live bait, I mean, all the things that you could think of to directly compete with a company that did this, that used to be public. That is our target audience in that regard. The second pie is really understanding that active lifestyle customer, that younger customer, hiking, biking, kayaking, paddle boarding, our skateboarding, skiing, snowboarding, all of those things that are more active sports and it’s merchandised appropriately for the market. As part of our House acquisition, TheHouse.com, we acquired a bike manufacturer that was inside of their company. And so we’re obviously going to be driving our own bikes, vertical bikes called Framed, through our distribution model. And then the last, easy historical Gander business, which was archery, hunting, the firearms, all the things that are inside of there, but the historical Gander business is really significantly less than it used to be, because we want to be a marine superstar and an active lifestyle superstar as well.”
Asked by an analyst about the overall opportunity with the Outdoors and Active businesses, Lemonis said that in a sense Camping World’s model has ”become a four-legged stool.”
The “strongest leg is our RV business; that’s what brought us to the dance and that is our number-one focus.”
The second is Gander Outdoors, which is “sort of everything Outdoors,” and then Overton’s, which is “everything marine and fishing.” Lemonis added, “Overton’s is a very key component because we see a lot of similarities between the marine consumer and the RV consumer and what an appetite is for Good Sam products.”
Finally, the fourth is Active Sports, which includes Thehouse.com, W82, Erehwon and Uncle Dan’s.
Said Lemonis, “We believe that there is an opportunity to move people through the funnel. And those four legs on the stores have one sole purpose, and that’s taking care of the seat that the person sits on that stool. And that lid, that seat is a Good Sam Club. Every one of those individual legs on the stool has a singular purpose, be profitable, have growth and drive membership in a valuable way to the consumer and grow the file. And I really believe that if we can take the current Good Sam member and future Good Sam members, and give them this 360-degree seat that allows them to dip into any of those legs and receive value discounts benefits, exclusive benefits, free shipping, whatever it may be that we were to going to start to attract a larger pool to our entire company base.”
Lemonis also said Camping World may make further similar acquisitions “that make those legs of the stools stronger. Anything that is accretive to the shareholders that add value to the Good Sam customer, and that lay nicely into what we are doing, will be our strategy. Digital is an important part of our business and acquiring the House, and acquiring Overton’s, taught us so much about the opportunity at Camping World. And we’ve seen a nice growth at campingworld.com, just scratching the surface. And so we’re going to continue to look for digital opportunities in that regard as well.”
Photo courtesy Camping World