Affinity Group Holding Inc.

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Affinity Group Holding Inc.

2575 Vista Del Mar
Ventura, California 93001
U.S.A.
Telephone: (805) 667-4100
Fax: (805) 667-4454
Web sites: http://www.rv.net;http://www.trailerlife.com

Private Company
Incorporated: 1992 as Affinity Group Inc.
Employees: 1.627
Sales: $431.1 million (2002)
NAIC: 511120 Periodical Publishers; 511130 Book Publishers; 721211 RV (Recreational Vehicle) Parks and Campgrounds; 813410 Civic and Social Organizations

Affinity Group Holding Company is the parent company of several businesses, including Affinity Group, Inc. (AGI), that provide goods and services to the outdoor recreation market, primarily recreational vehicle (RV) enthusiasts. Through its subsidiaries, the company owns and operates the Camping World chain of retail stores for RV parts and camping equipment and oversees several clubs for RV owners, including the Good Sam Club, Coast to Coast, Camping World’s President’s Club, Motorhome America Club, as well as Golf Card International. AGI publishes books, such as campground directories and buyer’s guides, and consumer magazines, including Trailer Life, Highways, MotorHome, and several regional publications. Another publication, RV Business, serves the recreational vehicle industry. Through several Internet sites and a cable television show, AGI provides technical and non-technical information to RV enthusiasts and act as forums for RV-related businesses. The company publishes several magazines for other outdoor recreational activities, including ATV Sport, American Rider, Woman Rider, and Thunder Press.

Early Organization

Stephen Adams, a private investor and entrepreneur, formed AGI in 1992 to oversee three companies—TL Enterprises, Coast to Coast, and Golf Card International—serving the outdoor recreation market.

The roots of AGI go back to 1941, however, with the publication of Trailer Life magazine, established by an association of trailer manufacturers. At ten cents a copy, the publication provided practical information on trailer repair and maintenance and featured articles on travel destinations.

In 1958, Art Rouse, an advertising executive, purchased Trailer Life. Ten years later, Rouse formed Trailer Life Publishing Company to oversee operations of that magazine as well as other publications he had initiated. Among the Trailer Life repertoire was an annual directory, RV Campground and Services, which proved seminal to RV enthusiasts and sold more than 300,000 copies each year. Also during this time, the company introduced Motorhome Life, later renamed MotorHome, a consumer magazine providing useful information appropriate to the RV lifestyle, including product tests and reviews, travel destinations and outdoor recreational activities, as well as humor and general interest material.

Rouse also purchased Trail-R-News, best known perhaps as the initiator of the Good Sam Club, founded in 1966 to provide a system of volunteer assistance to RV owners in trouble while on the road. The name Good Sam referred to the biblical principle of the Good Samaritan, and club members identified themselves by placing on their RVs a sticker depicting the cartoon character Good Sam. The club established Hi-Way Herald magazine, which later became known as Highways magazine, as its official publication. It also provided a variety of RV-related services, such as insurance programs, begun in 1978, and emergency road service, started in 1985, as well as discounts off the nightly rate at more than 2,000 private campgrounds nationwide. Another holding, RV Business, established as RV Retailer in 1972, covered issues of concern to recreational vehicle manufacturers, dealers, and insurers.

The company soon began diversifying beyond the RV world, offering publications of interest to those who enjoyed other modes of transportation. Rider magazine and Bicycle Rider for motorcycle and bicycle enthusiasts, respectively, were introduced.

Trailer Life Publishing, renamed TL Enterprises (TLE), also broadened its reach in the late 1970s by purchasing Benbow Valley RV Resort, a campground in northern California with deluxe facilities and a golf course.

In 1986, as part of a diversification and acquisition plan, American Bakeries purchased TLE. At that time the company was recording approximately $37 million in annual revenues, primarily from subscriptions to Trailer Life, with a circulation of over 300,000 subscribers, and MotorHome, with more than 120,000 subscribers. With over 480,000 members paying annual dues of $15, the Good Sam Club accounted for about one-third of revenues.

American Bakeries had also acquired Camp Coast to Coast Resorts, a national, membership-based network of RV campgrounds. Formed in 1972, Coast to Coast served membership resorts comprised of nearly 200,000 members; members could use any of more than 400 resorts in the network on a reciprocal use basis. Combining Coast to Coast with TLE allowed for an expansion of services from the Good Sam Club to Coast to Coast members. Members of each of these clubs had similar interests and backgrounds, largely retirees or pre-retirees who had raised their children and paid their mortgages, giving them the leisure time and financial foundation to enjoy long-term travel and recreation.

Consolidation Moves in the 1990s

Colorado entrepreneur Steve Adams acquired TLE and its sister company, Coast to Coast, in 1988. Adams was a veteran of the advertising, publishing, and communications industries, having established Adams Outdoor Advertising and having controlling ownership interests in several other related companies. TLE and Coast to Coast provided the basis for expanding products and services available to club members and customers in the outdoor recreation market. In 1990 TLE purchased The Golf Club, formed in 1973 to provide special rates and golfing opportunities for its members. Membership included discounted rates at over 360 country club resorts and two rounds of golf at more than 1,660 18-hole golf courses in the United States and overseas. The acquisition included the club’s official publication, Golf Traveler.

The formation of Affinity Group Inc. in 1992 provided an umbrella company for Adams’ existing companies and new acquisitions. With the May 1994 acquisition of the Woodall Publications Corporation, AGI obtained several regional magazines designed for RV enthusiasts, including Carolina RV, Florida RV Traveler, Northeast Outdoors, and Texas RV. The acquisition also included Woodall’s Campground Directory, the company’s flagship publication established in the late 1930s.

AGI acquired the San Francisco Thrift and Loan in 1996, renaming it Affinity Bank, for the purpose of providing financial services to its customers and club members. While continuing to provide full banking services to its existing base of four million customers, Affinity Bank developed services that catered to the on-the-road lifestyle of RV owners. Banking transactions took place over the telephone, with each customer assigned to a regular representative, if preferred. In 1997 the bank opened a second branch at AGI’s headquarters in Ventura, California. Banking operations were then reorganized as Affinity Bank Holdings Inc., an entity independent of AGI.

AGI augmented the goods and services it provided to the RV niche market when, in April 1997, the company acquired Camping World, a chain of retail stores supplying RV aftermarket parts and camping equipment. Based in Bowling Green, Kentucky, the first Camping World store opened in 1966. The company added a mail-order catalog and opened 29 additional stores as RV travel became more popular, particularly in the 1980s and 1990s. Camping World formed the President’s Club to extend special discounts and benefits to regular customers. As separate companies, Camping World and AGI had cooperated successfully on marketing programs with RV manufacturers, dealers, and consumers. The acquisition broadened the customer base for both companies, while saving costs by integrating redundant operations.

Also in 1997, AGI purchased Ehlert Publishing and successfully integrated that unit into the AGI publications division. The acquisition included several magazines catering to specific outdoor recreational activities, such as Snowmobile Magazine, SnowGoer, WaterCraft World WaterCraft Business. Ehlert acquired or started other publications, including the trade publications Ehlert Powersports Business and Boating Industry.

Key Dates:

1941:: Trailer Life magazine is started by a trailer manufacturer association.
1958:: Art Rouse purchases Trailer Life and develops other publications for RV enthusiasts under the company name Trailer Life Publishing Co.
1966:: The Good Sam Club is established as a volunteer protection organization for RV owners.
1988:: Stephen Adams purchases Trailer Life Publishing, now known as TL Enterprises.
1992:: Affinity Group Inc. (AGI) is formed to oversee three companies: TL Enterprises, Coast to Coast, and Golf Card International.
1994:: The acquisition of Woodall Publications adds seven regional publications to AGI.
1997:: AGI acquires Camping World chain of retail stores.
2000:: RVtoday begins to air on cable television; the first Great North American RV Rally is a big success.
2003:: The company begins development of retail destinations for RV travelers.

Late 1990s and Beyond

AGI found a new outlet for providing goods and services to its customers through the Internet, developing a variety of web sites, including individual sites to promote each club and its services. Some sites provided a limited extension of specific publications, such as Trailer Life and MotorHome magazines, while others provided specific services, such as RVSearch.com, where interested parties could buy or sell new and used RVs. The concept had originated in 1995 as a phone-and-mail operation, but the electronic version simplified the service. Sellers provided basic information and photos, and the site matched a vehicle to a potential buyer from a database of interested individuals.

In 2000 the company launched RV.NET which provided information and links of value to RV owners. The site contained a catalog of RV-related products and services, including financing, insurance, emergency road service, and extended warranties. Information included an RV repair manual and a campground directory. Members could make a change of address, order or extend magazine subscriptions, or order books from Trailer Life Books, such as the RV Buyers Guide. The site provided links to AGI clubs and magazines, to Camping World, and other RV-related web sites.

AGI’s broad reach to RV enthusiasts through clubs, publications, and the Internet culminated in a new annual event, the Great North American RV Rally. First held in Gillette, Wyoming, in July 2000, the rally differed from similar events in that it was designed to attract a broad base of RV enthusiasts. Members of the Good Sam Club, Coast to Coast, and the President’s Club, as well as readers of the company’s RV publications, attended the event. The rally featured entertainment, educational seminars, and an exhibition by more than 250 suppliers and manufacturers of RV-related goods and services. Camping World held a sweepstakes, giving away a recreational vehicle, while the Good Sam Club celebrated its millionth member. The Great North American RV Rally attracted 11,000 people in over 5,000 RVs and was considered a great success.

AGI also expanded its national presence by launching a cable television show called “RVtoday.” The 30-minute show brought information found in AGI publications to a video format. “RVtoday” contained segments about new products, road tests on new vehicles, technical advice, and features on RV campgrounds and travel destinations. After a pilot show in June 2000, regular broadcast began on the Nashville Network in April 2001. The following September the show moved to the Outdoor Life Network, airing three times a week.

The Internet continued to be an important avenue of promoting AGI’s services. In June 2001 the company launched adven-turemall.com. Operated by a new subsidiary, Adventure Mall, Inc., the site provided space for professional dealers and private individuals to advertise their sport vehicles for sale. These included recreational vehicles, motorcycles, all-terrain vehicles, personal watercraft, and sport utility vehicles. Related information included pricing guides, financial and insurance services, and rental referrals.

In October 2002 AGI introduced the RV Finance Program through the Good Sam Club. RV loan services included funding for private party and dealer/broker purchases, loan pre-qualification and refinancing, as well as equity cash-outs. Club members complete an application online at NADAguides.com, the website of NADA Appraisal Guides, publisher of recreational vehicle and other vehicle valuations.

In January 2003 RVtoday began its third season on cable television and its first season as an in-house production. In response to viewer input, the new season shows featured cooking and “how-to” segments. The 26 episodes ran five days per week, but expanded to seven days in March, continuing to air on Outdoor Life Network.

In March 2003 AGI launched rvSearch.com to make RV dealer advertising easier. The site allowed dealers to upload photos and information about an RV on three of nine available web sites. AGI also combined the advertising potential of its magazines and the Internet through a promotion on rvSearch. The program allowed customers to place a classified advertisement on the website and in Trailer Life, Motorhome, or Highways magazine for a special low rate.

During the early 2000s AGI also developed the idea of creating RV retail destinations. Specifically, the company initiated partnerships with independent RV dealers to locate Camping World stores next to the dealerships. Camping World preferred situations which allowed the company to share space under one roof with an RV dealer. Ideally, a common lobby area would house a customer lounge and offices, but each retailer’s sales area would be separate. Also, Camping World wanted to establish comprehensive RV retail developments that provided for all of the needs of the RV lifestyle. Each destination could provide a gasoline station, a convenience store, a restaurant, a waste dump, access to the Internet, and limited banking.

Camping World established five dealer partnerships, with the largest retail destinations in Palm Springs, California, and in Stuart, Florida, both near interstate highways. The Palm Springs site, called Indio RV Mall, involved a 25,000 square foot Camping World Supercenter on a 60-acre site with eight RV dealerships. In Stuart the company planned an 18,000 square foot store on a site to be shared with Florida Outdoors, a dealer of RVs, all terrain vehicles, and personal watercraft. Another partnership, with the Hart City RV Supercenter in Elkhart, Indiana, involved a sharing a 60,000 square foot indoor showroom. Camping World expected all the sites to be completed by the end of 2003.

In conjunction with the new program, Camping World upgraded business and operating systems and updated the store design. Stores took on a contemporary feel with a rustic, outdoor style. Camping World expanded its merchandise mix, adding snacks and traditional camping equipment, such as tents and sleeping bags. The company adapted the product mix to local geographic and seasonal requirements. The changes succeeded in increasing the average check amount. Camping World reported same store sales growth of 9.8 percent in 2002, contributing to companywide average sales growth of 6.4 percent; Affinity Group revenues of $431.1 million net $12 million in profit in 2002.