Recession Strategies
By Bob Armstrong

When your business is selling big-ticket, discretionary purchases like boats and RVs, responding to a recession is going to test your management skills.

The owners and managers of two major dealerships, Rond’s Marine and Transcona Trailer Sales on Dugald
Road, have responded to both the recession and a cool, wet summer without layoffs.

Garth Bromley is president of the two dealerships. He says, “Most business people in the industry will tell you they’re off 10-12 per cent in sales.”

Though the recession started last fall, it arrived after the main season for the boat and RV business, so it
wasn’t felt until this year.

“Last year, 2008, would have been the best year ever for most Manitoba companies in the business,” says
Bromley, who is also chairman of both the Recreational Vehicle Dealers Association of Manitoba and the Mid- Canada Marine Dealers Association. This year’s (2009) drop in sales may be more a result of the cool
spring and summer, which reduced demand for boats, campers and other outdoor toys, he says.

Some customers have had a harder time with financing this year, he adds, as “banks aren’t prepared to stick their necks out as much.”

Rond’s and Transcona Trailer Sales prepared for the possibility of a drop in business early in the year by ordering less inventory.

“In some models, where we might usually carry four or five, we would carry just two,” Bromley says. At the same time, manufacturers of boats and RVs, many of them based in the U.S., have been more willing to make deals. As well, the rising Canadian dollar has made some products more affordable.

The owners were determined to avoid layoffs, in order to maintain the expertise of sales and service staff. In total, the two dealerships have 48 staff, up from 16 in 1995. In staff meetings in the spring, management
and staff agreed to keep costs under control through inventory reductions and foregoing raises and as a result layoffs have been avoided.

Bromley and his brother Terry own Transcona Trailer Sales and are partners, along with Denis Rondeau,
in Rond’s Marine. The dealerships are both long-time family businesses; Rond’s was opened by Ed and Helen
Rondeau in 1958, and Transcona Trailer Sales was opened by Fred and Joyce Bromley in 1963.

Reducing inventory this year means that as the dealerships are going into the winter season they don’t have a backlog of product. That means as well that they’ll be better able to respond to a recovery next year with new product.

“There’s nobody in the industry in Manitoba that’s looking for a worse year next year,” says Bromley, who is
optimistic that better weather and even a mild recovery will boost 2010 sales.

The need to avoid layoffs stems in part from the wide range of products sold by the two companies, such as motorcycles, snowmobiles, ATVs, and a wide variety of boats and motors, RVs, and tent trailers.

Bromley is confident that longterm trends will keep customers coming as economic conditions improve. About 40 per cent of his current customers are baby boomers who are able to treat themselves now that their kids are grown up and retirement is looming. And the additional silver lining is the growing share of the market is young families that want outdoor activities.

Bromley says training sales and service staff to work with so many products takes time and customers
demand people who can provide high-quality product knowledge. Says Bromley, “If somebody brings in
their machine for service, you want to fix it the first time. Snowmobilers are upset if they bring their machine
in for service and it isn’t ready for the weekend.”

By dealing with both summer and winter products, as well as providing services like winterizing and torage,
the company is able to attract fourseason business and keep staff busy year round, with only short lulls in
early spring and fall.

Because of the need for qualified staff, the industry has recently worked with the Manitoba government and Red River College to have Marine and Power Sports designated as a skilled trade with a recognized apprenticeship program. That means in the future it will be easier to attract young people to the field and ensure training through a combination of studies at Red River and on-the-job apprenticeship training.