Q&A with Jeff Kurth, president and CEO of Wexco

Hottub 0110Jeff Kurth is president and CEO of Wexco, parent company of a group of industry firms including Fox Pools and Marquis Spas. We recently spoke with Kurth about his near-35-year history in the industry (which included a stint as president of Marquis), when he expected the market to turn around and about the passing of his friend and mentor, Donald Weir, founder of Wexco.

1. When did you get into this business?

I've been in the business since I was a kid. I started in 1975 while I was going to college working for a distributor.

Then in 1977, I, and another fellow at the distributorship, left and started up a manufacturers' rep business. We were repping various products in the Northwest United States, primarily in the pool industry, but we also picked up a couple of portable spa lines. We did that until '81 or '82. During that time we got together with the folks who'd started Marquis Spas in 1980. It was then called Pacific Spas, but that's another story.

So anyway I was involved with Marquis since its inception. I ran the sales and marketing department through the '80s, then in '91 I took over as president of the company, where I remained until 2003 when I moved over and started working with the parent company.

So I've been doing it 30 years. I'm almost as old as Stan Chambers. But I'm not that old (laughs).

2. Obviously there are some issues that weren't there when you moved on to being the president of Wexco.

We've seen the biggest decline in sales that we've experienced since there's been a spa industry. It's been year after year of signifi cant declines. We've had other big drops, like in 1987 after the market crash. But it came back in about 12 months. This one has been a long, sustained drop. So that's been the biggest challenge - going from an industry that at the end of 2005 was selling 450,000 units or so to this year closer to 135,000 to 140,000 units. It's unprecedented. The downsizing of people, resources, it's just been extremely difficult.

Frankly, one of the biggest surprises to me is we haven't seen more shakeout than we have. I don't know what the actual number of manufacturers out there is, but when you look at the drop in sales by two-thirds, we certainly haven't seen two-thirds of the manufacturers go away. I don't know how we're all still hanging in there other than just that - we're hanging in there.

But the good news is that I think we've seen a bottom. A year ago I wouldn't have said that. We were anticipating another 30 percent decline. This year, in the last few months - even though we lowered our expectations greatly - we've actually exceeded our forecasts. It's still below last year, but the gap isn't as big.

3. Will people start buying spas once consumer confidence picks up?

I think we're going to lag the overall recovery by some 12 to 18 months. Our expectations for 2010 are much like the 2009 results were. We're not anticipating any big sales increase. I think as we get into '11 it'll start to come back. I don't expect it to be up 30 or 40 percent; I think it'll come back slowly and that momentum will build. I think there'll be some pent-up demand.

Right now you get shoppers in that aren't ready to buy yet, but by the same token it's not like you get tire kickers that say, "We're really interested but we're going to wait." We're a destination type of outlet so people that find their way in are pretty serious about buying. It's not like you and your wife are out killing a Saturday afternoon and say, "Gee, let's go look at hot tubs." It just doesn't work that way.

So anyway, we're not looking for a big increase, nor are we looking for a big decrease. But as we get into '11 and '12 and the out years, I think we'll start seeing that business come back with steady increases.

First we need all dealers - not just Marquis dealers but dealers across the country - embracing new technology like Facebook and Twitter. I think that getting that "top of mind" awareness will go a long way, because we're still a cottage industry and a very small percentage of households have a hot tub in their backyard. Yet, you do any kind of economic survey, and once the product is brought in front of them, there's a significant proportion that would consider it. We just need to get in front of them.

Comments or thoughts on this article? Please e-mail [email protected].

Don Weir | 1930-2009

Don Weir, one-time NSPI president and owner of Wexco, died in September after a lengthy and distinguished career in the spa and pool industry. We asked Jeff Kurth, an associate of Weir's, about his friend and mentor.

I understand you knew and worked pretty closely with Don over the years. Can you tell us a little about him?

He was a great guy. He really was. There's a picture of Weir in the dictionary under "entrepreneur." That's what he was. He was a classic entrepreneur.

He was a great guy to work for. He was a mentor to me and to many others. He was always encouraging us. I've been a customer of his or worked for him for all the 30 years I've been in the business.

When I was real young, in my early 20s and fi rst starting in the industry, I didn't know this is where I was going to end up spending my whole career. In fact, I kind of doubted it. My plan was to go to law school and carry on in a more traditional approach. But he was always encouraging, saying, "Man, this is a great business, Jeff. I want you to think of Wexco as a place where you can spend your entire career." So he always had a positive attitude, even during these tough times we've been through the last few years. He'd been around since the late '60s, and he said this was the worst he'd ever seen. But he said, "OK, we've got things to deal with, but c'mon! Let's talk about some new product opportunities" or "Let's talk about the excess capacity we have in our factories and what else we can do with it." There was always that can-do spirit, can't give up, got to keep fighting. He instilled that in all of the management team that worked closely with him over the years.

And he was a hell of a competitor. He was a very good athlete in his younger days. He even had a tryout with the St. Louis Browns (now the Baltimore Orioles) back in the day. Loved sports. Huge Michigan football fan - he was a Michigan alum and the world stopped on Saturday afternoons when Michigan was playing.

He was a very competitive golfer who absolutely hated to lose. Oh, man, did he hate to lose (laughs)! He would do anything to psych you out or distract you or whatever. If you happened to be close to him or God forbid if you were beating him, it was really tough. But he was just a really great guy.

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