Rising default rates, the Bass Pro Shops tie-in: Five things to know about timeshare developer Bluegreen’s IPO

3:34 p.m Tuesday, Oct. 24, 2017  

Bluegreen Vacation Corp., the Boca Raton-based timeshare company, plans to go public again. Five intriguing data points from its IPO filing:

Bluegreen targets middle America. Its resorts are concentrated in what it calls “drive-to” destinations such as Orlando, Myrtle Beach, S.C., Branson, Mo., and Wisconsin Dells. “We primarily serve a demographic underpenetrated within the vacation ownership industry, as the typical [Bluegreen] owner has an average annual household income of approximately $75,000 as compared to an industry average of $90,000,” the company says.

Bluegreen’s customers’ credit scores are a bit lower than average. Bluegreen said 51.9 percent of timeshare buyers who financed their vacation clubs in 2016 had FICO scores of 700 or higher. Among all U.S. consumers, 55.8 percent had FICO scores of 700 or higher as of April 2016, FICO says.

Default rates are on the rise. Bluegreen says default rates rose to 8 percent in mid-2017, up from 6.9 percent in 2015. The company offers this explanation: “Commencing in 2015, it came to our attention that our collection efforts with respect to our [vacation ownership] notes receivable were being impacted by a then emerging, industry-wide trend involving the receipt of ‘cease and desist’ letters from attorneys purporting to represent certain VOI owners. Following receipt of these letters, we are unable to contact the owners unless allowed by law. We believe these attorneys have encouraged such owners to become delinquent and ultimately default on their obligations and that such actions and our inability to contact the owners are a primary contributor to the increase in our annual default rates.”

Bass Pro Shops is a major source of business. Bluegreen runs kiosks in 68 Bass Pro Shops stores, and the fishing chain is responsible for fully 15 percent of Bluegreen’s timeshare sales. Bass Pro shoppers “strongly match our core customer demographic,” Bluegreen says.

Top execs make a nice chunk of change. Bluegreen disclosed pay for three executives. Chief Financial Officer Anthony Puleo made $3.9 million in 2016, former Vice President David Bidgood pulled down $4.3 million and Chief Operating Officer David Pontius made $4.2 million.