Hot Tub Forum
Original => Hot Tub Forum => Topic started by: Hot Tub Ryan on December 08, 2008, 07:10:58 pm
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Hi everyone. I work in the industry and I lurk here from time to time to see what consumers are saying and how other dealers are doing. I finally registered today because a friend of my sent me a New York Times article with an interesting blurb about Jacuzzi in it and I wanted to get everyones take. I know there are a lot of Jacuzzi guys here too.
The article mostly focuses on Apollo Group (the company that owns Jacuzzi), it's management and business practices but this is the blurb that caught my attention...
"It acquired a broad range of companies — cruise lines, paper companies and grocery store chains. Mr. Black allows that five of those companies are “cyclically challenged.” Those five are the hot-tub manufacturer Jacuzzi; the accessories retailer Claire’s; Realogy (which owns Century 21 and Coldwell Banker) and the Countrywide real estate firm in Britain; and a gambling company, Harrah’s. WHILE Mr. Black remains upbeat about the prospects for those companies, some analysts say most of them are severely indebted and are crumbling quickly because of the economy.
It's actually a pretty fascinating article. You should read the whole thing and tell us what you think. Here's a link.
http://www.nytimes.com/2008/12/07/business/07leon.html?_r=1&scp=1&sq=apollo%20jacuzzi&st=cse
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It's ironic that everyone has been worried about the financial stability of the smaller, privately owned factories however, many of them may be better suited to ride this out then some of the mega conglomerates just because of banking.
Any way you look at it we're in a pretty good storm....
Casey Loyd said something to me at the show after hours that I thought was very poignant....He said "everyone in our industry is feeling the crunch but we're all in this together and those of us that keep our heads and don't overreact will make it through together"
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wow that was an interesting read.....
scary stuff for the companies involved...pretty sad really when
these investment guys buy a company and saddle it with huge debt
i would think even if Jacuzzi was to "go under" with these Wall Street
managers.... such a well known brand as Jacuzzi would bounce back in some form.
hopefully things will turn around or maybe this guy will spin off Jacuzzi to a new better owner
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I recently read in Pool & Spa Marketing (a canadian Industry mag) That Jacuzzi Brands just signed a big licensing deal with Global Icons to expand the brand into more backyard leisure products. As the said they want make the company a one stop shopping experience for spa buyers. Which my take is they are going to slap there name on everything they can think of. So with that move I dont think they are in too much trouble. But who knows???
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Even if this Apollo holding co. decided to slice Sundance/Jacuzzi away, the brand has too much history and name recognition to have it just vanish. Some other entity would buy it.
It might be a confusing bumpy ride for a while for them, but Sundance/Jacuzzi will still be a player in the long run.
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i would think even if Jacuzzi was to "go under" with these Wall Street
managers.... such a well known brand as Jacuzzi would bounce back in some form.
I never thought we would see a huge name like Mervyn's go away. They were much bigger than Jacuzzi. These are crazy times for sure...
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"I never thought we would see a huge name like Mervyn's go away.
They were much bigger than Jacuzzi. These are crazy times for sure."
Ryan I agree in some ways, hell we may see Chrysler go away......
I hope the Jacuzzi brand survives this wall street nightmare....the
difference could be that Jacuzzi/Sundance are offering a top
quality product where I'm not sure a Chrysler is?
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I wonder if Watkins/Masco would be interested.... ::)
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I recently read in Pool & Spa Marketing (a canadian Industry mag) That Jacuzzi Brands just signed a big licensing deal with Global Icons to expand the brand into more backyard leisure products. As the said they want make the company a one stop shopping experience for spa buyers. Which my take is they are going to slap there name on everything they can think of. So with that move I dont think they are in too much trouble. But who knows???
They have been trying to do that for years.
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I wonder if Watkins/Masco would be interested.... ::)
If anything happened I'm sure Living Waters would step in and buy the name to go with their Lazyboy and Coleman brands LOL!!! ;D ;D ;D ;D
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I have watched Watkins buy another brand. That one wasn't in financial trouble - or if it was, it was not publicly known. Since then, they have already added a new name of their own - Limelight spas - so I doubt there would be any interest in buying up a bunch of debt.
Just my opinion.
8-)
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Interesting
I brought this up a month ago on this thread http://www.whatsthebest-hottub.com/cgi-bin/yabb/YaBB.pl?num=1226263540
I did buy the Sundance and took delivery yesterday. Hopefully if they do go belly up the dealer wont (like them a lot and they have been carrying SD for years) and we'll still be able to get it fixed and under warranty. Who knows. Many of you said there was no way Jacuzzi and SD would be going under. This is an economy like no other for sure!
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A very interesting and scary article, I think a lot of it is speculation, but none the less its a concern. I emailed the link to a few so will see if anything comes up. This Mr Black doesn't sound to worried though? I am guessing his pockets are very deep,but its up to him where he wants to spend his money?
Jacuzzi and Sundance are strong enough to survive and if sold off someone would pick them up, debt or not, its a bit different industry then Linen and things.
Who knows in the end. There will always be other lines available to sell, but I really think things will be alright.
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I have watched Watkins buy another brand. That one wasn't in financial trouble - or if it was, it was not publicly known. Since then, they have already added a new name of their own - Limelight spas - so I doubt there would be any interest in buying up a bunch of debt.
Just my opinion.
8-)
Companies have been known to buy other companies just to shut them down. Or, they could buy them and just let them run independent of one another.
Doubt either case would happen. Since we're all speculating, I thought I'd join in. ::)
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Companies have been known to buy other companies just to shut them down. Or, they could buy them and just let them run independent of one another.
Doubt either case would happen. Since we're all speculating, I thought I'd join in. ::)
I could see that happening to dynasty,LA spas a few others I cant think of, but to let a name like Jacuzzi or Sundance go down just to get rid of them wouldn't make any sense,not to mention what you'd have to pay to acquire them .
After I win the 170 million mega millions this week I am not going to worry anyway! Of course I am just speculating ;D
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Interesting
I brought this up a month ago on this thread http://www.whatsthebest-hottub.com/cgi-bin/yabb/YaBB.pl?num=1226263540
I did buy the Sundance and took delivery yesterday. Hopefully if they do go belly up the dealer wont (like them a lot and they have been carrying SD for years) and we'll still be able to get it fixed and under warranty. Who knows. Many of you said there was no way Jacuzzi and SD would be going under. This is an economy like no other for sure!
The product is warranted by the manufacture not the dealer so in reality if a manufacturer goes under the warranty is gone with it even if the dealer stays on and takes on another product but this is like talking “in theory” I have to imagine. Despite the very serious times we're in I have trouble seeing this really going the gloom and doom direction. When is this all going to bottom out??
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Jacuzzi and Sundance are strong enough to survive and if sold off someone would pick them up, debt or not, its a bit different industry then Linen and things.
I don't think anyone would purchase a business that's saddled in debt in an industry that's down 50% right now. I think the only way Jacuzzi changes hands is if they are forced to liquidate assets under bankruptcy in order to pay back thier creditors.
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I'll never ever forget when a spa mfg. that I was selling went out of business. I had consumers arguing with me left and right why I should warranty the spa!
We're not talking a pressure switch or jet here and there. Major mechanical issues and intense leaks.
Letters from attorneys, swearing on the phone....what a nightmare.
On top of all that, the mfg. owed ME over $30K in warranty re-inbursments (parts & labor) and spas that I had returned for them to fix, I never saw those again!
I was buying the parts direct from OEM's to fix consumers spas to keep consumers happy, then trying to get re-inbursed for the parts cost, never happened!
So, no, don't expect your dealer to warranty a spa per the spa mfg's warranty.
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I don't think anyone would purchase a business that's saddled in debt in an industry that's down 50% right now. I think the only way Jacuzzi changes hands is if they are forced to liquidate assets under bankruptcy in order to pay back thier creditors.
I am not so sure the industry is down 50%, not that I know! I think it varies depending where you live. We actually are only down 5% from last years totals. From what I heard in Vegas most were saying 20 to 30%. I am more or less asking not telling.
Hot Tub Ryan, if you don't mind tell us a little about yourself.
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Hot tub Ryan, who laid you off, Sundance or jacuzzi..
I didnt see anywhere in the article that you posted the words "going under"...
Since you are in the industry as you say, you may not want to attach a copy of this thread you started to your next application..
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does this nutcase Mr Black own the entire Jacuzzi brand?...Like the
residential bathtubs and showers or is the spa division a different
entity with a different owner?
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I guess he does mind??
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I am not so sure the industry is down 50%, not that I know! I think it varies depending where you live. We actually are only down 5% from last years totals. From what I heard in Vegas most were saying 20 to 30%. I am more or less asking not telling.
Hot Tub Ryan, if you don't mind tell us a little about yourself.
I'm in my mid 30's. I sell Hot Spring in California and I have been doing so for 3 years. I'm a Scorpio . I like long walks on the beach... Let me know if I left anything out. ;)
At our store we are probably down 5-10% from a year ago as well. As far as I know the industry is down about 50% from it's peak in 2000. I tried to find some hard data for you but the only thing I could come up with was a stat in "Spa Retailer" (Winter 2008) that said Big box unit sales were down to 23,000 units in 2007 from their peak of 46,000 in 2000. Big box certainly doesn't speak for the entire industry but it's the only thing I could find.
I hope my brand affiliation doesn't discredit the New York Times. I didn't want this thread to be about brand x vs. brand y. For the record I think it would be bad for the industry as a whole to lose Jacuzzi and Sundance. The top brands legitimize each other. I hope Apollo pulls it together and gets Jacuzzi back in the green.
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Hot tub Ryan, who laid you off, Sundance or jacuzzi..
I didnt see anywhere in the article that you posted the words "going under"...
Since you are in the industry as you say, you may not want to attach a copy of this thread you started to your next application..
Wow. lol. I'm not going to get into a flame war with you but in my defense the New York times did report "some analysts say most of them (speaking of Jacuzzi and four other companies) are severely indebted and are crumbling quickly because of the economy." I don't think the thread title is unfair but the forum moderators can change it if they disagree.
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I'm in my mid 30's. I sell Hot Spring in California and I have been doing so for 3 years. I'm a Scorpio . I like long walks on the beach... Let me know if I left anything out. ;)
I get the picture you live in California, like long walks and you sell Hotspring spas. So what your saying is your -ay?
I kid I kid ;D :-[ ??
Welcome to the forum! While I dont like what you posted for your 2nd post ever here,because basically anyone interested in buying a Jacuzzi or Sundance (or have already bought and are now worried to death they wont be covered) and looking for info here probably wont buy one now (just saying) On the other hand I am not worried about it, if they go down they go down, a sad day that will be. I honestly don't think they will, they have to much going on but who knows with this goofy economy. On the other other hand its the media and they are only interested in bad news, not to mention how they would know if Jacuzzi and Sundance or those other company's are really in serious debt, unless they have access to their books or they are just assuming and we all know what that means.
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Thanks for the warm welcome... and the assault on my manhood ;D
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I never thought we would see a huge name like Mervyn's go away. They were much bigger than Jacuzzi. These are crazy times for sure...
I personally have never heard of "Mervyn's" but I take it they may have been some type of storefront? That is SIGNIFICANTLY different than a "brand name" like Jacuzzi which is recognized around the world by EVERYBODY. Was Mervyn's some local retailer?
So Apollo also own ALL the Century 21 and Coldwell Banker franchises as well as Tyco and Harrah's entertainment? We aren't talking about some mumbo-jumbo Investment Banking firm here, we are talking about a HUGE conglomerate. Haven't you heard that in times of financial crisis more lottery tickets are sold than at any other time? Harrah's is a gambling business and business is likely booming.
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"Harrah's is a gambling business and business is likely booming"
I hear casinos are hurting and not "booming" as far as revenues.
I have a very close friend that has been a dealer for years and he just
left the industry, he said the number of gamblers/tourist in Vegas is
way down. There is construction going on in Vegas but almost all of it
was started before the economic downturn.
http://www.npr.org/templates/story/story.php?storyId=98015137
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With Sundance's current sales event, "No interest and no payments until 2010! "...what happens if they go under before your first payment is due? :D
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With Sundance's current sales event, "No interest and no payments until 2010! "...what happens if they go under before your first payment is due? :D
You are financing with GE. It is a good question. As a consumer, you have leverage given issues with warranty.
The other entity with a relationship to the deal is the dealer. Sundance has nothing to do with the financing. If a consumer had a warranty issue that could not be resolved, GE would put the burden on the dealer.
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If you finance a spa, you are taking out a loan. If you default because of a warranty issue, you have still defaulted on a loan, and your credit suffers accordingly. If the company goes out of business, you still owe on the loan, warranty or not, working tub or not.
Now, if the finance company goes out of business - most likely they will sell the debt to somebody else who will still expect to be paid.
No fun.
8-)
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Is it the same if say you die?? Do they collect from the estate or siblings??
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Here is some scary stuff:
http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/index.html
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Is it the same if say you die?? Do they collect from the estate or siblings??
For the most part it, the answer is yes. Estate debts/taxes must be discharged, before remaining assets are released.
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Here is some scary stuff:
http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/index.html
Well I am glad he didn't sugar coat it!!!
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Is it the same if say you die?? Do they collect from the estate or siblings??
Yes, the state collects from the estate FIRST. If there is anything left, then it is distributed to the heirs. If there is still additional debt beyond the deceased assets, there is really little the creditors can do to collect that deficit from the heirs. The liquidation of assets is the responsibility of the executor of the deceased (to get the most $'s from those assets). When someone dies without a clear executor, the state can (and does) step in to liquidate the assets. In these cases, the deceased rarely gets a "reasonable" rate of return on such liquidated. Rather, they sell them for "whatever" (literally) the bidders (at that time) are willing to pay. This is the way that many take advantage of the system and often buy HUGE assets at literally a few pennies on the dollar. Those buyers, then re-sell them and make a LOT (at the cost of the estate and the State).
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Yes, the state collects from the estate FIRST. If there is anything left, then it is distributed to the heirs. If there is still additional debt beyond the deceased assets, there is really little the creditors can do to collect that deficit from the heirs....
This is the way that many take advantage of the system and often buy HUGE assets at literally a few pennies on the dollar. Those buyers, then re-sell them and make a LOT (at the cost of the estate and the State).
;D You are spending too much time watching infomercials. The reason that probate takes so long is that the state waits for debtors prove their case. My understanding is that the order is IRS, State, secured debts (ie spa paper), legitimate unsecured debt, and finally heirs. As far as making a LOT, the people who make the late TV infomercials peddling these schemes are the ones who make money. Many buyers watch the courts daily, and there is usually competition for anything that has tangible value. If something looks like it is selling it is for pennies on the dollar, it is usually a reason like a hot-tub that froze and would cost more to repair than it is worth.
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;D You are spending too much time watching infomercials. The reason that probate takes so long is that the state waits for debtors prove their case. My understanding is that the order is IRS, State, secured debtors (ie spa paper), legitimate unsecured debt, and finally heirs. As far as making a LOT, the people who make the late TV infomercials peddling these schemes are the ones who make money. Many buyers watch the courts daily, and there is usually competition for anything that has tangible value. If something looks like it is selling it is for pennies on the dollar, it is usually a reason like a hot-tub that froze and would cost more to repair than it is worth.
I would agree that there are a fair number of those early morning "get rich quick" scheme's being fronted out there but there is a modicum of truth in everything. Sometimes there simply aren't ANY bidders for stuff. A friend of mine was contacted by a bank because they knew he bought stuff in bulk. The estate auction in a remote area didn't bring ANY bidders. The bank told him that they would sell him a tractor trailer of "stuff" for $1000 and wanted to know if he was interested. He said "Why not" and when he opened it up it had a riding mower, two refrigerators, washer and dryer as well as about $10K worth of furniture. I think he ended up selling everything in the newspaper over about a month period for somewhere in the neighborhood of $20K. So, it is possible. It's just not that "likely" to happen that way all the time.
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I am not a spa industry expert, but do work with closely-held and family owned companies. The sad tale behind Mervyns is a common one now in larger corporate bankruptcies. A private equity firm buys a company with very little of their own money, pays themselves a massive fee for doing the deal, saddles the company with mega debt and the company goes under as a result. This scenario is about half of the major bankruptcies (Linens & Things, Mervyns, etc.) In the Mervyn case, they split off the real estate into another entity, left the operating company with the debt, raised the leases significantly and torpedoed the operating company but left themselves owning the real estate. Tough luck for the thousands of employees, the vendors, etc.
There is some merit to dealing with a privately held/family owned company. Nobody wants to be the person that sinks the family firm (e.g. who would want to be the Jacuzzi that took the firm into bankruptcy). Also, family firms have "patient capital", in that they are looking at a multi-generational perspective, not just quarterly returns. In terms of the overall economy, these family owned and "small" companies (under 300 employees) account for 70% of new jobs and 60% of GDP. Give me a company where the owner and his "kids" work there any day over a company owned by private equity looters.
By the way, the oldest family-owned business in the US is the Zildjian Cymbal Company, founded almost 400 years ago and now in it's 14th generation of family ownership. They have about 200 employees and about $50 million in sales. Maybe they would consider branching out into spas?
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isn't UPS a privately held company...mainly one family owned company?
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Trading on the NYSE
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Yeah I suppose....but a bit odd....yes a "public company" but 99% private?
In 1999 UPS raised $5.47 billion by selling 109.4 million shares of newly created Class B shares at $50 per share on the New York Stock Exchange.
The Class A shares, which controlled 99 percent of the voting rights at the company, remained in the private hands of employees and retirees.
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Hot Tub Ryan, are you related to GB & LL who worked with RC and CJ? PM me
Privately held companies are seemingly a bit more fragile than deep pocket holding companies, but they have a key ingredient needed for survival that corporate owned
Companies do not have a passion to endure economic pain needed for the survival of their company.
Corporate owned companies are controlled by the bottom line result, profit or loss. They are more apt to make a business decision to stop the bleeding.
Just a thought.