I just discovered that Four Wheel Campers has been sold to a San Francisco-based private equity firm, Salt Creek Capital, as of September of last year. That is ordinarily the death knell of a company where the assets are perceived as more valuable than the operating business and its potential profitability. Most such firms basically gut the company, selling off assets and laying off employees until the business is no longer viable and is forced to either close or merge with another firm that can use the name for token goodwill. It seems that Tom Hannigan, owner of Four Wheel for some 15 years, began to give some thought to retirement and, being a businessman, decided to cash out. I’d met him in May of 2016, and he struck me as a sincere and stellar individual. He as owner has been responsible for taking Four Wheel Campers from an okay niche camper for restless souls, to a niche off-roading camper with improvements a lot more meaningful than new exterior graphics packages.
The improvements have been both relentless and effective over time, always several steps ahead of copycats. It has the most enthusiastic owner following of any truck camper out there – and certainly that of any RV – probably by analyzing the problem children that come back to the factory for repairs, and then making changes to the production design to prevent it. Quantity needed to institute a design change: one. When they found that many owners were adding pneumatic lifts to the exterior to raise a loaded roof more easily, Hannigan had his people analyze the attachments points for this type of mod and found them inadequate from an engineering standpoint. So he had the frame strengthened at the mount points with more beef in the fastener areas, and now offers the option to order a choice of lifts rated up to 40 pounds each during the initial build, if wanted. The result has been a stellar reputation and a production lead time (backlog) that shortens up to 8 weeks from a seasonal high of 22 weeks over the winter. During Hannigan’s reign, they’ve always had an inordinate interest in what buyers wind up doing to their campers.
I thought something was weird late last year when I noticed that Four Wheel was seeking to add a significant amount of assembly staff. Having weathered the recession that had killed off most of the RV industry, Hannigan absolutely hated having to lay off staff. So this seemed odd, since I think they make just 600 units per year, and staffing up means laying off when the orders taper back down in summer. (Right now, build time is 14 weeks.) Enter Salt Creek Capital, who apparently is well aware of the reputation of private equity firms and their effects on the businesses they acquire. They appointed Robert Vogl as CEO, which explains the sudden recruitment last year.
Vogl says that when Hannigan made his pitch, that there was a distinct lack of interest on both his own part and Salt Creek’s. Hannigan had presented his company as being in the RV industry which, given the last shakeout, seemed like heartbreak just waiting to happen. Once they began to go through the motions of looking at the profit history and demographics of buyers, they got the idea that Four Wheel actually represented an “outdoor recreation industry opportunity”. That is, current customers were mostly Overlanders with some RVers, and it was missing a much larger potential market, the “outdoor enthusiasts. According to Vogl, “One of the appealing attributes of Four Wheel Campers is its incredibly strong growth. The company has had a hard time keeping up with demand. If we could produce twice as many units, every one would be sold. We’ve got to ramp up our production to meet demand. I also want to bring awareness of Four Wheel Campers into different segments of outdoor enthusiasts. Outdoor enthusiasts are magnitudes larger than the RV and overland community we currently target. Five years from now, we will have dramatically increased our production capacity and quality, and broadened Four Wheel Campers into the outdoor enthusiast market. That’s where I see the company in five years.”
The effort to address that perceived broader market was initiated a year before, when FWC dealer Main Line Overland brought up the idea of a co-branded camper model, then followed through by contacting Woolrich, a Pennsylvania-based outdoor clothing company that dates back some 187 years. They produced the material for Union uniforms during the war between the states, and if you’ve noticed the familiar red and black “Buffalo Check” pattern on a lumberjack wannabe or two, that’s theirs. Clothing for outdoor enthusiasts. So both Woolrich and Four Wheel were coerced into developing a variant which does more than change upholstery. There will be just 100 made alongside standard campers on the line. I’m not sure how they will sell – they include nearly every option in the book and leave out very few. Anyhow, Vogt says of the end result, “The Woolrich partnership allows Four Wheel Campers to appeal to markets that are not currently aware of our brand or products. There’s a large segment of outdoor-oriented people who don’t know about Four Wheel Campers. The product concept is something they’ve never seen before. The Woolrich Limited Editions are a great product introduction for this broader market.” Years ago, FWC added a custom aesthetics option called the Silver Spur in response to a German dealer who claimed that the camper needed less homespun and more sophistication. (Video length below: 9 minutes)
I’m not real hepped up about the sale to an equity outfit, but Hannigan has certainly earned his due. On the good side, Vogt is experienced in running a custom manufacturer or two. He’s more of a systems guy with a bug for efficiency, quality, and “making life easier for our employees”. He claims that Salt Creek will not “mine” the company’s assets, but will add to them in the effort to broaden markets and increase production capacity. Nor will Salt Creek sell after a prescribed time period, he claims. He at least mouths the words that he recognizes and values quality and customer goodwill. On the bad side, he knows zip about campers and camping, and is planning to take on risks that tend to be one way streets that don’t allow reversals. You either win, or die trying.
Probably to avoid alarming the many customers who adore Tom Hannigan for his thoughtful determination, Four Wheel’s website has no mention of his departure, nor of the acquisition by a private equity firm or Vogt, probably due to the well-deserved leperous taint that the larger firms have earned for them. And although Vogt has been interviewed maybe twice since taking over, there’s no sign of any pushing to get the word proudly out. A brief, incidental mention of “the new CEO” at FWC in Truck Camper Magazine wasn’t made until January of 2017, with a genuine interview explaining the situation a month later. I guess the usual upbeat promise of “new management!” really only works when a business is dysfunctional and there’s a lot of customer resentment floating about. Here, you’ve got a well-respected guy stepping down from a turnaround success story, and sneaking in as quietly as possible is an efficiency expert backed by an outfit that by assumption has the reputation of a used car dealer turned senator. Enjoy your retirement Tom, and try not to watch out of habit. If they do build volume and eventually sell it off to Thor, Forest River, Fleetwood etc or one of their many sub-brands acquired and homogenized in the last downturn, I’ll spit. Then when I’m decrepit (okay, more decrepit) I’ll sell my Grandby at an inflated price as “one of the last good ones.”