Big Retailers Take Plunge on Home Spas

Sears, Roebuck took a decidely cautious approach earlier this year when it started selling spas made by Carlsbad-based Watkins Manufacturing.

“We’re talking about a product that combines water and electricity, and our first concern is the consumer,” a Sears spokesman said last week.

Consequently, Sears, which put the Underwriters Laboratory-listed Watkins spas through its own harsh testing laboratory, plans a second series of tests this summer.

“The exposure through Sears is a pretty important thing for the spa business in general,” acknowledged President Jon Watkins, who has been trying to have his products sold through Sears since he founded the company in 1977.

Sears, which offers Watkins-manufactured spas through its Houston, Oklahoma City, Amarillo, and Sacramento stores on a test-market basis, is not the only mass marketer getting its feet wet in the spa market.

Watkins said the privately held company, with anticipated sales of $25 million for the year ending June 30, also sells its products through the Price Club and the Atlanta-based Home Depot, which cater to the “do-it-yourself” market, mainly in the Southwest.

Watkins and El Cajon-based Caldera Spas, which reported $6 million in sales during 1984, are making a conscious effort to get their wares sold through the nation’s mass marketers.

“A spa store can be a very lonely place unless someone comes in to buy a spa,” according to Steve Hammock, Watkins’ marketing manager. “But you get a lot of foot traffic in a mass merchandising outlet which will lead to more sales.”

Caldera, which manufactures spas, tubs and “jetted” bathtubs, reported that its products are carried by a warehouse retailer in Seattle that Vice President Brian Roble said “should give us a strong foothold in the Pacific Northwest.”

Roble said Caldera products are sold in 18 San Diego retail stores and nearly a dozen swimming pool and spa wholesale stores in the Southwest, as well as through distributors and assemblers around the country.

“We do probably less than 1% of our business in San Diego County,” Hammock acknowledged. “But we’ve got a dealer in Sacramento who handles a couple of hundred spas a year, and a guy in Texas who does a couple hundred. We also do well in places like Columbus (Ohio), Detroit and Jacksonville (Fla.)”

Watkins and Caldera are not forsaking the smaller retail outlets that sell the bulk of their hot-water products. Although Watkins relies on 400 dealerships--including the wife of a corporate executive who sells a handful of spas each year from her Grand Rapids, Mich., home--it is actively courting the major retailers.

That national presence is increasingly important in an industry that has attracted national companies, including Kohler, a producer of plumbing fixtures, and Coleman Co., a manufacturer of outdoor recreation goods.

“I’d say it’s now a half-billion-dollar market,” said Len Gordon, president of the Len Gordon Co. in San Fernando, who is generally credited by the industry with introducing modern spas in the late 1960s.

Gordon, who said “hellacious” distribution and shipping costs associated with completed spas pushed him out of the spa-building business several years ago, now manufactures hardware used in spas.

But the same hellacious costs seem to be helping regional competitors such as Caldera and Watkins survive, because even financially strong firms find it hard to deal with distribution and transportation costs.

“There are some major people getting into it--manufacturers in New England, the Pacific Northwest and all along the Atlantic Seaboard,” said Gordon.

Some of those regional firms get gobbled up by better-capitalized companies.

Coleman, for example, recently acquired California Cooperage, a veteran San Luis Obispo tub manufacturer. Gerico, a longtime Huntington Beach manufacturer, was recently purchased by a national shower stall and bathtub manufacturer.

Another sign of the industry’s growth came in January when Harcourt Brace Jovanovich Publications purchased the rights to publish Spa and Sauna Trade Journal and Hot Water Living, a consumer-oriented magazine.

Still, “no one company dominates America as far as sales,” said Roble, who explained that “obviously, 90% of our sales come from the Southwestern states, and obviously, our strongest market is San Diego.”

Unlike Watkins, which manufactures only spas, Caldera has added whirlpool, or jetted, bathtubs to its line.

As a result, Caldera is trying to forge links with area home and condominium builders who are including jetted bathtubs in new homes.

“They’ll be putting (jetted bathtubs) in as a standard item,” said Roble, who expects jetted tubs to approach the “one in every home” status of garbage disposals or microwave ovens.

Hammock doesn’t think that spas will become that ubiquitous until the nation’s consumers--and the mass marketers--get a better understanding of what spas are and how they are used.