Signs of the times: Furniture store, RV dealer latest economic victims

By JOHN HOLLAND
jholland@modbee.com

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An economy rocked by staggering fuel prices and a moribund housing market has claimed two more businesses -- Dan Gamel's RV Centers and RoomSource Furniture & Accessories.

Liquidation sales are under way at both chains, including Gamel's dealership in Salida and the RoomSource store on Sisk Road in Modesto.

Gamel said Tuesday that high fuel costs have made people skittish about buying recreation vehicles, even though this mode of vacationing still is relatively cheap.

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"We're going to liquidate this inventory and close our doors because financially this doesn't work," he said.

The chain, based in Fresno, has six locations in the Central Valley. Gamel said he did not know when they will close. He held out the possibility that some sites could remain open if financing comes through, perhaps for RV servicing or storage. He said he hopes to know the outcome in a few months.

The Salida Boulevard dealership opened in 1987 and has about 50 employees. As of Tuesday, about 130 vehicles were for sale on the lot at discounts of up to 50 percent.

Gamel, who sold the company in 2005 and reacquired it early this year, said he has had trouble getting banks to lend him working capital.

RoomSource, which also has six valley locations, filed for Chapter 11 bankruptcy protection last week in Sacramento.

Calls to RoomSource's corporate office in Sacramento were not returned. But Jim Schaye, president and chief executive of Hudson Capital Partners, an asset liquidation company assisting RoomSource, said the troubled economy hit it hard.

In its bankruptcy filing, the company listed assets in the $1 million to $10 million range and liabilities in the $10 million to $50 million range. It employs about 200 people.

RoomSource joins several home-furnishing stores that have closed in the past year, including Levitz Furniture in Modesto and Youngdale's, an appliance store in Turlock. Linens 'n Things in Modesto is expected to close soon.

Fuel spike is death knell

Gamel rode a yearslong boom in RV sales, serving people happy to pay into the six figures for the homes on wheels. But the industry has plunged as fuel prices topped $4 a gallon this year.

"I'm not really shocked by it, but I'm sad," said Gamel customer Roy Haury of Patterson upon hearing about the pending closure.

He said the fuel spike has prompted him to greatly shorten the trips he takes in his 31-foot Flair.

"I used to go cross-country, but that's past tense," he said.

Darrel Friesen, president of the California Recreation Vehicle Dealers Association, said RV sales in the state are down 40 percent from a year ago.

He said fuel prices are partly to blame, and loans are harder to get because of declining home equity and tightened lending standards.

Friesen said the RV business seems to slack off in presidential election years, with consumer moods souring amid the "gloom and doom" talk from candidates.

Gamel said he has tried to show consumers that RV travel remains a bargain. A typical 200-mile trip costs only $25.20 more in fuel than it did last summer, he said, and lower interest rates have reduced monthly payments on the vehicles.

"I know this is a great way to vacation for families today," he said.

The Sacramento Bee contributed to this report.

Bee staff writer John Holland can be reached at jholland@modbee.com or 578-2385.