Gander Outdoors

Promises Abound, but Can the Outdoor Chain Deliver?
Big Time: Gander Outdoors has 56 locations and a strong mix of outdoor brands.

HEADQUARTERS
St. Paul, MN

DIGITAL FOOTPRINT
Our quick scan of Gander’s digital presence: A pop-up on the Gander Outdoors homepage prompts visitors to join its Good Sam loyalty club and get 10% off purchases. Club member discounts on shipping are highlighted. Product discounts and top categories are highlighted. Brands promoted on the site include Oakley, Coleman, Berkley, Gerber, Rapala, Browning, Remington, Columbia and Carhartt. RVs are on the site but near the bottom of the page after gear and softgoods. Social media posts are frequent and vary from things such as blog posts, product discounts, consumer submitted fishing photos and the retailer’s sponsorship of Nascar.

SOCIAL FOLLOWING
Facebook: 788K
Twitter: 133K
Instagram: 44K

IN-STORE REPORT
We visited Gander Outdoors in Eden Prairie, MN.
Top takeaways: This store is big, but not very busy when we walk in. It is located off a frontage road off of a freeway. The most prominent categories are hunting and fishing. The store sells live bait. Among the non-hunt/fish brands, the one that is featured most strongly is Ultimate Terrain, a house apparel brand. Across the store, discounts are promoted with many “sale” signs dotting the aisles and racks. Footwear is “serve yourself” on shelves. Footwear from Columbia, Keen and Adidas is prominent. Buy online and pick up in store options are available in-store.

The Rundown: Majority-owned by Chairman and CEO Marcus Lemonis, the star of CNBC’s “The Profit,” and New York private-equity firm Crestview Partners, Gander Outdoors is part of Lincolnshire, IL-based Camping World Holdings. There are 56 Gander Outdoors locations across the U.S. – most are in eight states: Florida, Michigan, Minnesota, Wisconsin, North Carolina, Texas, New York and Pennsylvania. Along with Gander Outdoors, the Camping World umbrella also includes Camping World, Gander RV, Overton’s, The House, Uncle Dan’s and W82.

Background: Gander Mountain Inc. began as a mail-order business and grew into a 162-store outdoor chain by 2017. Acquired Overton’s in 1996. Filed for bankruptcy in 2017 and was acquired in a bankruptcy court auction by Camping World Holdings.

Camping World Strategy: An objective of Gander’s parent Camping World is to serve the estimated nine million U.S. households that own an RV. Growth is projected to come from the rise in camping activity among retiring Baby Boomers, GenX and Millennial consumers reaching their prime camping age. An eight-month spending spree between Aug. 2017 and April 2018 cast Camping World’s net wider at a time when other retailers were working to rationalize their brick-and-mortar bases. Besides spending $37.8 million to acquire certain assets of the bankrupt, former Gander Mountain Co., including $15.6 million for Overton’s (marine banner) inventory, Camping World bought five small specialty retailers. Among them: The three-door Active Sports, which includes TheHouse.com, that specializes in bikes, sailboards, wakeboards, snowboards and outdoor gear; W82, a two-store banner focused on snowboarding, skateboarding, longboarding, swimwear, footwear, apparel and accessories; the six-store Uncle Dan’s; the four-door Erehwon Mountain Outfitter; and Rock Creek Outfitters, an eight-location specialist focused on kayaking, rock climbing, camping and hiking.

Major 2018 Developments: Things have been rocky for Gander Outdoors. As the company began opening more Gander Outdoors across the country, new RV sales began to moderate, starting in Q2. By late October, Camping World was slapped with at least two investor lawsuits alleging misrepresentation of financials and accusing CWH senior executives, including Lemonis, of selling more than $530 million in company shares at inflated prices. As of mid-March, company stock price stood at $13.50, down more than 59 percent year-over-year but up more than 21 percent since Dec. 21. Earlier this year, the company re-aligned its senior management team under Lemonis, installing Brent Moody as president, and naming four divisional RV presidents to heighten the company’s focus on inventory management, expense controls, product margins, cash flow and asset deployment.

The financial story: In FY18, Camping World generated 52 percent of its nearly $4.8 billion in revenues from new RVs, 15.3 percent or $732 million from used vehicles and $669.9 million, or 14 percent, of all revenues from retail.

Promises, Promises: For more than a year, Lemonis has pleaded with investors to be patient in waiting for a Return on Investment (ROI) from the company’s spending on retail. Some observers see Camping World’s long-term future as rosy if the integration of its outdoor retail empire goes smoothly and consumers buy into the concept in the months ahead. It has also been noted that the RV industry typically bounces back quickly from downturns. But Goldman Sachs, for one, is unable to wait for Camping World to find sure, profitable retail footing. The investment house, in mid-March, lowered its rating on CWH to neutral from buy, citing a lack of upward catalysts in the near-term.

Retail Strategy: If it’s going to succeed, the Gander and Camping World businesses need to be holistic, according to the ownership. Said Lemonis, “We’ve learned that a lot of the assortment at Gander has actually played out nicely in some of the Camping World stores, which is why we started to look at them to be really the same business with two names on them.”