grow their market share in 2009, he explained. "This business environment, particularly in 2008, was not an enhancement of working capital. If anything, market conditions exerted a neutral impact, if not a drain on capital for most businesses in our industry," said Lemonis.

As a company that provided $250 million in wholesale products to FreedomRoads last year, Thor was one of the business' largest partners. The $10 million loan announced this week is an enhancement of the relationship with Thor, said Lemonis. "There are only a handful of RV manufacturers we intend to do business with going forward, and Thor will get the lion’s share of that business," said Lemonis. "They will become our preferred vendor."

Thor Chairman Wade Thompson has not yet responded to an inquiry from RV Industry News.

The enhanced partnership with Thor doesn't mean FreedomRoads and Camping World RV dealers will carry Thor products exclusively, said Lemonis. His company intends to continue offering Fleetwood, Winnebago and Jayco brands in key locations, such as in markets where Thor has established relationships with other dealers, or when Thor lacks a product to fit a particular market segment.

"I suspect you will see other announcements soon that other manufacturers are seeking to secure their distribution channels," Lemonis said. "We want to partner with those manufacturers we view as being strong, prosperous partners. Any company that doesn't present itself as that may not be a manufacturer we want to do business with."

Partnering with strong, established manufacturers will help FreedomRoads dealers secure floorplan lending by working with RV makers perceived by lenders to be in a more secure position. "There is too much risk on wholesale lenders today," Lemonis explained. "We are seeking to reduce that risk by selecting specific manufacturers to work with."

Thor was willing to loan the company's owner money because it makes Thor stronger, said Lemonis. But, receiving the loan did not impact whether FreedomRoads would remain open or closed, he added.

"Don't be surprised if you see other announcements in coming weeks about preferred partnerships in other areas," Lemonis said. FreedomRoads already has established other preferred relationships, such as:

• Goodyear is the preferred tire vendor. FreedomRoads and Camping World will not sell any tires other than the Goodyear brand.
• Honda is the preferred generator brand
• Retail lending will be available through Bank of America, Bank of the West and U.S. Bank, which will handle 80 percent of all retail loans.
• The company will also select one extended warranty company, instead of products offered by several firms.

"When you look across a wide spectrum of business areas, having preferred vendors and consolidating our products around what they offer works to improve inventory, improve training, improve internal efficiency and improve the balance sheet," said Lemonis. "By working with fewer manufacturers, we will have less inventory and less dated inventory. It's all about ratcheting down in this environment."

Lemonis said FreedomRoads would not be acquiring new dealers this year, nor would Camping World be opening any new stores. "For us, 2009 will be all about hunkering down and gaining market share," he said.

The strategy is beginning to pay off, he added. So far, the company is only 5 percent off the numbers posted in January 2008, Lemonis explained. "We believe our early success is a derivative of the markets we are in, but also due to the manufacturers and vendors we do business with. They appear to be least impacted by the market conditions."

A lot of the RV dealerships which have shut their doors this year worked with a variety of RV manufacturers, Lemonis said. When those OEMs went out of business, the cascading impact ensured those dealers fell the fastest. The dealers were further challenged by partnering with lenders who exited the industry. The result created a situation in which the dealers wound up self liquidating as the financing and lot inventory dried up, he added.

The business environment has also been challenging for FreedomRoads, Lemonis admitted. "We have seen margin compression driven by two factors. The first was due to our desire to reduce inventory. To date, we have eliminated $100 million in inventory in the last seven months," said Lemonis. "The second factor was our desire to flush out products that don't line up with our core group going forward."

Lemonis expects margin compression to continue for another 45 days. Then, when the inventory is cleaner, he expects margins to return to some semblance of normalcy.

"We have 1,200 fewer employees today than we did a year ago. It was painful and unfortunate, but we believe we have reduced our staff to a team that can sustain specific profitability," he explained. "When businesses look at cutting costs, reducing personnel and inventory are the two biggest areas where retailers can trim costs.

"Going forward, our cost structure will be $50 million to $60 million less per year," said Lemonis. "We are tightening up our marketing, our inventory and our staffing. We will be doing less branding and adopting a tighter view on prospecting. We are going to focus on the 7 million to 8 million active RVers, and nothing else this year."

Lemonis said 2009 promises to be an interesting year, but he is not bracing for more bad news. On the contrary, he said he's positioning the company to make significant market share gains this year. "We're back to basic blocking and tackling right now," said Lemonis. "Tha's our winning strategy."

The Thor loan is not an indication that Thor is in bed with FreedomRoads or its dealers, Lemonis said. "Thor has long-established dealer relationships that will trump our relationship 10 times," he explained. "They will continue to serve their entire dealer body far more than they will serve us. The loan is not about Thor's involvement in FreedomRoads. Rather it is about FreedomRoads finding congruence and picking their dance partners."