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OH SAY CAN YOU RV

Even unsexy RV companies are now demanding Silicon Valley treatment from investors

By Oliver Staley

It’s hard to get farther from the glamour of Silicon Valley tech startups than Camping World, a recreational vehicles retailer that filed paperwork for stock sale this week. But even decidedly unsexy companies are trying to borrow from Silicon Valley’s IPO playbook.

Like Google, Facebook, and other big tech companies, Camping World will have multiple classes of stock after its IPO, giving its chairman and CEO, Marcus Lemonis, through several ownership companies, control over more than 50% of the voting shares.

That type of governance structure, while controversial, can at least be justified in the context of Silicon Valley startups, where young companies want to ensure their founder can execute on his or her plan, without having to answer to activist investors. (Other companies with two classes of shares, like the New York Times and Berkshire Hathaway, have other reasons for the structure, like shielding journalism from market pressures, or allowing smaller investors to buy stock.) In the case of Facebook, the structure also allows CEO Mark Zuckerberg to maintain control after he gives away his shares to charity.

But giving the CEO that much control makes less sense for a company founded 50 years ago. Camping World’s business model is well established, and while innovation in marketing is possible, it’s a stretch to argue that Lemonis’ singular vision is essential to the company’s future.

Lemonis has become a minor celebrity, starring on CNBC’s The Profit as an investor who bails out struggling businesses. Maybe he thinks that entitles him to more control over Camping World than Jeff Immelt has over GE.

Camping World, which has not disclosed when its shares will debut or on what exchange, declined to answer questions, citing SEC rules about maintaining a “quiet period” prior to an IPO.

All that said, Lemonis, 42, appears to be good for Camping World. Since 2011, when the Lincolnshire, Illinois-based company merged with Good Sam Enterprises, an RV membership service, he’s doubled revenue to $3.3 billion and increased net income to $178.5 million from $5.4 million.

Camping World’s success coincides with a boom in the RV business. Shipments of recreational vehicles, which includes self-driving motorhomes and trailers, reached 396,400 units last year, an all-time record and more than twice the number shipped in 2009, when the industry fell into a recession driven-funk. In a sign of the improvement since, US president Barack Obama recently traveled to Elkhart, Indiana, home to a number 0f RV manufacturers, to trumpet the nation’s economic recovery.

There’s a lot of reasons to think RV sales will continue to climb. The price of gas is low, credit is cheap, baby boomers are retiring, Americans are reluctant to travel abroad, and even flying domestically has become nightmarish. Investing in the RV industry may be smart—and buying shares of Camping World is one way to do it, if you can stomach ceding voting control to the CEO.

“Marcus Lemonis, through his beneficial ownership of ML Acquisition and ML RV Group, will have substantial control over us,” Camping World noted in its regulatory filing.

Ultimately, the market will decide if Lemonis is entitled to the same exalted treatment received by the tech wizards.