With purchase of Catalina Spas, manufacturer leapfrogs years of product development
By Megan Kendrick with reporting by Lawrence Scofield
Boyd Cargill began Catalina Spas in 1978. “He started with boats and worked his way into spas 25 years ago,” says Carolyn Brazil, Cargill’s daughter and former CEO of Catalina Spas.
In November, the Perris, California–based company was purchased by LPI Inc., a hot tub manufacturer in Johnson City, Tennessee. LPI loaded about 40 truckloads of equipment at the end of December and hauled it back to its plant, 2,400 miles away. The company even got key Catalina personnel to move from the coast to the Tennessee mountains.
“We moved over a two-week period,” says Dave Hatley, CEO of LPI. The company tried to get their dealers stocked up on spas before the factory was shut down. “We were down about six weeks overall, so it wasn’t the end of the world.”
It was no easy task to integrate the Catalina line into the existing factory space. LPI, which manufactures the Signature Spas brand among others, spent six weeks prepping its facility and installing cranes, production lines and conveyers to handle the new capacity. It was using about 280,000 square feet of its 318,000-square-foot building before adding Catalina.
“We never anticipated doing this type of volume,” Hatley says. “For instance, the Catalina 21-foot swimmer won’t even fit down our aisles. We never thought in a million years we’d need a 21-foot aisle to drive through. We thought 12 feet was sufficient. Those types of things we’ve had to work around.”
Hatley wanted the existing Catalina dealers to see no changes in the quality they’re accustomed to, even if that meant a more expensive manufacturing process. “Their spas are built like tanks,” Hatley says. “They’re overengineered to something serious. We kept that design. It’s not efficient, the labor is outrageous, some of the ways they do it is overkill, but that’s what their dealers love.”
LPI will, however, pare down the number of Catalina swim spa models it makes, which was about 19 actual models — 40 or more depending on requested features and customization. “We went back and looked at what they were selling and what they weren’t selling,” Hatley says. “A lot of those models had a different purpose and sold pretty well. So we kept the majority of them.”
Cargill took an old-school approach to his swim spa design, hand-making the molds in his shop. Hatley says the 85-year-old Cargill probably doesn’t get the credit he deserves for his innovations in the market.
“His integrity was at the top,” Hatley says. “He’s done some genius things with the design. We can take it to the next level from a POP and support standpoint.”
The purchase allows LPI to fast-forward into the swim spa market. “We’ve done swim spas, but we never really focused in that area because it takes a tremendous amount of effort to be a serious player,” Hatley says. “From a tooling and design perspective, it would take years to get to where Catalina was.”
Catalina also came with a loyal dealer base, the likes of which Hatley says he’s never seen. “These Catalina dealers are very embedded into Catalina — the name, the brand — their business is built around it,” he says.
Any changes to the line will come slow and with early input from the dealers. “We want to get our feet wet,” Hatley says, adding that it has plans for improvements and new designs. “But these next six months are about figuring out how to make this stuff and keeping the dealers happy.”