Boats.co.uk team up with Princess

Deleted User said:
Nothing, I think is the answer to that but I guess that Princess have calculated that any potential PMYS sales lost to BCU will be more than balanced out by an increase in sales that a company like BCU can bring in and not only that, some of the p/x liabilities will be taken by BCU rather than PMYS. Maybe what's in it for PYMS is that BCU can help them shift some of their incoming p/x boats? I can imagine that BCU are a whole lot more skilled at that
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I think that's bang on the money - PMYS brokerage / direct will be helped by a huge amount here with trade-in and brokerage, the PMYS aftersales team is growing in house now too (from 3rdparty use), and I would imagine PMYS will cover poole sales and BCUk the east coast and Cala d'Or possibly.

The new volume will build up the in house after sales team so all round growth

As an aside the Fairline Southampton office was stripped at the w/e so getting ready for the BMYS in may and Bates W/ Fairline UK
 
I don't think Fairline saw this coming when they made the decision to out EBY and this has now proved to be a costly and commercially negative move on Fairlines behalf. Maybe Fairline assumed that PMYS had the monopoly on Princess sales so there was no danger of EBY taking on that brand and coverting many customers.

BCUK have a new V39 on brokerage which has always looked a bit odd, was this planted there do you think in an effort to give a hint to Fairline of what's going on in the background and to say you need to watch out as we are going to get our own back?
 
Deleted User said:
...increase in sales that a company like BCU can bring in and not only that, some of the p/x liabilities will be taken by BCU rather than PMYS.
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For both Princess and PMYS, this is about selling more boats. BCU are extraordinarily good at selling boats, using their infrastructure and their outstanding customer service and the fact they're all-round nice guys to deal with. Remember, Princess need to sell more boats and make more money. Despite all the press releases about "profit", they need to do more. The management equity looks significantly underwater.

Deleted User said:
Ouch just like Peters used to be for Fairline? I wonder how long that will last?
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No reason for it to be like Peters. You're just being negative!



Deleted User said:
... the appointment of BCU must be a concern for them
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I repeat, PMYS are a party to this deal. It's their deal as much as BCU's. If unhappy they wouldn't have done the deal
 
mjf said:
PMYS will cover poole sales and BCUk the east coast and Cala d'Or possibly.

The new volume will build up the in house after sales team so all round growth
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No way imho. There is no "east coast". BCU customers will buy princesses on terms they get what BCU have always delivered in the past, which is after sales support from the BCU team. BCU customers will not be farmed out to PMYS folks. I'm not saying PMYS are bad by the way; they're not. It's just that BCU are better
 
yep you are right - i have re read the e mail they sent earlier today that says

Under the arrangement, Boats.co.uk will operate as Princess East
Coast, providing sales, part exchange and aftercare support for
potential clients in Poole and the English East coast.
 
jfm said:
No reason for it to be like Peters. You're just being negative!
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As a dealer you resent another dealer skimming off a %, however small, of the meagre margin that you make on a hard won sale, especially when that other dealer has done feck all to earn it! I give this arrangement 2yrs tops after which BCU will be agitating to get the whole margin. From Princess's point of view it's great because it creates competition between both dealers although I'm not sure that PMYS will see it that way

Yup I'm sure PMYS were party to the agreement but I guess not willingly;)
 
Deleted User said:
As a dealer you resent another dealer skimming off a %, however small, of the meagre margin that you make on a hard won sale, especially when that other dealer has done feck all to earn it! I give this arrangement 2yrs tops after which BCU will be agitating to get the whole margin. From Princess's point of view it's great because it creates competition between both dealers although I'm not sure that PMYS will see it that way

Yup I'm sure PMYS were party to the agreement but I guess not willingly;)
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Another more positive Spin, maybe PMYS makes their profit on larger yachts and UK based smaller yachts is not their sweet spot. BCU are very good at this size.
 
Deleted User said:
As a dealer you resent another dealer skimming off a %, however small, of the meagre margin that you make on a hard won sale, especially when that other dealer has done feck all to earn it! I give this arrangement 2yrs tops after which BCU will be agitating to get the whole margin. From Princess's point of view it's great because it creates competition between both dealers although I'm not sure that PMYS will see it that way

Yup I'm sure PMYS were party to the agreement but I guess not willingly;)
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Mike I think there will be more to it than just that, and less problem than you see. It's sensible to share margin if, just for example, one party has stocking costs or commitments and the other shifts the product. Likewise the Princess/PMYS margin must (I'm just guessing) pay for the enormous overhead that PMYS's structure/workforce creates - Essex is a MUCH leaner operation so they don't need all that margin. Plus PMYS have whatever distributorship rights they have for an attractive product, and must be rewarded for that. And imagine a case where PMYS is committed to X units of model Y and cant sell them but Essex can. PMYS might well forgo all their margin if Essex take the boat. As you can imagine, there are 100x such scenarios and with sensible people either side of the table these things get dealt with rationally

I think you're wrong on the "not willingly" thing. I would guess messrs Whale+Whale like this deal and I'm not sure how they could have been dragged anyway. If BCU migrate their Fairline customers to Princess boats (and the subset of Fairline customers on here seems to indicate that will be ok) and find a few new ones then that is incremental for all three sides

For us boaters as a whole though the risks to Fairline here are bad imho. At a macro level we do not want an oligopoly of two players, Princess and sunseeker, supplying our genre of UK boats. We need at least 3 UK builders to have the right competitive tension and pressure in the Uk market
 
As always, JFM is the voice of reason


jfm said:
Mike I think there will be more to it than just that, and less problem than you see. It's sensible to share margin if, just for example, one party has stocking costs or commitments and the other shifts the product. Likewise the Princess/PMYS margin must (I'm just guessing) pay for the enormous overhead that PMYS's structure/workforce creates - Essex is a MUCH leaner operation so they don't need all that margin. Plus PMYS have whatever distributorship rights they have for an attractive product, and must be rewarded for that. And imagine a case where PMYS is committed to X units of model Y and cant sell them but Essex can. PMYS might well forgo all their margin if Essex take the boat. As you can imagine, there are 100x such scenarios and with sensible people either side of the table these things get dealt with rationally

I think you're wrong on the "not willingly" thing. I would guess messrs Whale+Whale like this deal and I'm not sure how they could have been dragged anyway. If BCU migrate their Fairline customers to Princess boats (and the subset of Fairline customers on here seems to indicate that will be ok) and find a few new ones then that is incremental for all three sides

For us boaters as a whole though the risks to Fairline here are bad imho. At a macro level we do not want an oligopoly of two players, Princess and sunseeker, supplying our genre of UK boats. We need at least 3 UK builders to have the right competitive tension and pressure in the Uk market
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Deleted User said:
Good question and I've never understood it either. Personally I won't work for a manufacturer unless we have exclusive rights for the whole of the UK and Ireland.
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How would this territorial conundrum be likely to be resolved if - as may happen with motor yachts - the buyer is resident in UK but the boat will be kept in the Med?
 
benjenbav said:
How would this territorial conundrum be likely to be resolved if - as may happen with motor yachts - the buyer is resident in UK but the boat will be kept in the Med?
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"The med" being several countries/dealer territories. JRudge and Milo on here have recently taken delivery of new sq65s in South Mallorca but don't plan on necessarily staying there even for the rest of season 1
 
Not my part of the pond..or even same pond, but what does it matter how many UK builders there are,just out of interest.Is it not a global market?If ukboatbuilders.com sell 1000 boats,why does it matter how that is spit? It is either world competing class, or is not. Yes,I would like UK to have a successful boat building industry, but I am not understanding why that needs to be one,two,three,four builders?
 
So that there is competitive tension, not an oligopoly in which suppliers can demand a lazy price premium
I realise UK shoppers can buy ferrettis or Azimuts, and that sunseeker/Princess in part sell to the international market, and thay are counter arguments. But many UK buyers prefer to buy UK built boats from UK dealers for lots of good reasons
 
Mike I think there will be more to it than just that, and less problem than you see. It's sensible to share margin if, just for example, one party has stocking costs or commitments and the other shifts the product. Likewise the Princess/PMYS margin must (I'm just guessing) pay for the enormous overhead that PMYS's structure/workforce creates - Essex is a MUCH leaner operation so they don't need all that margin. Plus PMYS have whatever distributorship rights they have for an attractive product, and must be rewarded for that. And imagine a case where PMYS is committed to X units of model Y and cant sell them but Essex can. PMYS might well forgo all their margin if Essex take the boat. As you can imagine, there are 100x such scenarios and with sensible people either side of the table these things get dealt with rationally
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Mmm, I understand the logic of that but according to PMYS latest published accounts, they made a gross margin of 5.9% (and lost £2.2m). Thats a very small margin especially with the high marketing and warranty costs associated with the boating industry and much of it will be swallowed up with stock financing costs anyway. I can't see PMYS and BCU being happy to share such thin margins. Yes there can be a strong logic to working with other dealers to shift product but the margins have to be strong or the volume high to justify that and I don't see either of those in the boat sales market

If BCU migrate their Fairline customers to Princess boats (and the subset of Fairline customers on here seems to indicate that will be ok) and find a few new ones then that is incremental for all three sides
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Well its incremental for 2 sides, BCU and Princess but as far as I can see not for PYMS. Yes some Fairline customers will change brands but others won't so that means that both BCU and PMYS are competing for a market that isn't a whole lot bigger than it was before. Yes there may be advantages for PMYS to turn around stock and p/x boats faster but I don't see that compensating for turnover that will inevitably be lost to BCU. Anyway who knows what the long term strategy is here. It might be as simple as trying to knock Fairline out of the market not only to increase sales turnover for Princess but increase margins for the dealers. When you're only making 5.9%, increasing your margin by a few % can more than compensate for a loss of turnover. Profit sanity etc

For us boaters as a whole though the risks to Fairline here are bad imho. At a macro level we do not want an oligopoly of two players, Princess and sunseeker, supplying our genre of UK boats. We need at least 3 UK builders to have the right competitive tension and pressure in the Uk market
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Agreed. Lack of competition is bad for the customer but consolidation is inevitable in a mature industry like boat building especially in bad economic times
 
I've not been into boats long but this whole territory thing does wind me up a bit. I've heard many times in the UK "sorry I can't sell you x boat, you'll have to contact y" I'd love to see "competitive tension" in the UK. Is this practice even...errm legal?
 
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