Textron Financial is pushing its remaining hot tub dealers to pay off their balances by instituting new fees for floor checks, according to at least one longtime retail customer.
Backyards of America in Sandy, Utah, received notice in late 2009 that the lending institution now would charge $150 each time it entered the retailer’s facilities to match serial numbers with invoices, said store owner Ray Schureman.
“They’re really doing the hard press,” Schureman said, adding that at no time in the past had Textron levied assessments for monthly audits. “We’ve been a Textron customer for 15 years, and we’re really having to scramble now.”
Textron announced to its dealer network in late 2008 that it would no longer handle floor planning for hot tub retailers, part of a broader move to exit a large portion of its commercial finance business, said spokesman Michael Maynard.
Company officials declined to comment further on the arrangement.
Schureman, who said his business carries a $250,000-plus credit limit and an AAA credit rating, now is worried about having to support its own flooring program. That, in turn, forces the retailer to cut his advertising and marketing, and rely more on forms of credit (credit cards, for example) with higher interest rates.
“We’re just chipping away at what we owe them,” he said of Textron. “A lot of us are now having to buy our own inventory, and having to dig away at our credit cards.”
Backyards of America, which also sells outdoor products such as gazebos, barbecues and tanning beds, has been a Sundance Spas dealer for the past 19 years.
Sundance had an existing floor planning program with GE, and that simply grew following Textron’s announcement, said Anthony Pasquarelli, communications manager at Sundance/Jacuzzi in Chino, Calif.
And while Schureman does do business with GE, the company doesn’t deal in the same dollar amounts Textron had allowed, he said.
“There is no one-size-fits-all solution for dealers who seek floor financing,” Pasquarelli added. “We have a strong relationship with GE Commercial Finance and work with our customers to find the best options or alternatives to fit their individual circumstances.”
Hot tub maker Watkins Manufacturing was under contract with Textron beyond the date of the announcement. But since that time, Watkins established a program with GE and has encouraged its customers to pursue that avenue in lieu of the arrangements they had with Textron, said Mike Dunn, vice president of sales and marketing at Vista, Calif.-based Watkins.
“We had an agreement with Textron, and they fulfilled their end of it,” Dunn said. “We knew around the end of ’08 that they were getting out of the floor-planning business on a go-forward basis.”