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Coach House Motor Homes customers are so valued that David Gerzeny, co-founder and president, insists anyone who buys a vehicle also stay the night.
Gerzeny, though, doesn't manage a roadside motel. He instead set up a secure area on the company's five-acre property in Venice for new customers. The idea is for buyers, mostly couples over 65 who spend at least $130,000 on a Coach House motor home, to check everything inside the vehicle overnight. Then they can report back on any issues in the morning.
“Understanding the operational items of the vehicle is very important,” says Gerzeny. “We are building a house on a set of wheels that will last. That's our claim to fame.”
The 50-employee company, founded in 1985, also lays claim to a two-pronged strategy that's helped it survive the recession. Revenues increased 20% in 2012, from $5 million in 2011 to $6 million, and Gerzeny projects sales will increase at least that much in 2013. Says Gerzeny: “We boxed our way out of the recession.”
It was a brutal fight: Annual sales peaked at $12 million in 2006, when the firm had 100 employees. But sales fell more than 60%, to $4.3 million, by 2009 and 2010. That's when the company made two significant shifts.
First, Coach House stopped selling motor homes through a national dealer network. The recession crushed many dealers, and Coach House, says Gerzeny, had to take back unsold inventory when several went bankrupt. The firm now sells from its factory direct to consumers. “When we made the decision to go factory direct,” says Gerzeny, “we didn't have to do as much to still get a high volume.”
The second move, also in 2010, was the formation of a quarterly employee profit-sharing plan. Gerzeny says that fostered a sense of pride in the workmanship that surpassed even what the company previously did. The profit shares are a percent of the overall net income, which includes whatever is lost from warranties that come back to the company.
“It has brought unity and a bond to Coach House,” says Gerzeny. “It gives (employees) an incentive to do things correctly.”
Recreational rebound
The rebound at Coach House mirrors an industry-wide resurgence. The number of RVs delivered to dealer lots nationwide, for example, is expected to reach a six-year high in 2013, the Recreation Vehicle Industry Association reports. The Reston, Va.-based trade group also says 2012 sales represent the third consecutive year of an increase after a recessionary bottom from 2006 to 2009. Sales dropped to levels not seen since the 1970s in those three years, the association says. But now about 8.9 million U.S. households, 8.5% of all households in the country, own RVs.
Several RV firms nationwide, in addition to Coach House, have captured the increase in business. San Diego-based La Mesa RV Center, for instance, opened a sales facility in August in the former Sarasota Bradenton International Convention Center. “Volume is very strong, and has been for the past year,” says La Mesa CFO Tim O'Connor. “Business is brisk.”
The company's 120,000-square-foot facility in the Sarasota-Bradenton market sells more than a dozen brands of new and used RVs. It's La Mesa's fourth Florida location, joining others in Fort Myers, Orlando and West Palm Beach.
The space, adds O'Connor, solves a longstanding issue for the company in Florida: Having a significant chunk of space inside, to protect against weather and sun. Says O'Connor: “We have looked for interior space in a showroom in Florida for a some time.”
Seffner-based Lazydays is also in comeback mode. Sales at the RV dealer, which filed for Chapter 11 bankruptcy in 2009, are up at least 15% this year, says CFO Randy Lay. The firm declines to release specific revenue figures. “There is some pent-up demand out there,” says Lay. “We are having a good run.”
Lay took over CEO duties last October, when John Horton, who ran the company for five years, resigned. Lay went back to the CFO role in April, when the firm named former Best Buy Executive Vice President and Chief Administrative Officer Tim Sheehan CEO. Lazydays, founded in 1976, runs a 126-acre campus with 220 service bays and a campground for 300 RVs.
'Big and brawny'
Coach House, meanwhile, targets active-lifestyle baby boomers with its line of 17 RV models. The vehicles range in cost from $130,000 to $200,000. Clients in recent years stretch from retirees to celebrities. The latter list includes actor Robert De Niro and Steve Levick, a Philadelphia investor and minority owner of the Tampa Bay Rays.
Other customers, ones still able to afford a six-figure luxury item, have bought RVs five times through the last 25 years from Coach House, says Gerzeny. “We have a lot of downsizers,” he says, “who are coming out of big monstrosities.”
Coach House builds its vehicles in a 30,000-square-foot facility just east of Interstate 75. It's a few blocks from two of the region's largest manufacturers: drinkware firm Tervis Tumbler and PGT Industries, an impact resistant window and door firm.
The Coach House process starts with a chassis, the foundation of the RV. Coach House offers customers two kinds of chassis: A Ford E-450, what it calls the “big and brawny” option, or a Mercedes 350 Diesel Sprinter, the more “refined” selection.
The next step is when Coach House technicians build a one-piece fiberglass body for the motor home. Some competitors, says Gerzeny, use up to a dozen pieces to compile a shell. “We are the only RV maker that actually constructs a one-piece RV body,” says Gerzeny. “That's where we stand alone. That's very unique in our industry.”
The one-piece Coach House shell is then reinforced with carbon fiber, which protects against leaks and rattles. Its aerodynamic design, executives say, improves fuel efficiency.
The shell is so precise and scientific, adds Gerzeny, that it's patented. It's also painted. Color choices range from mosaic blue to candy apple to sunset.
Once the shell is done, it's time for Coach House employees to play house. This is where they add a kitchen, bathroom and sleeping spaces. The kitchen includes Corian countertops, recessed stainless steel sinks and LP gas stoves. Bathrooms have a stand-up shower and a medicine cabinet, while the sleeping area has a motorized sofa bed.
After all that, finally, come the add-ons. Those can include HDTVs, surround sound, Wi-Fi, and additional heating and air-conditioning systems. Coach House, following Gerzeny's dictum to over deliver, will also customize any way it can. A recent example, says Gerzeny, is an RV where the firm installed several crates for dogs instead of a sofa bed.
The husband-wife owners, he says, sleep on the floor. Says Gerzeny: “It's like a roving veterinarian RV.”
'Hipster' entrepreneurs
The son of an auto dealer, Gerzeny grew up around cars in the Cleveland area. The family moved to Venice in the 1970s, where Gerzeny and his younger brother, Steve Gerzeny, sold used cars and other vehicles. The other, says David Gerzeny, was what he called “hipster” vans.
Approached by clients, the brothers built their first in-house RV in 1985. The firm expended the product line slowly until 2000, when it introduced several options and sizes.
The biggest challenge Gerzeny faces is to counter an auto industry trend that emphasizes small over big — an obvious dilemma for a firm that sells 25-foot vehicles. “The auto industry as a whole is downsizing everything,” says Gerzeny. “Pickups are getting smaller. The Econoline (Ford van) is a dinosaur. Everyone is looking for that needle in a haystack: fuel efficiency.”
Other RV firms grapple with similar issues, all going back to consumer demand. Lay, for one, the CFO at Lazydays, says consumer confidence plays a big role in the entire industry's future. That's a metric Lay monitors closely, and although he says it's trending upward, the current “nonsense” in Washington, D.C., doesn't help.
Gerzeny says one Coach House staple that's remained the same, regardless of the annual sales total or customer demand, is the firm's entrepreneurial spirit. He says Coach House had a nimble approach when it exceeded $12 million in sales, and that flexibility only became more urgent in the downturn. That's why Gerzeny says he's not above any tasks, down to tightening a bolt, if necessary.
“There's no ivory tower here,” says Gerzeny. “Everyone has to do what we have to do to get the job done.”
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