Pool Fence DIY has fast become one of the most popular fencing products for Do-It-Yourself pool owners. The product touts itself as a super easy installation for homeowners looking for a relatively simple pool fence. With slick advertising commercials featuring an Amish family of homeowners with a swimming pool (you have to suspend disbelief a bit), the marketing is very entertaining to say the least. It takes a whimsical approach at branding while not projecting the tragedies of drowning that come from failing to properly secure the pool area.
With a positive score of 4.5 out of 5 stars on Amazon and very few consumer complaints, the consensus from pool owners is that Pool Fence DIY is actually a pretty decent product. It’s enormously popular and is regularly sold on Wayfair, Home Depot, Walmart, and Overstock. Pool owners looking to construct a pool fence on a budget have few high quality options to choose from. The one chief complaint that consumers seem to have is that it feels flimsy. Given that the product is constructed of a woven nylon mesh and a few steel bars, that’s not suprising. It’s meant to be able to be disassembled and quickly installed. The company itself provides a series of instructional videos to make the fence a more fixed structure.
As far as more traditional pool fences are concerned Pool Fence DIY is not an intraversable security fence. The product itself is meant to present a barrier, particularly to smaller children who may accidentally wander into the pool area. As a means of deterring family pets and animals from wandering into the pool, it probably performs just as admirably.
To be clear, this product is meant for homeowners operating on a budget. This fence system is ideal if you need to secure your pool area, but aren’t necessarily looking to shell out thousands of dollars on a permanent pool fence. The system starts at around $100 for each 4×12 section of the kit. For your entire total cost, you’d first need to calculate your pool area.
For more higher end pool fencing systems, you can typically expect to pay anywhere from $5,000-$10,000. As budget friendly options, this is a good alternative for homeowners looking to stay in compliance with local pool fence rules and regulations.
PoolCorp Acquires Pinch A Penny
This month we’ve seen a blizzard of high-profile acquisitions. Recently, PoolCorp agreed to buy Porpoise Pool & Patio Inc. and its primary operating companies, Pinch A Penny Inc. and Sun Wholesale Supply Inc.
The entire specifics of the agreement were not disclosed.
With approximately 260 independently owned and run franchised stores in Florida, Texas, Louisiana, Alabama, and Georgia, Pinch A Penny Inc. is a large franchisor of pool and outdoor living-related specialty retail stores in the United States. Sun Wholesale Supply Inc. sells mostly to Pinch A Penny franchisees and is a wholesale distributor of swimming pool and outdoor living products, as well as a specialty chemical packaging facility.
“I understand it will take some time for things to set in. I’m still processing it myself,” John Thomas, president and CEO of Porpoise Pool & Patio Inc., told associates in a memo. “Pinch A Penny has been an integral part of my life for 47 years. I’ve spent the past 30+ years of my adult life leading our company, so, I understand that processing this information will take some time,” he said.
Fred Thomas, a traveling salesman, originally started Pinch A Penny in 1974 when his son John was just eight years old. By 1995, John Thomas had been named president of Pinch A Penny, and he has overseen the company’s expansion.
“This acquisition secures a stronger future for our companies. And, it puts our business in alignment with an excellent strategic partner in our industry, one which can create greater success for everyone,” the memo from Thomas reads. “In short, it is the right time for Pinch A Penny to start a new chapter, and for my family to step aside and allow Pinch A Penny to become something more.”
Porpoise Pool & Patio’s well-established client base, distribution capabilities, chemical packaging operation, operational success, and the “growth-oriented Pinch A Penny brand” were all highlighted by PoolCorp. (Nasdaq/GSM: POOL) executives in making the transaction.
In a statement, PoolCorp. president and CEO Peter D. Aryan said, “The addition of the Pinch A Penny franchise network to PoolCorp.’s North American distribution business brings substantial growth and operating synergies for both existing independent retail customers and independent franchisees.”
According to The Tampa Bay Business Journal, Pinch A Penny had $387.3 million in revenue in 2020 and 2,775 workers. PoolCorp., based in Covington, is the largest wholesale distributor of swimming pool and garden items in the world. The company operates 410 sales centers across North America, Europe, and Australia, and distributes around 200,000 items to almost 120,000 wholesale customers.
Pool Corp has been concentrating on revenue growth. It is growing into new geographic areas, expanding in existing markets, and launching new product categories that are expected to increase its market share. In order to achieve this, the corporation has attempted to expand through various acquisitions. In February, September, and December 2020, the company completed three acquisitions: Master Tile Network, Northeastern Swimming Pool Distributors, and TWC Distributors. Jet Line Products, Inc. was bought in October 2020, giving the corporation three facilities in New Jersey, three in New York, two in Texas, and one in Florida. Pool Corp is also absorbing TWC Distributors, bringing the total number of sales locations in Florida to nine.
The company has launched ten new locations so far this year. In the third quarter of 2021, Pool Corp also conducted two strategic buyouts. In June and April of 2021, Vak Pak Builders Supply, Inc and Pool Source, LLC, respectively, were purchased. Acquisitions provided 5% to quarterly sales growth and 7% to year-to-date performance in the third quarter.
Fiberglass Resin Shortage Affecting Manufacturers
The global covid-19 pandemic brought about many changes in the pool industry. Currently, there is shortage of many essential parts and supplies for swimming pools. More aspiring pool owners are getting disappointed by the day. Manufacturers have enormous backlogs of pending orders. But why has their been such dramatic and sudden slow-downs of inground pool construction during the height of the season? One of leading causes among fiberglass builders this season has been slow delivery of shells which has a direct correlation to ongoing resin shortages.
Understanding the fiberglass resin shortage at an in-depth level
As mentioned earlier, there has been a delay in pool construction due to a shortage of fiberglass resin material. As a result, the prices of liquid vinyl ester resin and fiberglass have significantly gone up. Subsequently, many fiberglass manufacturers are turning down shell orders amid the high demand for fiberglass pools nationwide and a lack of raw materials to facilitate orders.
Pool Magazine received word from numerous builders that they had been notified by Latham that shell deliveries would be delayed up to 8 weeks because of ongoing shortages. We reached out to America’s largest manufacturer of fiberglass inground pools to see how they are handling the ongoing resin shortage.
“Latham’s manufacturing facilities remain open and operational.” said Crist Leigh Wunsch, spokesperson for Latham, “Homeowner interest in our products is stronger than ever, and our teams are working hard to meet the increased demand. We are facing intermittent raw material shortages, along with the rest of our industry, which has resulted in some temporary manufacturing inefficiencies at our facilities.”
“We have been leveraging our strong relationships with our suppliers to navigate this issue,” continued Wunsch, “and we have looking at alternative resin sources to continue to diversify our supply chain. Despite this, Latham continues to deliver solid growth. The strong underlying secular trends of our industry remain intact, and we feel well positioned to continue to meet growing consumer demand for pools.”
Manufacturers Everywhere Are Feeling The Pinch
Kent Wooldridge, president of the United Marine Manufacturers Association, says, “Indisputably, it is extremely painful to turn down orders from loyal clients. Telling pool owners that they have to halt their businesses just because you cannot supply them with the required raw materials is hard. Even worse, you cannot refer them to another person who can offer them the appropriate raw materials. In addition, those who have these materials sell them at crazy prices.”
“The majority of suppliers are overburdened by the fiberglass shortage. The winter storms that damaged the chemical plants producing resin were therefore a big disaster.”president of board manufacturer Aipa Surf Co, DUKE AIPA
Have raised import tariffs made the shortage situation worse?
Usually, the United States is responsible for producing only a tiny fraction of fiberglass cloth. The country mainly relies on affordable fiberglass supplies from China. However, since Trump’s administration, there have been obstacles preventing the smooth import process. In particular, since 2018, a 25% import tariff was placed on fiberglass cloth and resin. This discouraged most manufacturers from importing fiberglass. On the flip side, Chinese manufacturers raised their export prices.
In 2020, the coronavirus outbreak made the supply chain worse due to travel restrictions. The lockdown also forced Chinese chemical plants to shut down. At the same time, there was increased demand for pool construction services since most homeowners were looking for ways to upgrade their backyards.
The effect of natural calamities on fiberglass resin shortage
This year, the winter storm in Texas disoriented a broad spectrum of activities in the pool industry. The freezing weather conditions forced the chemical manufacturing plants in Houston to shut down. Moreover, the storm forced Hexion Inc and Olin Corp., the biggest epoxy producers, to stop operating.
Manufacturers report that once they finally get a truckload of resin, it doesn’t stick around very long. It’s already earmarked for a back-order. In fact, in most instances, all the resin coming in has already been pre-sold. This has been the situation for the past few months.
Are manufacturers affected?
Kirk Sullivan, a Florida pool builder, had to refund 250 orders due to the fiberglass resin shortage. Sullivan says that he received very few supplies this year during the summer. Therefore, his company has been unable to continue taking new pool construction orders. Fortunately, all his staff members are still at work, hoping for things to get better.
Regional manager, Todd Prestage, says, “Before, it used to take approximately six weeks to get a Surf Hardware International Board. Now, it takes six months.”
Several fiberglass manufacturers have tried solving this issue by importing a more significant percentage of raw materials from Asian countries that don’t incorporate high import tariffs. But they still find themselves raising their prices due to all the labor and shipping costs involved. Consumers, on the flip side, have no other choice but to pay more.
The bottom line
Other than taking longer to reach consumers, prices for resin have skyrocketed. Consequently, very few pool companies are finding it easy to adjust. One Latham Grand Dealer we spoke to said, “The resin shortage is making it more difficult for smaller companies like ours to get shells and obviously it’s been costing us all sales. The big guys are fortunate since they have guaranteed delivery based on their order flow”
One thing is for absolute certain, as the summer begins to wind down, this industry certainly has it’s work cut out toward improving the supply chain issues that have hindered so many this pool season.
Latham is Going Public
Latham announced its intentions to go public. Will begin trading under “SWIM” stock symbol…
A new pool corporation will be listed on the stock exchange very soon and it’s a name we all know well. Latham – The Pool Company™, filed a notice with the Securities and Exchange Commission announcing its intention to sell its common stock in an initial public offering.
Under the ticker symbol SWIM, the Latham Group has applied to list its stock on the Nasdaq Global Select Market. Complete details about the offering and it’s terms are not yet known at this time.
The news of Latham’s intention to go public comes a month after Hayward, one of the “Big 3” manufacturers, made a similar announcement.
Latham, The Pool Company™, as it is now known was formerly known as Latham Pool Products.
Latham’s private equity partners, Pamplona Capital Management and Wynnchurch Capital, will hold more than 50% of the voting power of the company’s outstanding common stock, rendering the Latham Group a controlled company excluded from some corporate governance provisions.
Latham outlined a strategy to increase the overall market share of fiberglass among inground pools, change how customers access the company’s products, improve distribution capabilities across the United States, and expand internationally while discussing the company’s strengths and benefits.
Latham Moves Into Lead Generation
With a new emphasis on direct digital and social-media marketing, backed by a demand-aggregation platform, Latham has made serious inroads to market directly to consumers. Consequently, this has enabled them to feed more pool leads to their dealer base. According to Latham, the company delivered over 45,000 customer leads to its dealer base in 2020, the first year the plan was fully implemented. According to the group, this represents a 210% increase from 2019.
The company also referenced it’s size, claiming that its network of nine fiberglass pool factories and distribution centers allows it to supply fiberglass pools to 95 percent of the US population within just 48 hours.
Latham has increased its market share in the fiberglass pool industry over time by purchasing a number of existing manufacturers. Three recent transactions were mentioned in their IPO application. Latham believes this will help it position itself well in the future.
Recent Latham Acquisitions
The acquisition of Narellan, an Australian fiberglass pool manufacturer with operations in Canada and New Zealand, in 2019 bolstered the company’s foreign presence. According to Latham, foreign markets account for 19% of its revenue, with Canada, Australia, and New Zealand having the most representation. According to Latham, the company is still on the lookout for emerging markets.
At the very least, the Narellan acquisition is expected to help Latham extend its footprint in North America by increasing fiberglass penetration. Narellan, as Australia’s largest manufacturer of fiberglass pools, played a key role in the increased acceptance of fiberglass over the last two decades in Australia, where the segment now accounts for 70% of the pool industry, according to Latham.
“Leveraging insights gained from Narellan, we are investing to build the tools required to drive higher fiberglass penetration in the North American market,” Latham said.
It also mentioned that the acquisition of vinyl-liner and safety-cover manufacturer GLI in October 2020 has expanded its offerings in those categories.
In October, the company entered into a long-term strategic relationship with Premier Pools & Spas, acquiring a 28 percent equity stake in the pool-construction franchise. The company said, “The purpose of this investment in Premier Pools & Spas is to help expand our sales and distribution channels,”
In the future, it intends to form more strategic alliances with dealerships. “We believe these exclusive relationships will continue to enable us to increase market share at the expense of the fragmented and regional universe of competitors,” Latham said.
In North America, Australia, and New Zealand, Latham claims to be the largest builder, manufacturer, and marketer of in-ground residential swimming pools. It claims to have 32 locations, hiring over 2,000 people, and selling more than 8,700 fiberglass pools in the United States in 2020.
Although “net income does not adhere to this trend.” said Latham, 2020 represented the 11th consecutive year of net sales growth and adjusted EBITDA margin expansion. According to the group, net revenues were $403.4 million in 2020 and net income was $16.0 million.
Last year, vinyl liners accounted for 20% of Latham’s sales, covers for 21%, and fiberglass and vinyl-lined pools for the remaining 80%. The remaining 59%, according to the company, came from fiberglass units.
Featured Photo Credit: Albany Business Review
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