Affinity Group Continues Skid, Could Affect RVers
The troubled RV industry giant, Affinity Group (AGI), finds itself in the news again, and it isn’t the “happy talk” column. Affinity Group whose “children” include the Good Sam Club, Camping World, Trailer Life, and Motorhome magazines as well as other RV related corporations is just another of the big list of firms evidently struggling to tread water. The trouble is, plenty of RVers may not have direct “stock” in the company, but could find themselves effected if the company goes belly-up.
A few months ago a major analyst of publicly traded firms opined that 2009 could actually see the demise of AGI in the strain of the economic times. To add another nail in the proposed coffin, Pacific Coast Business Times now reports that AGI is facing a major hurdle this June: The maturity of a big secured credit agreement. Business evaluator Standard and Poor’s is reported as saying it sees “uncertainty” about AGI’s ability to get financing to take the place of the big agreement that’s coming due. As a result, S&P has lowered their rating of AGI to CCC, meaning the firm is “currently vulnerable and dependent on favorable economic conditions to meet its commitments.”
A possible lifeline, S&P says, is a non-binding agreement from a different lender to bail the company out, assuming AGI sold off its Camping World chain of RV parts and accessory stores. Even this offer comes with a significant hazard–the likelihood of a much higher interest rate than the company is presently working to meet. At present, Affinity Group listed assets of $309 million and liabilities totaling $496 million on Sept. 30.
So what happens to the myriads of RVers who put their faith and trust in AGI and their offspring? What happens to fulltimers who’ve put money on AGI “insurance” plans against major RV component failure? What about the RVer who breaks down somewhere on America’s Loneliest Road, picks up the cell phone and dials for AGI sponsored Emergency Road Service? Will the phone ring endlessly in some vacated call center? These are questions that have to give all of us a bit of a pause.
