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Thread: Article in today's morning newpaper.

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    Site Sponsor TNFSolitude's Avatar
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    Article in today's morning newpaper.

    Here's how Winnebago reinvented itself for young buyers

    Kevin Hardy

    kmhardy@dmreg.com USA TODAY

    DES MOINES - In a country club, Mary Gottschalk clicked her slideshow to show three recreational vehicles to a crowd breakfasting on scrambled eggs and oatmeal.

    On the screen appeared an antique, stainless steel teardrop trailer, followed by a hulking, turquoise motorhome and, lastly, a red camper van topped with a matching kayak.

    “Which of these are Winnebagos?” she asked her audience, before flashing the correct choice on the screen - the sleek, ruby-red van with a sporty bicycle hanging off the back door.

    “I was surprised, too,” she said before introducing Winnebago Industries CEO Michael Happe to the podium.

    Iowa-born Winnebago, famous for its big, boxy motorhomes, is in the midst of a major makeover designed to appeal to a wider base of buyers - and Happe is the man leading the transformation.

    The company has rolled out a line of allelectric vehicles and ponied up half a billion dollars to acquire a wunderkind towable business.

    Perhaps most notably, Winnebago purchased luxury boat-maker Chris-Craft, signaling its interest in expanding its empire beyond traditional recreational vehicles.

    Winnebago has seen its fortunes rise during that time, aided by one of the U.S. economy's longest expansions ever. Winnebago earned more than $2 billion in fiscal

    year 2018 - nearly 10 times larger than 2009's earnings of about $211 million.

    Its stock price is hovering around $21.50 a share after peaking at $56 a share in December 2017.

    Of Winnebago's 4,600 employees, about 2,270 work in Iowa.

    Analysts are enthused by the company's performance, even amid concern that Winnebago's motorized segment hasn't seen the same growth as other parts of the company's expanded product mix. And the wider RV segment remains vulnerable to a potential economic downturn.

    Happe said that Winnebago, which long has enjoyed strong brand awareness with consumers, is beginning to realize its full potential since he arrived in January 2016.

    “I am not a turnaround artist,” Happe said in an interview. “I think this is more of a goodto- great journey than it is a turnaround.”

    Case in point: Winnebago's new 191⁄ 2- foot


    Workers install the moving bed frame on the Winnebago Revel at the company's Lake Mills factory this month. The Revel has sparked the interest of outdoor enthusiasts. BRIAN POWERS/THE REGISTER



    Revel motorhome represents a huge departure for a brand that has long specialized in serving silver-haired retirees.

    The sporty, Iowa-built coach was designed to attract younger buyers who want to explore off the grid but may have never considered an RV.

    Since the Revel hit the market in September 2017, dealerships across the country have struggled to maintain their inventory.

    “This is the very first month in 13 months that we've ever had inventory,” said Ron Lichtsinn, owner of Lichtsinn RV in Forest City, Iowa. “And some of these people that originally ordered just took delivery in the last three months.

    “They're absolutely new entrants to a motorized camping lifestyle. They probably have never stepped foot in a campground and probably never will.”

    The success of the Revel reflects Happe's efforts to appeal to a broader base of customers - part of his marching orders from the board of directors that hired him as Winnebago's first outside CEO in decades.

    While Winnebago has made big moves in the camping and marine sectors, Happe started with a more philosophical change: establishing a new corporate vision that set a common set of goals for employees.

    “In essence, we didn't have a North Star,” he told the crowd at the country club. “We did not know where we were going in three, five, 10 years.”

    Within his first six months, Happe's team created a new path for Winnebago that no longer defined the company as an RV manufacturer, but cast a wider vision as a leader in “outdoor lifestyle solutions.”

    “It was giving our team permission to think bigger,” he said.

    That broader vision has brought greater risk.

    For more than five decades, Winnebago never added debt to its balance sheets. But those days are over.

    As of Aug. 25, 2018, the company had outstanding debt of $291.4 million, which has helped fuel acquisitions.

    Ashis Bhattacharya, the company's vice president for strategic planning and development, oversees acquisitions as well as the company's emerging all-electric vehicle line. He said Winnebago will continue to look at more acquisitions.

    “We're willing to place aggressive bets,” he said at a September mergers and acquisitions conference in Des Moines.

    Bhattacharya said Winnebago is eyeing industries adjacent to RV manufacturing and the wider outdoor market.

    “We definitely want to understand the outdoor lifestyle better,” he said, “and see how can we be a more valued part of that lifestyle.”
    Tom & Nancy
    Newport, MI
    369RL, #302


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    Super Moderator TucsonJim's Avatar
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    Thanks for sharing. The economy has been great for manufacturers and they keep cranking out the units and trying to provide products to different markets. While this is good for manufacturing businesses, the aftermarket businesses haven't kept up. With so many units on the road, there is a real lack of service facilities and parts delivery strategies. Not to mention the lack of places to camp and store RVs in popular areas.

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    If the recent stock market is any indication of where our economy is headed in 2019, the RV industry will be living off rainy day funds for awhile and a big supply practically new preowned RV’s will be selling for pennies on the dollar.
    2015 27RL
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    Quote Originally Posted by minnow101 View Post
    If the recent stock market is any indication of where our economy is headed in 2019, the RV industry will be living off rainy day funds for awhile and a big supply practically new preowned RV’s will be selling for pennies on the dollar.
    With student debt at a higher level than the mortgage debt before the 2008 crash, things are going to get rough for lots of people. Personal debt is also at an all time high. With something 60+ % of households not having the cash to be able to handle a $1,000 emergency, me thinks it's going to be rough for consumers as well as RV manufacturers. From what I've read, a bailout from the Gov will be very hard to do without something giving somewhere.
    The MFG's that survive the next big one will be lucky or smarter than the rest. Unfortunately the workers at most RV plants will be out of a job.
    A similar 2016 GOBankingRates survey found that 69 percent of Americans had less than $1,000 in total savings and 34 percent had no savings at all.

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    Super Moderator Cate&Rob's Avatar
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    Quote Originally Posted by goducks14 View Post
    With student debt at a higher level than the mortgage debt before the 2008 crash, things are going to get rough for lots of people. Personal debt is also at an all time high. With something 60+ % of households not having the cash to be able to handle a $1,000 emergency, me thinks it's going to be rough for consumers as well as RV manufacturers. From what I've read, a bailout from the Gov will be very hard to do without something giving somewhere.
    The MFG's that survive the next big one will be lucky or smarter than the rest. Unfortunately the workers at most RV plants will be out of a job.
    A similar 2016 GOBankingRates survey found that 69 percent of Americans had less than $1,000 in total savings and 34 percent had no savings at all.
    goducks14 - We need a "Yikes" button! This is scary, but "thanks or "like it" just don't fit. Very sobering numbers . . .

    Rob
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    Quote Originally Posted by Cate&Rob View Post
    goducks14 - We need a "Yikes" button! This is scary, but "thanks or "like it" just don't fit. Very sobering numbers . . .

    Rob
    Some food for thought. Student debt'
    https://www.forbes.com/sites/zackfri.../#1f6b43557310
    Consumer debt
    https://www.cnbc.com/2018/05/21/cons...d-of-2018.html
    Mortgage debt
    https://www.housingwire.com/articles...an-ever-before

    It won't take much of a downturn to derail RV sales.

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    Super Moderator Country Campers's Avatar
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    Things will be worse by 2022 , next year if you pay attention you will see we are starting a down hill slide , getting worse by 2022.
    I am sorry I can not divulge my sources and hope they are not true but I am thinking they may be on the right track.

    Brian
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    Quote Originally Posted by Country Campers View Post
    Things will be worse by 2022 , next year if you pay attention you will see we are starting a down hill slide , getting worse by 2022.
    I am sorry I can not divulge my sources and hope they are not true but I am thinking they may be on the right track.

    Brian
    Many feel we are on a downward trend but it does not mean we will hit a recession. These trends tend to be on 10 years cycles.
    MidwestCamper

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    Tom - thank you, for sharing the Winnebago article in your post #1 . As I have been following Winnebago for sometime I have read about their new ventures and business strategy. While branching out from mainly just producing class A and class C units to other RV types (and buying GDRV) make sense, I hope they are doing their due diligence and not getting too burdened with debt. When things take a turn (and the pendulum swings with Capitalism) it could be a real challenge with all eggs in the leisure/outdoors/etc. segments basket.

    Dan
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    Winnebago Industries Inc. reported a 9.7% increase in revenue for the company’s fiscal first quarter, ended Nov. 24, buoyed by strong growth in the company’s towable sales.

    Revenues totaled $493.6 million compared to $450 million for the year-ago period while net income was $22.2 million, an increase of 23.4% from $18 million. Earnings per diluted share were 70 cents, an increase of 22.8% compared to 57 cents in the same period last year.

    They're making plenty of money off of us.

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