jcioffi Posted October 21, 2009 Report Share Posted October 21, 2009 Good evening, As the former Director of Purchasing for DM Industries, Ltd (1998-2008) I am sad to say that the carcas has been picked clean as the Maax Spas team has swooped in with a midnight/successful bid to acquire the inventories (both finished and raw), the molds, brand name, and intellectual properties of Vita Spa. While nothing has been officially announced, all employees were given the bad news at the once proud Opa Locka factory headquarters last Friday. No current employees were to be carried over to Maax Coleman. All that remains is a skeleton crew disassembling production lines that once built as many as 80 spas a day back in 2005. Visiting the facility this morning was like visiting a terminally ill old friend. The shock and sad realization that years of hard work were nullified all that was now left was to await the convoy trucks that will carry away the remains of the dearly departed. The few remaining former coworkers, pain etched on their faces, have nowhere to go. For many, this was their life. It can be interesting with how hopeful many are with the respect of the spa industry. It is almost a "Say it ain't so Joe" mentality. Guys, with all due respect, the crash of the housing market combined with spa industry giveaways made to both the consumer and especially to the dealers led to the complete implosion of the market. Let me explain. As the former Purchasing Director for Vita Spa, (I loved my job and miss it dearly) I saw first hand what happens year after year when you finance dealers for 4-6 months with free product. Most spa companies just don't have resources to bankroll these dealers, who would misuse that generosity so much so that your Accounts Receivable people spent days and nights trying to get paid while your suppliers end up becoming unwitting partners in the same unfortunate process. Gents, 2005 is over! It's a Walmart world with record unemployment, reduced or non existent disposable income and consumers living in fear of losing the jobs they have. For the market to return, it is my humble opinion that the following changes must take place: 1. Eliminate the "Early Buy" program throughout the market 2. The industry must consolidate itself. There are too many manufactures hanging on by a thread. 3. Reduce the warranty on pumps, shells and electronics. The manufacturer of the materials refuses to absorb those inevitable losses that come with natural life ending failure(s), why should the spa maker? 4. The industry needs oversight to qualify who can and cannot become a dealer. Just because you can become a dealer, doesn't me you are qualified to become one! Many dealers out there are technically unqualified or unwilling to work beyond the sale. 5. The industry did itself a huge disservice by selling to the Costco's of the world. The lure of solid payment/cashflow is offset by the loopholes afforded to consumers who can excercise "Buyer's Remorse" at the drop of a hat. If you do not have the margins built in to cover repairs, complaints and returns you will get eaten alive. The manufacturer(s), like Hydro Spa, who chose to unwisely enter this market failed to have a basic, solid product that's easy to operate, service and padded with the right margins. They undercut the market and got what they deserved. In the end, I can only hope that the market reminds itself of the definition of insanity....which is doing the same things wrong, over and over, and somehow expecting a positive/different result. Respectfully, John Cioffi Quote Link to comment Share on other sites More sharing options...
Recoil Rob Posted October 22, 2009 Report Share Posted October 22, 2009 Is the VitaBath whirlpool line still viable? I hope so because I just did a warranty job for them today.... Good evening, As the former Director of Purchasing for DM Industries, Ltd (1998-2008) I am sad to say that the carcas has been picked clean as the Maax Spas team has swooped in with a midnight/successful bid to acquire the inventories (both finished and raw), the molds, brand name, and intellectual properties of Vita Spa. While nothing has been officially announced, all employees were given the bad news at the once proud Opa Locka factory headquarters last Friday. No current employees were to be carried over to Maax Coleman. All that remains is a skeleton crew disassembling production lines that once built as many as 80 spas a day back in 2005. Visiting the facility this morning was like visiting a terminally ill old friend. The shock and sad realization that years of hard work were nullified all that was now left was to await the convoy trucks that will carry away the remains of the dearly departed. The few remaining former coworkers, pain etched on their faces, have nowhere to go. For many, this was their life. It can be interesting with how hopeful many are with the respect of the spa industry. It is almost a "Say it ain't so Joe" mentality. Guys, with all due respect, the crash of the housing market combined with spa industry giveaways made to both the consumer and especially to the dealers led to the complete implosion of the market. Let me explain. As the former Purchasing Director for Vita Spa, (I loved my job and miss it dearly) I saw first hand what happens year after year when you finance dealers for 4-6 months with free product. Most spa companies just don't have resources to bankroll these dealers, who would misuse that generosity so much so that your Accounts Receivable people spent days and nights trying to get paid while your suppliers end up becoming unwitting partners in the same unfortunate process. Gents, 2005 is over! It's a Walmart world with record unemployment, reduced or non existent disposable income and consumers living in fear of losing the jobs they have. For the market to return, it is my humble opinion that the following changes must take place: 1. Eliminate the "Early Buy" program throughout the market 2. The industry must consolidate itself. There are too many manufactures hanging on by a thread. 3. Reduce the warranty on pumps, shells and electronics. The manufacturer of the materials refuses to absorb those inevitable losses that come with natural life ending failure(s), why should the spa maker? 4. The industry needs oversight to qualify who can and cannot become a dealer. Just because you can become a dealer, doesn't me you are qualified to become one! Many dealers out there are technically unqualified or unwilling to work beyond the sale. 5. The industry did itself a huge disservice by selling to the Costco's of the world. The lure of solid payment/cashflow is offset by the loopholes afforded to consumers who can excercise "Buyer's Remorse" at the drop of a hat. If you do not have the margins built in to cover repairs, complaints and returns you will get eaten alive. The manufacturer(s), like Hydro Spa, who chose to unwisely enter this market failed to have a basic, solid product that's easy to operate, service and padded with the right margins. They undercut the market and got what they deserved. In the end, I can only hope that the market reminds itself of the definition of insanity....which is doing the same things wrong, over and over, and somehow expecting a positive/different result. Respectfully, John Cioffi Quote Link to comment Share on other sites More sharing options...
canadianrepairman Posted October 22, 2009 Report Share Posted October 22, 2009 it interesting how businesses rise and fall, it was just over 15 months ago Artic tried to buy Maax but failed due to lack of financing. now that Maaxs is owned by Brooksfield it become th 3rd largest Manufacture of hot tubs and seams to be on a buying spree of cash strapped manufactures. Quote Link to comment Share on other sites More sharing options...
hottubdan Posted October 22, 2009 Report Share Posted October 22, 2009 Interesting. Pool and Spa news had a different spin. Meanwhile, Phoenix-based Maax Spas has acquired the financially troubled DM Industries, maker of Vita Spas. DM Industries, based in Miami, filed for Chapter 11 in March and subsequently cut 206 jobs and several of its satellite offices. The company remained in operation, however, and the principals at Maax don’t intend to bring about any major change to the company or staff. The two firms generally serve dealers on opposite sides of the country, making parallel growth an option. “They’re going to grow their brand and we’re going to grow ours, and we’ll operate in the marketplace as friendly competitors,” Emil Nygard, vice president of sales and marketing at Maax. “We always considered them the competitors that helped build the industry.” http://www.poolspanews.com/2009/111/111n_spa.html Quote Link to comment Share on other sites More sharing options...
bart6453 Posted October 22, 2009 Report Share Posted October 22, 2009 Good evening, As the former Director of Purchasing for DM Industries, Ltd (1998-2008) I am sad to say that the carcas has been picked clean as the Maax Spas team has swooped in with a midnight/successful bid to acquire the inventories (both finished and raw), the molds, brand name, and intellectual properties of Vita Spa. While nothing has been officially announced, all employees were given the bad news at the once proud Opa Locka factory headquarters last Friday. No current employees were to be carried over to Maax Coleman. All that remains is a skeleton crew disassembling production lines that once built as many as 80 spas a day back in 2005. Visiting the facility this morning was like visiting a terminally ill old friend. The shock and sad realization that years of hard work were nullified all that was now left was to await the convoy trucks that will carry away the remains of the dearly departed. The few remaining former coworkers, pain etched on their faces, have nowhere to go. For many, this was their life. It can be interesting with how hopeful many are with the respect of the spa industry. It is almost a "Say it ain't so Joe" mentality. Guys, with all due respect, the crash of the housing market combined with spa industry giveaways made to both the consumer and especially to the dealers led to the complete implosion of the market. Let me explain. As the former Purchasing Director for Vita Spa, (I loved my job and miss it dearly) I saw first hand what happens year after year when you finance dealers for 4-6 months with free product. Most spa companies just don't have resources to bankroll these dealers, who would misuse that generosity so much so that your Accounts Receivable people spent days and nights trying to get paid while your suppliers end up becoming unwitting partners in the same unfortunate process. Gents, 2005 is over! It's a Walmart world with record unemployment, reduced or non existent disposable income and consumers living in fear of losing the jobs they have. For the market to return, it is my humble opinion that the following changes must take place: 1. Eliminate the "Early Buy" program throughout the market 2. The industry must consolidate itself. There are too many manufactures hanging on by a thread. 3. Reduce the warranty on pumps, shells and electronics. The manufacturer of the materials refuses to absorb those inevitable losses that come with natural life ending failure(s), why should the spa maker? 4. The industry needs oversight to qualify who can and cannot become a dealer. Just because you can become a dealer, doesn't me you are qualified to become one! Many dealers out there are technically unqualified or unwilling to work beyond the sale. 5. The industry did itself a huge disservice by selling to the Costco's of the world. The lure of solid payment/cashflow is offset by the loopholes afforded to consumers who can excercise "Buyer's Remorse" at the drop of a hat. If you do not have the margins built in to cover repairs, complaints and returns you will get eaten alive. The manufacturer(s), like Hydro Spa, who chose to unwisely enter this market failed to have a basic, solid product that's easy to operate, service and padded with the right margins. They undercut the market and got what they deserved. In the end, I can only hope that the market reminds itself of the definition of insanity....which is doing the same things wrong, over and over, and somehow expecting a positive/different result. Respectfully, John Cioffi Excellent post. In many cases you can change the names and descriptions of the products and it will ring true for many manufacturing segments of our economy. Cars, motorcycles, electronics....etc. Our country will forever be changed by the events of the last year. The economy was growing with money that was not there. People bought a house for $100,000.....made payments for 2 years and owed $98,000....had it re-appraised for $150,000.....borrowed that amount on the re-finance......so they had $52,000 to burn. Their lifestyle was raised to that level for a few years while their $52,000 was being slowly eaten away to pay the payments on their new cars, trucks, hot tubs, etc.... some did this twice, some three times.....but when the day came that their homes value dropped....and they could not re-finance.....they were up a creek without a paddle. They had payments that their monthly income could not support, including the now huge payment they made on their house.....and everything imploded! Robbing Peter to pay Paul is never sustainable in the long term. Quote Link to comment Share on other sites More sharing options...
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