Fight through and you'll emerge stronger
01 Oct 2008
I don't think I've ever encountered a more deafening silence in the 'we had a fantastic show and sold x hundred boats worth y million pounds' stakes. Normally the press is bombarded with sales figures from sailing boat and motor boat sellers alike.
But this year with the exception of a somewhat muted claim of '30 Fairline boats amounting to UK £26 million retail deposited sales' the silence has been ominous, bordering on the decidedly worrying. And even the Fairline claim is down on its corresponding offering twelve months ago.
Of course - whether you're a fan of Mr Brown or not - the great pile of financial ordure that descended on the nation's head just before the show was not all his fault. And there's something about the Southampton Boat Show that seems to attract dire outside influences.
Remember Black Wednesday? Or the Twin Towers disaster? Or the queues of worried depositors outside Northern Rock branches? These events all occurred just before (or during) a Southampton Boat Show and cast an atmosphere of gloom over the proceedings.
And then, in 2008, we had the bonus bulging bank boys scurrying for cover as massive financial institutions such as Lehman, AIG and HBOS stumbled beneath the increasing weight of our American cousins' wild retail lending practices and the resulting reduction in inter-bank wholesale lending.
All these heavy blows to consumer confidence are, of course, completely beyond the control of poor old National Boat Shows (NBS). The show organisers could do little more than pray (successfully this year) for fine weather, put a brave face on everything, hope for the best and talk the show up as much as possible.
My first conversation after collecting my Press Pass from the media centre was hardly reassuring. Glyn Foulkes of long established chandlers Aladdin's Cave told me he had just watched a passing lady cast her eyes longingly over a nice new jacket hanging beside his stand. But as she touched it, her husband muttered; 'Don't think about it. My credit's been crunched.' And they shuffled off.
But when I visited Mr Foulkes again towards the end of the show, he was phlegmatic, saying that sales from the stand were only down about 20% compared to 2007, which had been a bumper year. So it wasn't so bad.
Up to expectations
Indeed it is amazing how often phrases such as up to our expectations, we were pleased with the results or business is in line with our targets have taken over from statements of how many boats were actually sold. And positive leads seem to have taken over from firm orders.
But then maybe this is understandable, bearing in mind the unprecedented levels of sales in recent years.
Among the happiest exhibitors were the specialist UK builders: especially in the sailing boat sector. Adrian Jones, sales and marketing director at Falmouth-based Rustler Yachts, told me his order book now stretched to spring 2010.
What's more, thanks to its new factory, Rustler is expanding production of its high value/high quality semi-custom yachts to around one a month. He was definitely delighted with his week in the sun.
Claire Horsman, marketing manager at Itchenor-based Northshore Yachts, had a similar tale to tell. 'We've built two new factories in the last few years', she told me, 'and our annual production has increased from 45 to around 70 yachts. Our delivery dates are now out to September 2009.'
Equally impressive is Northshore's new model programme. Its Southerly 32 first appeared at ExCeL 2008, and the new Southerly 38 made its debut at Southampton. Both these Stephen Jones designs are selling well, and Northshore is aiming to increase its current 40% export proportion by exhibiting at overseas boat shows such as La Rochelle, Genoa, Oslo, Amsterdam and Paris.
Northshore is also following the current trend of building ever bigger boats. A new Ed Dubois designed Southerly 57 is in development and one has already been sold off the drawing board.
It seems this company is one to watch. Its policy of building high value niche market lifting keel yachts definitely works and seems more recession-proof than the 'produce them fast and sell them cheap' approach.
Weak pound
And of course the weak pound has been as big a boon to UK builders as it has been bad news for those who import boats into the UK from Euroland or (to a lesser degree so far) the US.
The US-built Island Packet long keel cruising yachts (sold by Premier Yacht Sales) - a relatively high value brand - also enjoyed a good show. Island Packet's founder (and designer) Bob Johnson flew over to present Premier with the Dealer of the Year award and told me he was pleased that new 460s and 485s had been sold at the show.
Premier also had a good show with its other models, selling the Moody 45DS and several Rob Humphreys designed Elans; including an Elan Impression 514 to one Eddie Jordan. When I said to him I thought he only bought Sunseekers, he replied: 'Yes I do, but a friend of mine has been having a lot of fun on his sailing yacht, so I thought Id get one of these as well.'
Ancasta's new boat sales director Ashley Overton also seemed satisfied with the show. He said: 'Those who have sailing in their blood will still buy; but I think the aspirational sailors are putting things on hold.'
Overton was particularly pleased to have sold eight new Bénéteau Oceanis 37 yachts to leading south coast charter company Fairview, and was hoping to see this fleet grow to 20 boats within three years. I suspect, however, that he was having a less fruitful show selling motor boats; namely the BMBs and Sealines, for which Ancasta is the dealer.
Sue Hardwick (PR person for Sealine) told me the company was in fact very pleased with the show. Sealines throughout the model range had sold, she told me, from the Sealine 29 right up to the Sealine 60ft flagship. And the brand new 47 had been well received.
Ms Hardwick explained that Sealine is increasing its efforts to expand internationally, with new dealers in Russia and Denmark bringing extra volume to export business. But she did concede that the Southampton Boat Show was quieter than last year and sales from the stand were not as high as in 2007. Which is as one would expect, given that 2007 was a great year and that our greedier banking friends have since caused mayhem and insecurity.
Non-greedy
And speaking of banks (of the maritime and non-greedy variety of course), Ian Braham of Lombard Marine Finance was delighted with the show. 'The gradual shift to sail is continuing,' he told me, 'and our new business quoted at the show and our market share are both well up.'
He also said Lombard's new superyacht division was doing well and making a big impact on this robust market.
In common with everyone else I spoke to, he reckoned that big is beautiful and that anyone connected with or supplying to the burgeoning superyacht industry was in pole position.
Should you have any doubt about this, just look at the latest issue of Boat International. It's almost as fat as a phone book, and stuffed to the gills with multiple page superyacht adverts. Its new private equity owner August Equity must be well pleased with its investment; unlike the bankers who funded the amazingly priced buyout of Bavaria a year or so ago and are rumoured to be trying to offload some of the debt at a discount.
And what about the importers of Euroland built boats? To a man, they admitted that previous years had been excellent and that this one was unlikely to be as good.
The shift in exchange rates between the euro and the pound has put a good 15% onto last years UK selling prices. And then one has to add current customer insecurity into the equation.
One major importer (Southern Motorboats) had already gone under before the show opened, which put around 20 stock boats onto the market: presumably at fire-sale prices. So the omens are not good.
But despite all this, sales were reported: albeit frequently in single figure numbers. Peter Thomas of Hanse Yachts said he was still selling boats, and stuffed a freshly signed order and deposit cheque under my nose to prove the point. He ended the show with 14 boats sold.
Like several other sailing boat dealers, he said he was seeing an increasing number of motor boats being offered to him in part exchange. So either some motor boat owners are suddenly being attracted by sailing (and free wind), or they just want to abandon motor boating before the new diesel prices hit their pockets.
Perceived value
The only problem, he said, is that the perceived value of the motor boats being offered to him as trade ins often represent too high a proportion of the new sailing boat's price. And this does not make a part exchange deal viable. But at least the weak £ has made it far easier to sell brokerage or trade-in boats (especially Hanses) to Euroland bargain hunters.
Richard Hewett and Johnny Cochran of Clipper Marine (Bavaria distributor) were finding much the same thing. They too said they were being offered motor boats in part exchange for new sailing boats; and were pleased that the new Bavaria 43 had been well received and had sold.
And in general they said the bigger boats in the range were selling better than their smaller sisters. Clipper Marine had also taken over the dealership for the Italian-built Azimut range of motor yachts (previously handled by the short lived new Opal, set up around a year ago) just before the show started and was delighted to have already sold a 45 and a 58. Not bad for the first week's work.
Rob White, of Toppers, succeeded in cheering me up a bit. While middle England boaters might be behaving cautiously when it comes to bigger purchases, he said he had not seen any slowdown in orders for his budget rotomoulded sailing dinghies.
Topper was signing up new overseas dealers and boats were being sold by the container-load. Which does not surprise me, given the weakness of the £ and the hordes of rotomoulded dinghies pouring into all the sailing schools liberally spread around the beaches of France. Not to mention the active sailing clubs run by holiday companies all around the world.
These are growing markets, and the British rotomoulded dinghies are among the best in the business.
So what lies round the corner? As a boatbuilder over a 30 year period, I have experienced a few sticky times. And it seems that sticky times are here again. With the exception of the buoyant superyacht market (and maybe even the super rich might eventually feel the pinch), commercial life in the marine trade is unlikely to get easier in the short term.
Level is the new up
One experienced boatbuilder told me that in the USA, people now said 'level is the new up'. But that does not mean that there is no business to be done.
Those who manage to cut down inventory will be more secure financially. And those who up their marketing efforts and maintain (or even increase) their advertising spend will have a chance to grab a bigger slice of the market that remains.
On the other hand, those who put up the shutters and cut their marketing budget will surely suffer. But then, 'twas ever thus.
Tighter times might cull a few weaker companies, but those who fight through will emerge all the stronger.





