After Acquisition, Holiday Diver Is in the Swim

Mar 01, 2002 10:30 PM  By

Holiday Diver, which mails the Divers Direct catalog, in January acquired its chief competitor: Chapel Hill, NC-based Performance Diver.

Terms of the deal were not disclosed, but the acquisition increases Divers Direct’s house file 33%, to about 450,000 names. The Deerfield Beach, FL-based mailer will now have a combined annual circulation exceeding 1.5 million.

By purchasing Performance Diver, whose former parent company, Performance, also mails the Performance Bike catalog, Holiday Diver aims to reach a larger portion of the country’s 2.5 million active scuba divers and snorkelers. According the San Diego-based Dive Equipment Manufacturers Association, the total market for scuba gear is $650 million.

The 136-page Divers Direct catalog, which drops four times annually, sells wetsuits, spear guns, snorkels, and other underwater gear. Holiday Diver’s catalog and Internet business accounts for a quarter of its $21 million in total annual sales. Holiday Diver has seven stores, including three in snorkeling hot spot the Florida Keys, and it will open number eight in Key West, FL, in April.

Customer loyalty and supplier wariness

Capturing customer information at the point of sale from the 750,000 annual visitors to its stores is paramount to Holiday Diver’s multichannel strategy, notes vice president of marketing Charles Whiteman. The company markets primarily to men between the ages of 25 and 40, though women do account for about 35% of its sales.

Holiday Diver is also counting on its Performance Diver Club loyalty program to help build sales and solidify the brand. For every $250 a club member spends with the company, Holiday Diver gives him a $10 awards certificate. Among other benefits, members get half-price air fills for their diving tanks at Holiday Diver stores.

Founded in 1984, Holiday Diver got its name because company founder Wayne Senecal started running scuba-diving trips off Key Largo, FL, from a boat that he docked behind a Holiday Inn. The multichannel marketer began selling online in late 1996 and mailed its first print catalog in fall 1998. Also in ’98, the company moved north to Deerfield Beach because being located in the Florida Keys added a day to product delivery times, Whiteman says.

The catalog “started with no premier brands, offering private-label and second-tier brands,” Whiteman recalls. “None of the major brands agreed to be distributed through the mail.” These suppliers feared that local retailers would retaliate by dropping their product from their shelves. “But as our catalog business began to take shape,” he adds, “we used it as a selling tool to suppliers.”

Since then, a number of major suppliers have warmed to Divers Direct and agreed to be included in the catalog. For instance, manufacturer Mares was featured in the May 2000 edition. Other name-brand suppliers have followed, including wetsuit manufacturer O’Neill, scuba outfitter Dacor, and dive computer maker Aeris. “They just couldn’t ignore the volume we’ve been doing through the mail,” Whiteman says.