As Baby Boomers start to retire, Lazydays RV Center in Seffner, Fla., ought to be entering its glory days.
Instead, Lazydays, which bills itself as the world’s largest recreational vehicle dealer on one site, finds itself scrambling to survive the recession, according to the Tampa Tribune.
The company faces a trifecta of challenges:
- It missed an interest payment to its bondholders in November, meaning it could be held in default at any time.
- It is losing millions of dollars as would-be customers are sitting tight instead of buying RVs.
- Three of its suppliers, Monaco Coach Corp., Fleetwood Enterprises Inc. and Country Coach Inc., have sought bankruptcy protection this year.
The most immediate threat may be Lazydays’ bondholders will declare the company in default, although they have held off so far. In such a case, the company could be forced to file for bankruptcy protection.
“Our belief is that we will reach an agreement with our bondholders,” company CFO Randy Lay said this week.
In its most recent financial report, Lazydays announced it lost $6.3 million in the quarter ended Sept. 30. That compares to a loss of $2.1 million in the same quarter of 2007. Revenues fell to $90.1 million in the quarter ended Sept. 30, down from $152.2 million in the same quarter a year earlier.
To reduce costs, the company has cut about a third of its payroll over the past year. So far this year, Lazydays has laid off about 30 people on top of 185 layoffs last year, Lay said. It still has about 470 employees, he said.
The bankruptcies of Fleetwood, Monaco and Country Coach could hurt if they close their RV manufacturing divisions. A search of Lazydays’ website shows about one in five new RVs at Lazydays comes from those three manufacturers.
A spokeswoman for one of the companies, Fleetwood, said it is reorganizing in bankruptcy protection and expects to keep supplyiong motorhomes to its dealers.
Lazydays was founded in 1976 by local businessman Don Wallace. He and his ownership group sold a majority of the company to private equity firm Bruckmann, Rosser, Sherrill & Co. of New York in 2004 for $206 million. Wallace kept a minority stake.