Is Camping World Going Bankrupt?

Is Camping World Going Bankrupt?

by Jason Epperson

YouTube videos and Facebook posts are beginning to spread a massive rumor about a favorite target. The message: “Camping World will declare bankruptcy within the next few weeks.” What’s more, they’re encouraging RV owners to cancel their Good Sam (a Camping World subsidiary) extended service plan (also known as an extended warranty) before SHTF. So before the world goes crazy, I thought maybe we ought to look at the facts.

Let’s just get to the bottom line right away:

NO. There is no empirical evidence that Camping World is on the verge of filing for bankruptcy.

If you like to stay above the drama and have no horse in the race, you can stop reading now. If you care to understand a bit more about what’s brought on this mess, stay with me.

There’s a podcast-slash-radio-slash-YouTube show called The RV Show USA, hosted by Alan Warren, who has had a bone to pick with Camping World for some time now. In fact, dozens of episodes set Warren’s sights on the US’ largest RV dealer, which is, admittedly, an easy target. Over the last year, the company has faced accusations of financial impropriety, plummeting stock prices, and lawsuits, along with reports of countless dissatisfied customers.

Warren has been sounding the trumpet for a while now about the alleged shaky financial situation of the company, and he’s not entirely wrong, but he’s turned exaggeration into an art. The show takes a page right out of your favorite AM radio conspiracy theorist’s playbook, amping up facts and half-truths to make a case for something that’s just not founded in reality.

Episode titles include “Camping World Exposed,” “Camping World sells 84-year-old Great Grandmother a Motorhome,” and a recent episode called “Camping World Ex-Salesman Dishes On Working There” in which the anonymous “Mr. X” attempts to expose all the shady sales techniques Camping World uses. Warren’s mind was “blown” by such tactics as upselling people to more expensive RVs and profiting off the financing. Things I think most people are aware of as modus operandi for vehicle dealerships of all kinds.

But this time, he’s gone a step further. Warren is encouraging people who have bought RVs to cancel their extended service plans (ESP) — or “extended warranties” as they’re known — that they may have purchased from Camping World subsidiary Good Sam in order to get a refund before things fall apart. Warren has even published a step-by-step guide for owners to do it themselves in an expedited manner. The popular YouTubers Hebard’s Travels latched onto this and put a video together of them going through the process of canceling their ESP.

Most of Warren’s insight into Camping World comes from a frequent guest named Kevin Frazer, the president of Cheyenne Camping Center in Walcott, Iowa whose logo hovers over Warren’s shoulder as the sponsor of his videos. Frazer’s longtime local competitor was bought out by Camping World, and he now faces them directly, and he’s been on the warpath since, often using Warren’s show as his venue to get out his message. That’s not much of a surprise to me. Camping World’s competitors are notorious for targeting their one common enemy. Go to any RV show and start talking to the non-Camping World dealers and they’re all going to tell you the reasons you should stay away, and why they do it better. But publishing a guide to canceling service from a competitor? That’s got lawsuit written all over it.

Now I’m no stranger to the stories people have about purchasing and getting their RV serviced at Camping World. There are many serious problems the company needs to deal with. But so do MANY other dealers. Just because the biggest guy might be causing problems doesn’t mean that the little guy is a saint. You should watch your back wherever you buy an RV, and if you find a great dealer, stick with them. And let’s not pretend the RV manufacturers are making it easy on any dealer with the massive drop in quality we’ve witnessed over the last decade.

But that’s all irrelevant to the question. Is Camping World going bankrupt? Let’s look at Warren and Frazer’s points one by one.

  1. Camping World stock has dropped 70%. Yep. Other major publicly traded RV companies like Thor Industries and Winnebago have seen similar drops. The RV industry had a major boom in the last few years and is undergoing a drastic correction. But the RV industry is very cyclical.
  2. Camping World’s terrible customer service is coming home to roost. Again, irrelevant. Whatever your stance is on the way Camping World treats its customers, it has nothing to do with their financial stability. People still buy there. Sales are not down. In fact, they are up.
  3. Good Sam Extended Service Plans are a terrible deal. Maybe. So are most of the other ESPs you get from a dealer. Or at least they’re often overpriced. We always recommend you buy them after the fact from a third party.
  4. On a May 8th investor conference call, Camping World CEO Marcus Lemonis revealed the company’s dire financial situation. Frazer states that Lemonis announced on this call he would freeze any future capital expenditures at his dealerships. Meaning, according to Frazer, that the company can’t afford to change lightbulbs and buy copy paper. But that’s not what capital expenditure is. Capital expenditure is an accounting term for acquiring fixed assets, such as land, buildings, and equipment. Things that are depreciable on a balance sheet.
  5. Camping World’s debt to equity ratio is astoundingly high, meaning they can’t get loans. Sure is. Doesn’t mean they’re going bankrupt. Their debt load is intentional. More on that below.
  6. Camping World execs are being sued for a “pump and dump” scheme in which the stock price may have been artificially inflated. Yep. They are. Is that a sign of bankruptcy? These lawsuits haven’t even been litigated yet.

Camping world has been undergoing a massive expansion. They purchased bankrupt chain Gander Mountain, and they’re in the middle of re-opening them as retail competitors to Bass Pro, Dick’s and Cabela’s, and they’re beginning to sell RVs at them. That roll-out hasn’t gone very well. But it’s going.

Camping World Holdings (NYSE: CWH) reported its fourth-quarter and full-year 2018 results on March 7, missing profit estimates and posting a loss of 83 cents per share for the final three months of the year. That’s certainly bad news. But revenue grew 10.6% in the fourth quarter, up to $982.4 million, topping expectations of $978.3 million, and for the full year, CWH recorded earnings of 28 cents per share on $4.7 billion in revenue, an increase of 12%. Not so bad news.

The major issue is that CWH issued $772.9 billion in new long-term debt over the past three years to finance its many outdoor retailer acquisitions like Gander. But on the whole, stock analysts consider CWH a hold or buy, and don’t seem too worried. I’ll take my cues from them before anyone who doesn’t know the ins and outs of publicly traded companies.

Buy your RV where you want to buy it, but I don’t recommend canceling your extended warranty just on a rumor started by a Camping World competitor. Especially since Good Sam ESPs are fully insured by A+ rated QBE Europe Insurance Ltd. Meaning even if Camping World goes under, you’re still covered.

About author

Jason Epperson

Jason travels the country full-time with his wife Abigail, and three children.

Comments
  • Peter Dube#1

    May 29, 2019

    As someone dealing with CW’s (lack of) service of my motorhome I purchased through them, you have reassured me. Thank you!

    Reply
    • Arthur#2

      September 20, 2019

      As of late August 2019. The CW store in Hamburg, NY has changed its name to Granger RV. As a former victimized Class A owner who been taken by their pathetic service work, it’s evidence that the name change is another ploy to hose their responsibility to irrate costumers they have abused and let down. I wouldn’t trust them!

      Reply
  • John Smith#3

    May 29, 2019

    Great article! Thanks for being a fair writer!

    Reply
  • Alan Warren#4

    May 30, 2019

    Hi Jason. Thanks for the write up. Your headline is good and the points you make (for the most part) validate my opinions. Again, thank you. A couple of things. First, I would love to have you as a guest on my show. It’ll be fun, engaging and will be an opportunity to promote RV Miles and your projects. Secondly (referring to your write up), like you I am an opinion writer who expresses thoughts, ideas and opinions, reports on stories and give personal perspective. The part about QBE Europe standing behind Good Sam ESP’s if Camping World does file for Bankruptcy protection, covers “casualty insurance” through Good Sam. QBE Europe is a large re-insurer. ESPs are a funny animal in that they are a hybrid (combination of insurance and warranty). Holders of a Good Sam ESP will become unsecured creditors in the event they file for BK. Since there are not enough assets to cover debt, these folks will be out of luck should a bankruptcy happen. If someone cancels their Good Sam ESP, they will get a refund of their unused, prepaid premium (which will either be refunded by a check or applied to the loan balance); making the borrower much better off when they decide to trade in on another RV. Also, there are many ESP options (for far less money) where folks can replace their Good Sam ESP if they choose to go that route. I’m not sure who said “Camping World is filing bankruptcy in the next few weeks”. I certainly did not say that and never would. I did say and I firmly believe that there are many, many things going on behind the scenes at Camping World that are just now beginning to come out and that I believe that bankruptcy is a real possibility. And I am not alone in this. I don’t wear a tin-foil hat and I don’t pretend to know the future. But I do have friends and insider sources and a unique perspective (as you likely have) and I have formed my opinion based on what I’ve learned. Please consider my invitation to join me on the air. Let me know if you’re interested and we’ll schedule a date. All the best. Alan Warren, The RV Wingman

    Reply
    • Jason Epperson#5

      May 30, 2019

      Alan, thanks for reading and responding. I think you’re highly complicating a simple issue. It is my understanding that the Good Sam ESP is fully insured Mechanical Breakdown Insurance – at least they bill it as such. If that’s the case, it MUST be fully insured under most state statutes. Meaning QBE is liable for either fixing your RV or for refunding the unused portion no matter what happens to Camping World. I agree there are many better options out there, but nearly every RV dealer in the country is selling cut-rate or overpriced ESPs. This is not a CW specific problem. Nor is it an RV specific problem. You have not directly said the exact words “Camping World is filing bankruptcy in the next few weeks” to my knowledge, but that’s the implication when you title videos like “Camping World going Bankrupt?!” and tell people they need to get out of their ESP fast before they close. Your recent videos have spawned many social media posts by others who simplify this message even further. I’m happy to come on the show. Please email me at editor@rvmiles.com to coordinate.

      Reply
      • Clyde R. Troutman, MBA#6

        June 7, 2019

        I worked for a large EW company for 7 yrs and was the Failed Part Program Manager at 2 very large auto manufacturers. I happen to have an MBA with multiple finance classes. I sit on the fence about CW and don’t own the stock. I’ve had RV maintenance at CW within the past year. I found them reliable and competitively priced. I personally don’t buy EW contracts. Companies sell them since it’s a very profitable business. They convince you to bet against the odds.

        Jason is mostly spot on with his assessment. This is a very fair analysis of the CW situation. Right or wrong, many large companies take on massive long term debt to avoid takeover attempts. It makes the company less attractive to potential suitors and more difficult to acquire. It is their way controlling their own destiny. I agree with Jason that the analysts don’t seem to be bothered. And, yes, you must meet state statutes and be approved to sell EW products in almost all states. Those products are strictly regulated and it’s in the company’s interest to construct it to the most stringent of the state’s regulations, e.g., NY & CA.

        Thanks for a fair and unbiased layman explanation.

        Reply
  • TIM D EPPERSON#7

    May 30, 2019

    Thank you for the break down of Warren and Kevin Frazer’s points. I heard about this from the Youtubers Hebard’s Travels and from what got from them was that they got there info from Warren and Kevin Frazer. I have been trying to find any information the might support this claim and all searchs keep coming back to The RV Show USA and Youtubers Hebard’s Travels. It is good to hear someone give a break down of Warren and Kevin Frazer’s references from a unbiased few.

    Reply
    • Jason Epperson#8

      May 30, 2019

      Tim, thanks for your kind words. Nice last name! Not one I see too often out there!

      Reply
  • Jack A. Hollabaugh#9

    May 30, 2019

    The way CW treats there customer’s after the sale the S.O.B.’S should close all the lying stores!!

    Reply
  • Nelson Swiger Jr.#10

    May 31, 2019

    Well I hope I did not screw up. I sent the paper work to cancel my ESP and even my GAP insurance. Did I make a mistake. I have a 2012 Keystone Alpine 3450 RL and wonder if I can even get another ESP? My wife and I are on Social Security and cannot afford to make a mistake.

    Reply
    • Jason Epperson#11

      May 31, 2019

      Nelson, you should have no problem getting a new ESP from a company like Wholesale Warranties, who we highly recommend. Gap insurance can be obtained from your insurance company. If all your eggs are in your RV basket, it’s essential.

      Reply
      • Nelson Swiger Jr.#12

        June 1, 2019

        I decided to keep my GAP insurance, but go ahead and cancel our ESP. The ESP was $3000 for 24 months which seems to be high. The GAP is $1200 for a 180 month loan. I did send the paperwork shown in Alan Warren’s video and I had a pleasant conversation with the dealership in Tyler TX where we bought our rig. Honestly I do not feel our dealings with Camping World were any different from our car buying experience.

        Reply
  • Carl jones.#13

    May 31, 2019

    Wondering what your basis of information is to support your position ? You seem pretty pro-Camping World.

    Reply
    • Jason Epperson#14

      May 31, 2019

      I have no horse in this race but the truth. I think the facts in the article back themselves up.

      Reply
  • 3tailsntow#15

    May 31, 2019

    Thanks for the very fair write up. We’re still canceling our ESP as we’ve already had to dish out cash for repairs (2 months in) for things like a thermostat replacement that we were told would take 2-3 weeks. They’re busy I get it. I’ll put my money to better use unfortunately.

    Reply
    • Jason Epperson#16

      May 31, 2019

      Yeah, these days an ESP that can be used with a mobile tech is really worthwhile. Everyone’s service dept is incredibly backed up.

      Reply
  • John Fox#17

    June 1, 2019

    I bought my travel trailer a year ago at the Burlington Washington store. I paid less there than I would have at 2 nearby RV dealers. How do I know that? I went through the whole process at both other dealers before saying no. I have nothing bad to say about Camping World’s customer service, it was great as was my salesman.

    Reply
  • Zeke Yount#18

    June 1, 2019

    I saw the Hebbard’s video this morning and was concerned as I have a GS Extended Warranty. I feel more confident in the GS warranty aspect but will probably continue to try and avoid Camping World service. My wife and I have been dissatisfied customers with both their labor rate, which is to me bizarre, to their charging me their labor rate for an estimate of work to be done (“Hey, we’ve got time in giving you that estimate”), to being told by a CW service rep “We only sell ’em, we don’t stand behind ’em.” All of this drove me to an excellent mobile repair service that works very nicely with the GS extended warranty. I’ve unfortunately had to use them three times in the last two years, which brings me to the real gripe about the RV industry – shoddy (could use a stronger word here) workmanship! Two of the three major problems we’ve had with our Heartland Wilderness have been because of terrible workmanship. The third problem was all my fault so no blame adheres to CW for that other than keeping our unit for 3 full months doing repairs.

    At any rate, thanks for the opportunity to vent and for the clarification on the original rumors.

    Reply
    • Anthony O.#19

      August 20, 2019

      I think the bigger picture to RV service issues is the MFG’s push them out so fast, they miss so much in the way of Quality, however they might never be regulated, also they will most likely always be built by hand, so in most cases unless you spend over $500K, I think we will always see Dealers turning away service. The biggest killer to me, is the things I had to fix on my Brand New Keystone, CW got paid to fix and never fixed on our RV, that being said, from now on, I will fix my unit, for the few things I can not, I have a local Mobile guy who can help me. The one thing I will never understand is if you didnt buy from us, we wont fix it for you later mentality has got to go, but then again some dealers will help out, but for us, the Price drove us to buy from CW, nothing else, most local dealers wanted $5-10K more for the same unit with less options, so not sure how that works. I have heard CW doesnt make much on the unit, it is all the extras they sell you that help them, i.e Extended Service Plans, Warranties, etc.

      Reply
      • RV Miles Editors#20

        September 26, 2019

        That’s part of it, CW also gets better wholesale deals because they are so big they order more units.

        Reply
  • Carl jones#21

    June 1, 2019

    The truth is based on what ??? I don’t see many facts other than your opinions and conclusions you present as facts.

    Reply
    • Jason Epperson#22

      June 2, 2019

      And what facts do you see to substantiate that they are going bankrupt?

      Reply
  • Jim M#23

    June 1, 2019

    I had to block that page as it reminds me of a crazy uncle at thanksgiving dinner. I tried to be fair and listen to it a number of times, but it’s consistently random rabble rousing. I’ve seen a few people repeat this myth and now I know why. Thanks for taking the time to lay out actual facts versus random “scary” talking points.

    Reply
  • vavet96#24

    June 2, 2019

    Please substantiate this: “Camping World stock has dropped 70%. Yep. Other major publicly traded RV companies like Thor Industries and Winnebago have seen similar drops.” Meaningless unless you are referring to the same time frame. Winnebago stock one year ago today: $36.80. Today it’s $32.14. (NYSE (WBO). Down, but not even close to a 70% drop – more like 13%. Now Thor (THO) is down about 45%, but still far from the fall of CW. Or are you just generalizing back to 2008 when the entire industry tanked? Your statement implies that WBO and THO have experienced similar drops in a similar business environment. It’s only fair to stipulate what time frames you’re referring to if you are going to attempt minimize the current CW stock collapse.

    Reply
    • Jason Epperson#25

      June 2, 2019

      All three of these stocks had their 5-year high at the start of 2018 — Thor Industries: 150.72, down to 51.65 on May 31. Winnebago’s high was 55.60, and dropped to 20.65 at the beginning of this year. Winnebago has recovered some of that ground since, but all three companies took pretty much the exact same 2018 nose dive.

      Reply
  • Eric Roussell, Sr#26

    June 9, 2019

    Thank you Jason. We have had our RV for 1 year. It is so good to hear the truth from a neutral party. I normally do not purchase ESP’s but I did this time because the RV was our first and I wanted to make sure we had a positive experience. I love our RV but our experience with service has been less than positive. I look at it like car dealerships. You have very good ones and very bad ones. Our dealership was good until we had a problem. We are determined to stick it out and people like you who look for the truth make that easy to do…. Thanks again..

    Reply
  • James Tudor#27

    July 6, 2019

    I enjoyed reading your comments. If you own a Winnebago and live in Georgia you have a shotgun wedding with Camping World, as its the only authorized warranty repairs facility. Repairs and recalls were handled, but they kept the unit for so long we missed 3 months of using RV. It’s critical that Winnebago provide other options (as do many of the other manufacturers) other than CW.

    Reply
  • Dave#28

    July 24, 2019

    Well Jason, I kind of took the Hebard’s to task on their youtube page for saying Camping World is going broke. I also pointed out to them the difference between expense items and capital expenditures, like you did. The truth is that they are in terrible financial condition. As I recall a worth to debt of something like .02% or over I think it was $477 in debt for every dollar of equity. That said, without knowing what charges they took in the current quarter/year related to their merger with Gander Mountain you really don’t know much about their financial condition. These charges tend to be put through in one quarter/year as they can then show increasing earnings in the succeeding quarters. Do I think that Camping World is at a crossroads, likely so. Do I know if they’re going to come out of it? No, and I don’t think anyone does. Time will tell. However I do agree with you that any ESP you have with them is likely safe and no panic is in order.

    Reply
  • Jack surf#29

    August 9, 2019

    In 2013 I bought a Bullet Premier travel trailer from CW.. for the first year there were no problems with the unit, then in 2015 we started to have issues withe hot water heater and the air conditioner ..when you turn on the heater the air conditioner would also come on so you had heat and cold air at the same time .. with the water heater the unit would not heat with the electrical or gas mode…I had the trailer in CW three times trying to get it fix..the first time they said everything works..I picked up my trailer and went camping. it did not work. back again. they said it worked went camping and it did not work. I returned the trailer back to them and they had my unit for about 3 months CW replaced the water heater reworked the air conditioner so it would work…before I took delivery I made them show me that every thing works but here is a funny thing we don’t have a thermostat its either on or off for the air or heater. they did not know how to fix the fuc…thermostat so they bypass the unit and install a switch. I will never buy from Camping World again and for all I care they can close up shop and go home.. I wish they would get their act together and start taking care of their client base otherwise its by by baby

    Reply
    • Rick#30

      August 12, 2019

      Wow!!! They bypassed the Thermostat with a on/off switch ? If this is how they ‘fix’ problems, I would want nothing to do with them. Thanks for sharing your experience.

      Reply
  • Jane#31

    August 29, 2019

    Like any retail establishment, it depends on the people at the store. We’ve shopped at the San Martin, CA CW for a few years now. Their customer service has been great. They’ve done maintenance work for us & hubby’s been very happy with it. We had one part of the service that they told us they weren’t qualified to do. Honesty is the best policy here, & we appreciated that they didn’t try to do work they knew they shouldn’t. Hats off to this store & staff (especially Quharra when she was on the floor, now in the back office — great employee).

    Reply
  • Ginger Pung#32

    September 20, 2019

    Seriously, I have worked for a publicly traded company for 23 years. It’s the same BS over and over. They try to reassure everyone that things are ok and going as planned. That is to keep people ie: customers and employees on board and than than the bottom falls out. They file for reorganization, leave people and companies with debt they owed them and come out smelling like roses. Only to do it all over again and not learn a thing from it! What a joke!

    Reply
  • s davis#33

    October 19, 2019

    Well, as many have noted you have probably written a “fair” article but unfortunately “fair” isn’t always helpful. Did you look at Camping World’s financials? They are dire. The advice to not buy and potentially get a refund on ESP’s is great advice given that there are better alternatives out there. I wouldn’t purchase an RV from them either. At some point you will be left looking for alternatives.

    Reply
    • RV Miles Editors#34

      October 20, 2019

      Second quarter (most recent) earnings report: $410 million profit. There are plenty of issues, but a company turning a mid-nine-figure profit every quarter isn’t closing anytime soon. And those ESPs are 3rd party guaranteed.

      Reply

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