Dealership net losses growing

SIOUX FALLS, S.D. – With total dealership sales still tracking nearly 30-percent down when compared to the same period last year, the dealers that Spader Business Management tracks are taking even bigger hits to their bottom line.

Through the first quarter of 2008, these dealers are showing a net loss of more than $87,000, an increase in net loss of nearly 270 percent. Last year, through March, the dealers Spader tracks showed a net loss of $23,770.

The training and consulting firm tracks North American boat dealers, both large and small, to compile an average profile, then compares year-over-year trends in a number of different categories.

Total boat inventories for the group have dipped by 3.7 percent from $4.46 million to nearly $4.3 million, and both new (down 3.8 percent) and used (down 2.2 percent) boat inventories have declined. But total dealership sales for this group, on average, have declined nearly $700,000, or 28.1 percent through the first three months.

Most of total sales shortfall has come from the decline in new boat sales, which have dropped by 31.2 percent. And it’s becoming more costly to move those boats, as well, as the new unit gross margins have fallen nearly a full percentage point from 16.9 percent to 16.0 percent during the same time period.

The total dealership gross margin percentage was slightly ahead of 2007 – 28.8 percent, compared to 28.4 percent — due largely to the fact that a larger portion of the company gross margin is coming from the marina and service revenue. Marina gross margin percentage is up 4.4 percentage points, while service gross margin is down just slightly.

The average marine dealer in this group seems to be managing its expenses better, reporting significantly lower spending in all expense categories. However, as a percentage of gross margin, spending is up by nearly 14 percentage points.

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