but can duo heat up sales?LOS ANGELES — The hot-tub business is in the tank.
About 60 spa manufacturers have closed over the past six years and experts say sales have dropped by as much as two-thirds over the same period. But at a time when its competitors are pulling back and trying to diversify, a Pomona, Calif., company is hoping to stave off the continuing decline by gambling on a well-known name.
Hot-tub manufacturer LMS Inc. has paid an undisclosed amount of money for the right to make free-standing spas under the name of the venerable outdoor-supply company Coleman.
Having survived the downturn in part by diversifying early — adding gazebos and barbecues at a time when competitors were still making spas — LMS says it plans to add 90 new jobs at its million-square-foot plant by end of 2009 to build new hot tubs. A total of about 250 jobs over the next two years may be added if the Coleman-brand spas sell well, said Casey Loyd, LMS’s president.
But LMS has no guarantee of success. The company faces a marketplace harshly tested by changing consumer tastes and the evaporation of the luxury market.
“They’re pretty sure of themselves to be taking this all on,” said David Wood, publisher of SpaRetailer magazine. “They’re the ones taking on the risk here, not Coleman.”
When it comes to hot tubs, consumers don’t really think about the brand, Wood said, so the Coleman name won’t necessarily spur any sales.
“We ask consumers all the time, ‘What brand do you buy?’ ” Wood said. “Almost 62 percent of people don’t even know what brand of spa they own.”
