Nobody’s harder to catch for an interview than 32-year-old Marcus A. Lemonis, the Chicago executive who serves as president and CEO of both FreedomRoads Holding Co. LLC, Lincolnshire, Ill., which owns and operates 58 RV retail locations in 22 states, and Camping World Inc., a 57-store chain of aftermarket parts and accessories outlets headquartered in Bowling Green, Ky.
That’s just the basic nature of Lemonis, a hard-driving individual with a Type A personality who operates out of a modern north suburban office complex not far from the shores of Lake Michigan.
Yet, most would agree, Lemonis is a guy who’s worth listening to because no one individual has more directly affected the retail recreational vehicle marketplace in years than him. A former AutoNation USA exec who grew up in Miami and graduated from Marquette University, Lemonis oversees a 3-year-old, 2,500-employee FreedomRoads business unit that accounts for roughly 9% of the U.S. retail RV marketplace – more than 37,000 units in 2006. And since assuming the head job at 1,500-employee Camping World a few months ago, he also manages the leading source of RV parts and accessories.
Total anticipated sales for the two companies are about $1.6 billion. FreedomRoads, which operates a wide-ranging RVs.com website and had an active role this year as a sponsor on the NASCAR circuit, accounts for about $1.3 billion of those revenues – doing a majority of its business with Thor Industries Inc., Winnebago Industries Inc., Fleetwood Enterprises Inc., Coachmen Industries Inc., Jayco Inc. and Forest River Inc.
As most in this industry are well aware, both of those companies are separately owned by Connecticut businessman Stephen Adams, who serves among other things as chairman of Affinity Group Inc. (AGI), a Ventura, Calif.-based membership marketing company that owns Camping World. AGI also operates the Good Sam Club and Coast to Coast Resorts, among other subsidiaries, and publishes an array of magazines in the RV and marine sectors, including RV Business.
Here’s the highlights of what Lemonis had to say in a fast-paced interview with RVB Publisher Sherman Goldenberg at his spacious third-floor, 14-employee, north shore Chicago office.

RVB: Tell us, if you would, about your original vision in starting this company in March of 2003?
Lemonis: The vision was trying to create an RV dealer platform that really allowed us to be the market leader in the top 50 basic trade areas. That was it at the time – not really a consolidation play.
RVB: How many actual transactions have occurred since the inception of FreedomRoads in order to assemble your current 58-store network?
Lemonis: Twenty-nine transactions over a period of three years, the bulk of them in the first two years. The pace of acquisition from May 2005 ‘til now has been nowhere close to the pace that existed from March of 2003 to May of 2005. That was by design.
We always knew that in order for the financial community and the industry and other potential sellers to take this concept seriously, reaching critical mass in quality, size and market dominance was essential.
The idea was to gain an edge over competitors with the same type of vision in our efforts to acquire the best dealers in the markets we are in today. If you look at markets like Akron, Ohio; or Salt Lake City, Utah; or Pensacola, Fla.; we know that we clearly have not only the best stores, but the best management teams, not by a little, but by a lot.
RVB: Again, looking back, your management team has changed somewhat since FreedomRoads was launched. What, in particular, is behind that?
Lemonis: Part of the shift has been driven by our desire to continue to flatten out the cost structure of the organization. Even though the organization has gotten bigger, we really want to keep the cost above the store level very flat. Of the three drivers from the divisional standpoint, two of them have been here since the beginning – Craig (Jensen) and Randy (Thompson). Martin (Zonnenberg) is a new addition, and Martin was put into that role when Al Binford (in Florida) retired. Beyond that, there were some relationships that didn’t necessarily fit.
What I’m most pleased about, separate from the sellers (dealers) who took the money off the table, is the consistency and retention of the general managers and the service managers we’ve been able to keep over the last three years.
RVB: Is FreedomRoads still acquisitive?
Lemonis: Yes. There’s not an end goal. There’s not some point that we say, ‘We’re done.’ We believe our philosophy remains the same. It’s just that there is a substantial market with the quality dealerships with the ability to integrate into the platform that we have and accept the philosophy on which we operate.
There really is no limit to the markets that we will identify – whether that’s having seven more stores in California or four more stores in Michigan or a store in Iowa or something in Montana – as long as the fundamentals that we talked about are met.
We have typically shied away from retail stores that have revenue of less than $18 million, but have acquired dealerships with single-store revenue as high as $75 million and multiple store chains owned by the same entrepreneur with revenue as high as $140 million. What that goes to show you is that there really isn’t a secret recipe in identifying them, in what we pay for them and in what markets they are in. If the dealership has good fundamentals and philosophically operates consistent with the way we operate – if it’s got good product lines and a state-of-the-art facility with appropriate service and parts facilities – it’s usually identified (as an acquisition target).
RVB: When you buy these stores, are you paying a premium for them in your view?
Lemonis: A significant premium. We pay a larger premium than any other buyer in the marketplace will acknowledge. And, more importantly, contrary to other potential buyers who have surfaced to this date, we truly established not only a benchmark for doing the transaction, but we started to give sellers – whether they sell to us or somebody else in the future – real value in their company that may not have existed three years ago. In fact, FreedomRoads, if it has done anything for the industry, has put a lot of value into what these individual dealers have built.
So, even dealers who look at FreedomRoads as a nemesis, if they are operating in a good market and are operating a good business with good fundamentals, can rest assured that the value of their business does come with a significant premium, which could not be established three years ago.
RVB: Are you ordinarily buying dealerships in which you hope to retain the services of the principles?
Lemonis: In more cases than not, we would prefer that the management team stay as opposed to leave. Whether or not the owner is the manager, we want the operator and the sales manager and the service folks – the people who are running the business – to stay there.
RVB: So, in the final analysis, what you’re telling us is that there isn’t a typical FreedomRoads acquisition?
Lemonis: A typical FreedomRoads acquisition is one that has high profit margin, good inventory management, a good-to-great facility in a good-to-great market with better than average product lines that also has the ability to have a Camping World put in their store. If I was a dealer today and I wanted to know if I was a candidate, those are the questions I would ask myself.
RVB: Now that you’ve brought that up, what role does Camping World play in all of this, now that you’ve assumed direct management of that Kentucky-based chain?
Lemonis: Again, potential acquisitions become even more attractive when we know that we can insert a Camping World store. That is a big piece of our strategy. If we went into a mid-size market that wasn’t necessarily a high priority for us, but we identify a solid operation where the fundamentals are met with no Camping World stores in the area, it would make the market all that much more attractive to us. In other words, what you’ve done is you’ve created a real (regional) RV marketplace in that city, using those two key brands.
We know, without a doubt, that adding a Camping World to an already strong and solid dealership results in two things: It adds credibility in the local market to the Camping World brand when it associates with a well-established, 20- or 30-year-old dealer. And it establishes the local dealer as the dealer of choice when Camping World, a 40-year-old company, acknowledges that dealer as the dealer of choice. We believe that the consumer then recognizes both of those brands as the nucleus in that town.
RVB: Many people watching the joint management of FreedomRoads and Camping World wonder whether Camping World stores are to be aligned exclusively with FreedomRoads dealerships in the future?
Lemonis: Well, most people know the Camping World brand is not exclusive to FreedomRoads dealerships. There are other great partners – Lazy Days, Beaudry, Guaranty, Alpin Haus, Venture Out, Thompson, etc. But because of the common ownership between the two companies, it does make sense that FreedomRoads play a more active role in getting Camping World in more markets than it may have been in in the past. And it does makes sense for Camping World, a well known brand, to be linked with FreedomRoads dealerships. We hope that that dealership, already successful in its own right, may reach some new level of success.
RVB: So, in terms of the future, will there still be independent Camping World stores – separate from FreedomRoads?
Lemonis: In markets that all parties identify as good Camping World markets, if Freedom Roads does not have a dealership in that market – or does not plan to have one in that market – Camping World is not prohibited from exploring opportunities with other dealers, as it has in this current year.
RVB: What can you tell us about growth plans for Camping World?
Lemonis: We have opened 13 new (Camping World) locations in 2006 and are expecting that Camping World, which had 32 stores three years ago, will have more than 75 – and potentially 80 – outlets by the end of 2007.
We hope, whenever possible, to not have a FreedomRoads location that doesn’t have some Camping World presence, in either the form of a supercenter or a smaller concept that we are establishing this year, which is Camping World Express. That will be a smaller square footage ranging between 3,500 and 6,000 square feet, versus 7,500 to 12,000 square feet in a typical store.
RVB: And what, in terms of growth, do you project for FreedomRoads?
Lemonis: We are dissatisfied today, significantly dissatisfied, with the number of units that we are selling in relationship to the total number of retail transactions that go on in the country. The company will retail somewhere between 37,000 and 38,000 units in 2006 in addition to an unspecified number of used units – a number thought to be close to one-to-one, new to used – and we hope to double that number. We currently are 9% of all RVs sold, and we’d like to be 20% of the marketplace.
RVB: We assume you’re looking for growth in both same-store and new-store sales?
Lemonis: We’d like to do two things: We would like to bring more first-time buyers to the marketplace that maybe the RV industry could use. And we’d like to grow our market share in specific markets, and in that particular order.
RVB: You’ve been open about the fact that FreedomRoads has been purchasing some private labeled products.
Lemonis: I don’t know if I would call it a private label program as much as I would say that in certain cases we have looked to manufacturers to do special runs of niche products that we thought we could move the market on. The RV industry really needs to continue to focus on what shifts the market is telling us we need to make when gas prices and interest rates go up or down.
As they move up or down, the installed (consumer) community is not exiting the industry. The curious buyer is not walking away. But our ability to provide for both their economic constraints and their emotional desires is strongly driven by our product offering. In a market where we see gasoline prices and interest rates moving north, and our wholesale prices from our manufacturers moving north, that’s a triple threat.
As a company, if we want to continue to drive market share and grab first-time buyers, then we need to put a product offering in front of the customer that we believe fits into people’s socio and economic mindsets today and not try to sell them a product that we hope they want or that we are willing to take a smaller margin on just to try to satisfy some demand.
So when we establish special runs of towables or Class C’s or whatever it may be, we do that not because we want to buck the trend of what manufacturers are allowing us or not allowing us to have, but we want to make sure we are satisfying demand about what consumers are telling us they want to buy. So, earlier this year, you saw us take an aggressive stance.
RVB: How much private labeling are you doing?
Lemonis: Less than 5% of our business.
RVB: And what manufacturers are you working with?
Lemonis: A number of manufacturers. And even for the ones we are doing it with, I’m sure that those manufacturers, if approached by any dealer who wanted to buy 3,000 or 4,000 of anything, would do the same. There’s no secret about what makes manufacturers build these units. It’s sheer numbers.
RVB: What are the greatest challenges FreedomRoads is facing today?
Lemonis: I would say that we are more than pleased with how the sellers have integrated into our business and how particular dealerships have integrated into the model, and, I must say, we are focused on making human capital our largest concern.
At the same time, we are learning, as we thought we would, that finding people to operate these businesses is the hardest part. It’s the challenge that we wake up every day wondering about. We’ve been very pleased with our ability to promote from within. We have yet to really go outside of the businesses that we acquired to find new people to run these stores. At some point in the future, I think we are going to have to build a bench strength from outside the stores that we bought.
RVB: So, finding qualified people is one of your biggest challenges?
Lemonis: Yes, when you look at the success that we’ve had, we’ve obviously recognized double-digit same-store sales growth, earnings growth and market share improvement in a lot of markets. But we still come back to the same dilemma: We need to continue to find people who can really raise the level of energy and sophistication in our business. We need to train people. That’s our biggest challenge. We’ve got to get better at growing our own people and attracting new people.
That’s the flaw in the model. It always has been; it always will be. Any company that’s got exponential growth plans needs to have a pretty strong bench to go by. And that’s the piece that today – just as it was in 2003 – is the Achilles heel because people make the difference.
RVB: What do you see for the industry in general during the year ahead, given the general softness in several market categories?
Lemonis: We believe, as we are forecasting for our business, that the market is going to stay relatively flat to where it is at today – not to where it was flat in 2005. We don’t see anything as it relates to the overall economy that points to anything changing any time soon. We do believe that interest rates won’t drop, but will settle and provide some level of comfort and remove some level of uncertainty for consumers.
I still remind everybody that the numbers we are experiencing today are some of the best years that the RV industry has ever seen. Unfortunately, some dealers – some with us, some without – during the heydays of ‘04 and ‘05 created a fixed cost structure that requires double-digit sales growth. But things haven’t worked out that way, and profit expectations are lower than they would have liked to have seen.
RVB: Did they forgot that the recreational vehicle business, not unlike marine and some others, is cyclical?
Lemonis: We all forgot it. We all became victims of our own press. Those dealers who have been in business 20 or 30 years who knew what fundamentals needed to be in place and what mistakes not to make – even when business was robust – are the ones who are shining today.
But our strategy isn’t any different than it was three years ago. We want to continue to have good, organic growth – at times, perhaps, by building our own stores, but more often by continuing to acquire good solid partners. Our goal to sell 20% of the new RVs sold in this country is a very real target for us. This company getting to two and a half billion or three billion dollars in sales is absolutely realistic because the financial capital is plentiful. The barrier that prevents us from getting to that level isn’t financial capital. It’s human capital.
RVB: Will the next growth level include going public?
Lemonis: I did not say that. FreedomRoads has no need, in its current form, to take the company public. Today, I’m focused on one thing – managing the dealership business and managing the Camping World business. That’s my sole focus.