Don, who had the job of traveling from store to store, didn't like all the time on the road, however. And he had a nagging feeling that adding stores was hurting, not helping, the business. "Our business wasn't growing. I was convinced we were robbing business from Tampa," says Wallace.
On Christmas Eve 1986, during a miserable drive from Bradenton to Tampa, Wallace decided to try to convince his dad and brother that a single RV super center in the Tampa Bay area was the way to go. "It was raining like hell outside," he recalls, "and I decided I didn't want to do this anymore."
Wallace's decision to focus on a single Lazy Days location -- a massive mega-store with an average of 1,000 RVs to choose from at any given time and a service center with 230 bays -- has paid off. In 2001, Lazy Days RV, located since 1996 on 150 acres in Seffner just east of Tampa, generated $584 million, making it the largest RV dealership in the nation.
Compare that to the $134 million in revenues posted by one of the nation's few publicly traded RV retailers, Holiday RV Superstores, a Fort Lauderdale-based chain of 11 dealerships in Florida, California, South Carolina, Virginia, West Virginia, Kentucky and New Mexico.
More than 90% of Lazy Days' revenue comes from the sale of new and used vehicles. The dealership also takes in revenues from maintenance, repair and body shop services, financing and insurance.
For the RV crowd, however, Lazy Days is more than a dealership; it's a theme park boasting rally facilities and a recently expanded 300-site campground now called RallyPark. (Both campground and rally facilities add further to the bottom line.) Several times a year, Lazy Days hosts NASCAR-related events, including appearances by Kyle and Richard Petty.
Who are all the RV owners flocking to Seffner? These days they are likely to be "the millionaires next door" -- retirees in their 50s and 60s who have saved enough to be able to spend up to $1.2 million on a luxury motor coach.
On a given day at RallyPark, dozens of 60-something couples like Fred and Betty Yeager can be found walking around in their shorts, lounging by the campground pool or grabbing a bite of lunch -- free -- at the Lazy Days dining room, where more than 430,000 free meals were served last year.
The Yeagers, who hail from New Castle, Pa., and winter in Florida, are on their third RV, this one a 36-foot "fifth wheel," which attaches to a pickup truck. They've purchased two of their three vehicles from Lazy Days, and on this trip they're checking out the new models. "We've always gotten a good deal and have been treated like family," says Betty Yeager.
Thanks to couples like the Yeagers, RV ownership nationwide has increased by 7.8% over the past four years, and 7 million households now own an RV, according to a 2001 University of Michigan survey sponsored by the Recreation Vehicle Industry Association.
The average Lazy Days customer is 64 years old, but according to the University of Michigan survey, the median age of RV owners nationwide is 49, with the fastest-growing group of RV owners comprising people between 35 and 54 years old. The younger RVers may be early retirees or families who use the vehicle for weekend getaways. "What we've got to do is get them at 35" and keep them coming back, says Wallace, who drums the idea of treating customers like family into each of the 576 Lazy Days employees during weekly customer service seminars. The goal, of course, is a loyal clientele that returns to buy newer and bigger RVs.
Bump in the road
Although the long-term prospects for RV sales look good, particularly as Baby Boomers enter the prime age for purchasing RVs, the past several years have been tough -- both on the industry and on Lazy Days.
"The slowdown for our industry began in fall 1999," says Wallace. In 2000 and 2001, Lazy Days revenues showed only a slight gain, increasing from $556 million in 2000 to $584 million in 2001. Profits were flat in 2000, says Wallace, but improved enough in 2001 to make that year the company's most profitable. "We began to see upticks in business" in late summer 2001, says Wallace. "After Sept. 11 -- in October, November and December -- sales were up by double digits."
Despite the post-Sept. 11 boomlet and strong sales in the first quarter of this year, Wallace is cautious about 2002, projecting a 6% increase in sales overall. He expects to sell 7,500 recreational vehicles at an average price of $80,000. The vehicles range from $5,000 to more than $1 million.
And with growth have come a few cracks in the well-oiled machine. RV service at Lazy Days, for example, is under stress. The company prides itself on giving immediate assistance for any emergency, but there is a two-month wait for routine service. Wallace plans to add 50 more service bays to ease the waiting.
Jerry and Nancy Nieman, "full-timers" who have purchased two RVs at Lazy Days, say that some of the salespeople aren't as knowledgeable as they might be, particularly concerning the size of a truck needed to pull a fifth wheel. Still, the Niemans say they will probably buy their next RV at Lazy Days, adding: "As larger places to deal with, Lazy Days is one of the better ones. But they are not perfect."
Long-term, Wallace thinks Lazy Days can keep its edge, predicting that the dealership will "grow to a $1-billion company by the year 2005." While Wallace expects to reach the $1-billion goal at the Seffner location, he has come full circle and is now convinced that Lazy Days must expand outside Florida. The super center concept will remain; Wallace plans just five new locations -- in Texas, Arizona, Oregon and yet-to-be-determined cities in the Northeast and Midwest.
The expansion is about two years away -- enough time for Wallace, who still hates to travel for business, to "find, train and keep great people" to run the satellite locations. "You've got to buy existing dealerships," he says, adding, "it's a doable plan. It's one that I'm sure we will do."
Big Wheel
Don Wallace doesn't own an RV. He owns a couple of Ferraris -- and a couple of Porsches.
Unlike most of the customers at Don Wallace's Lazy Days RV, the 53-year-old multimillionaire lives life in the fast lane. He owns a mansion on Tampa's tony Bayshore Boulevard -- reported to have cost $8 million to build -- that was the subject of controversy when Wallace tore down the historic Swann House for the new residence. There is another house in Key West; Wallace vacations in New York, Chicago, Hawaii and South Beach with his second wife, Erika, and their two children, 3½-year-old Donnie and 1-year-old Alexa.
Although Wallace, an avid reader and fisherman, doesn't own an RV, he uses one from the Lazy Days lot for weekend getaways. "My goal is to travel all around the country with my little boy and girl in a motor home," he says.
Born in Tennessee, Wallace moved to Florida as a teenager and after finishing high school returned to Tennessee to farm for 10 years. In the mid-1970s, he and his first wife moved back to Tampa with the idea of opening a landscaping business.
In a fateful move, he decided to sell his travel trailer and buy a bigger one. He made $500 on the deal -- a princely sum in those days that led him to dabble in buying and selling a few trailers a month. With his father, H.K., and brother, Ron, he built the RV sales business until, in 1989, his brother was killed in an automobile accident. H.K. was devastated by his son's death and eased out of the business. Wallace bought him out in 1993. H.K. died in June at age 83.
Most days, Wallace rises around 5:30 a.m. and arrives at Lazy Days between 6 and 7, in plenty of time to lead one of Lazy Days' employee-training seminars on leadership or customer service. One of the main reasons he keeps working is his son, Donnie. "I want him to see that dad gets up and goes to work every day," says Wallace. "I want my son to realize the value of hard work."
In July 1999, Wallace sold all but 16% of his interest in Lazy Days in a transaction that resulted in Lazy Days ESOP becoming the primary owner of the company. The employee stock ownership plan had been established in 1996 and had already owned 9% of Lazy Days. The 1999 deal pegged the value of Lazy Days at more than $170 million.
The ESOP buyout was a good deal for Wallace. An IRS provision allows owners who sell their company stock to an ESOP to defer the capital gains tax if they invest the proceeds in other U.S. stocks and bonds within 12 months.
What's next for Wallace? "I don't see myself leaving here, but I don't see myself always being the CEO," he says, adding cryptically that there are other things that he'd like to do in the community. He is determined to stay at least until Lazy Days meets his goal of $1 billion in sales. "I love this business," he enthuses.
LAZY DAYS
Employees: 576
Location: Seffner
Acres: 150, including a 300-site campground
RVs on site: An average of 1,000 at any given time
Sales: Don Wallace expects to sell 7,500 this year -- an average of about 20 every day for a year
Price range: $5,000 to more than $1 million, averaging $80,000
Maintenance bays: 230
Revenues: $584 million in 2001
Average customer age: 64
Free lunches served: 430,000 in 2001
The future: Plans call for 50 more service bays and five more dealerships -- in Texas, Arizona, Oregon and locations in the Northeast and Midwest