Matthew Wagner: That’s a great question, Craig. That is exactly what we’ve been paying upon because we’ve recognized that consumers aren’t necessarily turned away from the RV industry right now, rather it’s quite the opposite. We continue to see relatively stable leads actually being submitted and general interest maintaining a certain level for the entirety of this year, which we were kind of flummoxed to start out there are saying, okay, why aren’t these consumers actually converting once they arrive. And we realized it’s simply just initially when the consumers are seeing the payments, they’re ultimately just not having a willingness to put that down payment to buy. So our ELY [ph] conversion this year has been down considerably as a result of these consumers, not necessarily having a willingness to put the money down.
Historically, we try to target that $200 to $225 monthly payment. And frankly, that monthly payment has gone up based upon our overall product mix. We’ve been working diligently to get that back down to where it once was, which is going to be an assortment of products that we’re going to be able to retail for 20k and under. And that’s where we’re going to continue to focus more and more of our efforts because we’ve seen those consumers that used to be able to afford that on the new side, just transition over to the used side. But frankly, some customers still would prefer new overuse.
Marcus Lemonis: Yeah. We have to find the balance, though, Craig, of making sure that we don’t ever abandon any one segment, right? There are other segments. And so whether that’s the destination trailer that the housing alternative for people or whether that’s an entry-level fifth wheel or an entry-level C class, as we look at the various segments, we think that there needs to be ASP declines in all the segments, starting with diesel, the gas, the seas [ph] the fifth wheels. This isn’t just going to turn into an industry that just sells inexpensive trailers. But as we want to bring new entrants into the market as we want to attract new people into the flywheel of this great lifestyle, we have to do it in the most affordable way. I don’t know if anybody knows what the word flummox is, I think I learned that, Craig, do you know what it is Matt just used that word. I’m hoping that’s something that’s going to make us money.
Craig Kennison: I don’t know what that is. Yes, I’ll google it. But…
Marcus Lemonis: That’s the problem with having Matt on these calls. I always feel stupid.
Craig Kennison: That’s great. Very helpful. I appreciate that. And maybe just to follow up, as you sort of run the math on model year ’24, given lower prices but higher rates, do you think you’ll come out with a lower monthly payment next year versus this year? And is that a factor in your retail outlook?
Marcus Lemonis: It is the goal. I have always been – and if you look at our advertising across all the different mediums, we are a payment retailer. We are not a price retailer. We do not want to have a race to the bottom to start all of a sudden have compressed margins for us or any other dealer. Everybody needs to make money in this process. And so when we look at it, we look at 180, 210 and 240 and the payment strata and really try to work towards a $5, $10, $15, $20 a month – excuse me, a day payment option for people going from the entry-level towable all the way up to the motorhome. It is an absolute goal of ours as we build the matrix that we think about where the prices need to be and we connect that into the formula where the interest rates are and now we have to hit that number.
That’s how a consumer buys. They buy on monthly payment. They don’t know if 17,950 is a great deal, but they do know if they can afford $189 or $239. We start bumping over $350, $400. It becomes a bit of a head scratcher for people. We need to take the head scratching away from the fund that they’re going to have in being in the RV lifestyle.
Craig Kennison: Head scratching. Thank you…
Marcus Lemonis: Head casting is easier than flummox.
Operator: The next question we have is from Daniel Imbro of Stephens Inc. Please go ahead.
Daniel Imbro: Yeah. Hey, good morning, everybody. Thanks for taking our questions. Marcus, I wanted to follow up on maybe the real estate strategy, Lindsey talked about. You mentioned that you consolidated a few locations, you found some more across the portfolio. Can you provide any more color on what those are? Are those maybe recent acquisitions that weren’t as strong as you thought with those legacy stores that just could be optimized? And then can you marry that with the M&A strategy. The pace has slowed, but you’re still doing big deals. Can you just talk about the portfolio optimization and how you see that evolving in the next like 3 to 6 months as you work through these industry changes?
Lindsey Christen: Yes. Well, first, maybe I’d like to say I think the pace really hasn’t slowed a bit. I think we’ve been at a pretty aggressive acquisition March and then opportunistic about those deals that we focused on. It’s true that some of those deals have fallen out of the pipeline for various reasons during the diligence process, that’s pretty typical, when you look finances, culture, leadership for various reasons. When we looked at the stores and how they are performing, however, in our own mix, we look at really consolidating and tightening up certain markets. We are making sure that our operating structure and costs were right and that we were able to serve the RV consumer really well in that market.
Matthew Wagner: Digging back to your consolidation question on – and store closures and how we kind of analyze those. It’s not always about the specific kind of underperformance of those stores. We look at a market taken as a whole where we might have a few stores in a general area. And as neighborhoods change, as population center shift over time where we’ve invested in a community for a number of years, things change and we take a look at what the market looks like and where we want to concentrate our efforts and our resources. And if it makes sense from an SG&A perspective and from a cost perspective to do it, we’ll do it.
Marcus Lemonis: Yes. I want to be clear about one thing we set a target to get to 320 over the next 4, 5 years, 320 locations, and that is an absolute mandate to march towards. But we will not do deals just to get to 320. And the way we balance it is that Matt and I sort of sit on one side of the table looking at the opportunities because we’re aggressive growers, and we want to see the company grow and we’ll grow go grow. And then Lindsey and Tom are the balance of that, where they get in the car, a different car than us on a different day and they visit the same acquisition. And more often than not, they call and tell Matt and I like, hey, no, we’re not doing this deal. We think that, that dynamic inside of our company is the key to us doing the right deals while maintaining a very aggressive growth strategy.
In a lot of cases, right, it’s a different lens that we look at it. And Matt and I look at the market share opportunity, the brands that they carry, the facility that they have. Tom and Lindsey go in and look at what are the underlying financials, what are the risks associated with it, what’s the culture look like? Lindsey does a deep dive with the people, what’s the overall environment. And if both parties don’t feel comfortable that all the boxes have been checked we fall off. I think also we realized that as we went through the year, the deals got better. And so we have to be smart, unfortunately, to some of the potential sellers, the deals got better. And if they were unwilling to adjust to whatever was happening in the overall market, then we had to necessarily that we had to take a pass and we had to go pick up other things.
