Dear Sir,
The recent demise of BA Peters came as a shock to many in this industry – a major player falling by the wayside. However, speaking as one who has been in the industry since January 1973 – this is not the first time this has happened.

In 1978, Westerly Marine Construction Ltd, at that time one of the five top yacht manufacturers in the world, also went into receivership. It is interesting to note that David Sanders, the then MD, was also president of what was then the SBBNF.

This was the start of a long decline in British yacht (sailing boats) manufacturing which has never recovered the same volumes achieved in 1977.

This time it is a distributor rather than a manufacturer. However, what is the true difference? In my early days British manufacturers did most of their own retailing within the UK, today that role has been taken over by distributors and appointed dealers who, to a certain extent, act as a buffer between the two.

We will perhaps never know the true reasons for the fall of BA Peters, however what was fact was the substantial stock situation of over 90 unsold boats. Why so many boats unsold? A decline in the market, bad sales techniques or over stocking?

Having dealt with manufacturers as a selling dealer for many years, I know the pressures put on dealers by their ever-increasing demands for more sales. This is directly related to their wishes to increase annual output. The phrase, “If you do not increase your annual dealer commitment you will no longer be our dealer etc etc” comes to mind.

Yes the market may well have fallen – but combine this with the dealer trying to keep up with the manufacturer’s demands, he then has to cut his sales margins to the bone in order to achieve more sales. We now see the results.

So the manufacturer could equally be at fault by not taking note of market conditions and, more importantly, his dealer’s stock situation.

Certainly within the UK it has been quite obvious in certain size brackets over the past 18 months, that production has exceeded demand. More and more manufacturers have not only increased production but also expanded their model line to compete against others catering for an already over supplied sector.

Other factors within the British sector of the marine leisure industry relate directly to sales margins. My own belief is that this industry cannot continue its present paths without further major fallers.

We happily pay our local car dealers £60 per hour plus to have our car serviced, yet we continue to charge our boat owners under £40 per hour. We continue to spend vast amounts of money at two major boats shows a year, when even the much larger car industry can only afford one.

We accept small trade discounts from manufacturers, pay too much for trade in’s and give customers amazing but foolish discounts.

If we come out with a 2.5% net profit before tax we think we have done well. Even then we do not re-invest those profits for future down turns. Some believe a 15% gross profit margin is good – believe me it is not – it is in fact a loss!

Fortunately after 35 years in this industry, I may with luck be able to retire in a few years without being forcibly retired by Receivers.

The question is, will we as an industry take note of this warning. Past history says no – we are even now talking about yet another annual major boat show!

Yours faithfully,
David de Vere
Managing Director
Bates Wharf Marine Sales