For all wondering - it is true, Hydro Spa has filed Chapter 11 bankruptcy but will remain open as mainly a spa parts outlet and will continue to build spas for some local and out of state dealers. I have been dealing with them for over a decade and have close ties with some of the employees who are still left there. Many of them have been let go but they are still operating in attempt to restructure and restart the business back to what it used to be - a small family owned business that deals with individual hometown dealers. The reason for this downfall comes down to one word - COSTCO. When Hydro Spa started its relationship with Costco in 2005 they opened up a can of worms that just got out of control. They started building a tub strictly for them and were selling it them dirt cheap, making hardly any profit from it what-so-ever. But the lure of going nationwide suckered them in and now they have paid dearly for it. The tubs made for Costco, the Platinum 1, 2 and 3 (the Legend) were top of the line spas, using the same equipment and parts used in their Mark III line of spas which they sold to their local dealers for almost double the price they were selling the Platinum ones to Costco for. But Costco was selling so many of them they fiqured that the quantity they sold would make up for it. What they failed to realize what would kill them is the service end of it.
When they sold the spas to the small mom & pop dealers they would usually service it themselves, sending in their labor bills to Hydro for anywhere from $55- $100 a call which would get either credited to their account or trade off for parts. But with Costco, all the service had to be outsourced to local service techs who Hydro had to find via internet or resort to calling the same local dealers that sold their other brand of tubs, which pissed many of them off knowing that they were selling tubs in their area at almost half of what they were selling a comparable tub for. Needless to say that caused them to lose many of those dealers. Well the service bills started piling up with Hydro having to payout double, triple and even quadrupal the amount of service bills that they had to pay for the small dealers. With Costco selling these tubs all over the country, places like Canada, Hawaii and the west coast, the labor was not cheap. The root of most of the Hydro Spa problems were leaks, many of these that were caused by either transportation or storage. Yes there were also some equipment failures, but that is normal with any spas, as I said they use all the same equipment as their other line of spas as well as everyone else in the industry. The only other main problem was stereos and speakers, which I feel have no place in a spa. But anyway back to the leak problems -Costco would store these spas on their end in frozen storage rooms and all the water that may have been left in the spa from Hydro's water testing (Yes, they did water test them!), would settle in the front equipment area and would freeze causing the plumbing to crack. Although some of the blame could be blamed on Hydrospa for not getting all the water out but it is nearly impossible to drain every drop of water out of a spa. Anyway Hydro Spa had to foot the bill for all these techs to go out to all the northern Costco stores and inspect them for damages as well as all the customers who already received them. Costco had no responsiblities with the spas other than to sell them. Even if a customer wanted to return a spa to Costco for any reason, whether it was actually defective or they just did not like the color, Hydro spa would sometimes have to foot the bill for the customer to return it as well. All this added up over their 3 year relationship making Hydro unable to pay all these techs and also some of thier parts suppliers. So they have now cut all ties to Costco and come next week all warranties for spas purchased through Costco will most likely be null and void. Anyone who calls in for a warranty part will be given the option to pay for the part either COD or credit card and get reimbursed when the bad part is returned, or they can just return the spa to Costco or thier local dealer or be given a number to call where they can attempt to get their money back for any parts or services rendered that they have to pay out of pocket to get it fixed. So if any one calls in to Hydro be preapred to have your credit card out because that is the only way your are going to get anything. Also if calling try to take it easy on any of the customer service reps that answer the phone, I know many of them personally and they are going through a rough time right now, many fearing for their jobs and it is not their fault it is COSTCO'S!!!
Hopefully they can rebuild and go back to the way they were and at least sell parts. Many of us local Florida techs rely on them for parts instead of having to call out of state to get them, So bon voyage and good luck to Hydro Spa!