Fairline Boats purchased

[crustysailor321]

Let's hope so, seems to be lots of dosh sloshing around Putin's coffers.

Would they ship the whole business to Russia? Doesn't sound like it so far, but you never know.

I'll be interested to know what kind of business model they plan to implement at Fairline. I'm guessing for a start they will consolidate the product line-up and get rid of some models. Which ones will they get rid of and which ones will they keep? Truth be told, most of the squadron models don't appeal to me much as it stands. Simply slapping on a flybridge to a targa might make sense from a cost-saving perspective, but the end result just seem a little out of proportion to me. And I don't find the current sqaudron flybridge's sea keeping and handling as good as their older models.

In the longer-term, if they are serious about the firm, they will of course have to invest and produce new products from scratch. What segment of the market should they focus on? And what must that boat have to really attract buyers and put Fairline back on a stable footing? Their facilities at Oundle and Corby don't have room to make big 100+ foot yachts like Sunseeker and Princess. But I don't think making big yachts is the way to go for Fairline anyway. Sure, the revenue from those superyachts can be huge, but how many superyachts can they really sell? Its a really niche market and I think there are too many players fighting over a very piece of that pie already.

So, what kind of boat should Fairline focus on making?

 

[JumbleDuck]

1) an established dealer network
2) no debt
3) a 'cut to the core' cherry picked workforce
4) a new lease on their old purpose built premises (I believe their old lease was crippling)
5) no money on the balance sheet for dozens of designs, not all of which will sell well
6) tools purchased from the administrator at used values
7) selected maintenance and license contracts novated as required
8) a couple of recent designs (T53 and Sq53) in the bag
9) deposits held with dealers
10) owners and backers that are passionate about the boating and the brand and at the start of the journey rather than the end of it (a la Princess)

11) A range of boats and design language which have failed to make any money for three successive owners.

 

[petem]

11) A range of boats and design language which have failed to make any money for three successive owners.

I certainly agree that they need an attractive range of boats to sell but the reduction in their cost base at least means they have a slim chance of survival. Not to mention the fact that their management team have a lot of experience in boat sales so perhaps they may be able to make the best design decisions for whatever new models they develop.

 

[Deleted User YDKXO]

Would they ship the whole business to Russia? Doesn't sound like it so far, but you never know.

They would be very unwise to do so because the essence of the Fairline brand is its Britishness. Having said that they might look at having some components of the boat manufactured in a lower labour cost country, maybe the hulls and furniture assemblies, leaving the final assembly to take place in Oundle

So, what kind of boat should Fairline focus on making?

IMHO what they can't do is make the same old, same old boats that they were building before that compete head on with bigger and more established builders. They have to do something different but the problem with that is that it is going to take a lot of R & D investment. As I've said previously, I would like to see a Brit builder with a range of trawler type yachts to rival the Beneteau Swift and Azimut Magellano ranges but its going to take an awful big investment

 

[crustysailor321]

They would be very unwise to do so because the essence of the Fairline brand is its Britishness. Having said that they might look at having some components of the boat manufactured in a lower labour cost country, maybe the hulls and furniture assemblies, leaving the final assembly to take place in Oundle


IMHO what they can't do is make the same old, same old boats that they were building before that compete head on with bigger and more established builders. They have to do something different but the problem with that is that it is going to take a lot of R & D investment. As I've said previously, I would like to see a Brit builder with a range of trawler type yachts to rival the Beneteau Swift and Azimut Magellano ranges but its going to take an awful big investment

That of course raises the question of whether these (so far) unknown Russian owners have the money or desire to make such an investment. If Fairline is to be a success in the long-run, I don't see how they can avoid biting the bullet and making the big investment.

I agree it may be inevitable for Fairline, if they are to be competitive, to ship some manufacturing outside the UK. The unions won't be happy to hear this, but since Fairline don't enjoy the economies of scale like Beneteau and Azimut, they can't really compete on price and cost. Both Beneteau and Azimut can produce boats than can almost match the craftsmanship of British-made boats at a cheaper price. Btw, I think this problem also applies to Sunseeker and Princess to some extent, but they are shielded by their rich owners, unlike Fairline.

The key is how to ensure quality of those foreign made parts.

 

[PowerYachtBlog]

They would be very unwise to do so because the essence of the Fairline brand is its Britishness. Having said that they might look at having some components of the boat manufactured in a lower labour cost country, maybe the hulls and furniture assemblies, leaving the final assembly to take place in Oundle

IMHO what they can't do is make the same old, same old boats that they were building before that compete head on with bigger and more established builders. They have to do something different but the problem with that is that it is going to take a lot of R & D investment. As I've said previously, I would like to see a Brit builder with a range of trawler type yachts to rival the Beneteau Swift and Azimut Magellano ranges but its going to take an awful big investment

I seem to never understand why it is such a huge deal for Fairline and any Brit builder to do this and not so much for the others.
Let's look for example at Absolute, a fairly youngish brand with people and the main share holder being in the business for like since the 60s as the original Fairline.
If I remember well Gobbi founded Gobbi in 1960 which is when more or less Fairline was started.
Currently Absolute is selling 50-100 boats a years which is what Fairline more or less have sold in the last years.
Absolute new plant was developed in 2010 has a limit of about 90-100 feet max length, and is located inland in the middle of North Italy in Piacenza.
I know Fairline redeveloped its plant in mid first decade after the turn of the new century.

Yet Absolute find no problem to develop two Navetta models in from 2014 till 2015 (58 and 52), a third is coming of about 45ft in 2016, and yet Fairline can't.

May be no British builder will develop anything before some bankrupt builder will come and sell some already developed hulls to them at pennies.
We speak a lot of R and D but it seems the expenditure is close to nothing, or a very small single digit % number from the Brits.

If we look at things it is not surprising, since even if you look at IPS it took almost a decade for Princess and Fairline to put it on there boats, and Sunseeker jumped with the 47 straight away albeit with a non modified hull. Lesson learned, here comes the 48 with a totally dedicated hull. Which is what Volvo was preaching after the few tests with IPS.
Sometimes I am surprised the British builders have a good name when thinking about it, there formula of success has been, same wheel all over again and use the client as your R and D department.
Okay I know boat building is a hard business, but I personally think that boat builders cannot keep on going with this formula.


Speaking in general today we lost the enthusiasm of the first builders gone, now we have the excitement of bankers and profiters, who soon realize the hard reality of managing such a lucrative business model, and the shining GRP becomes a faded one, very fast.

 

[Deleted User YDKXO]

I seem to never understand why it is such a huge deal for Fairline and any Brit builder to do this and not so much for the others.

Very fair points and you're probably right. Here in the UK, the only thing that matters in most businesses is the next quarter's profit/loss figures. There are many things that British industry does well but one of the things that it doesn't do well is to plan and invest for the long term. Yes it is an indictment of the British boating industry that here we are 7 years after the global recession started and they're still building fundamentally the same old planing boat designs that they were building during the boom times

 

[crustysailor321]

Sometimes I am surprised the British builders have a good name when thinking about it, there formula of success has been, same wheel all over again and use the client as your R and D department.
Okay I know boat building is a hard business, but I personally think that boat builders cannot keep on going with this formula.


Speaking in general today we lost the enthusiasm of the first builders gone, now we have the excitement of bankers and profiters, who soon realize the hard reality of managing such a lucrative business model, and the shining GRP becomes a faded one, very fast.

This somehow reminded me of a conversation I had with a Dutch friend once. He told me that from his foreign view, he thinks the Brits are terrific at inventing things, but terrible at turning those inventions into competitive products in the current business environment. He was pretty blunt, telling me the Brits are "incompetent" when it comes to manufacturing. I told him that was a gross generalization and there were many exceptions to that rule. He countered with examples like the UK aircraft industry (pretty much gone in terms of airframe manufacturing, now only engine-making left with RR), the automobile industry (all gone or foreign-owned, except for a few niche manufacturers like Caterham) and the ship building industry (still around, but a mere shadow of its former self).

I said its globalisation and all economies focuses on their strengths (the UK being services). He said: "True, but even so, one can't really be considered a truly great country without some kind of competitive home-grown and owned manufacturing". I would then counter with our boat industry, building globally competitive boats for the world market. Well now, maybe I have to reconsider that a little.

Much as I really hate to say this, maybe my Dutch friend does speak with a grain of truth?

 

[JumbleDuck]

I certainly agree that they need an attractive range of boats to sell but the reduction in their cost base at least means they have a slim chance of survival. Not to mention the fact that their management team have a lot of experience in boat sales so perhaps they may be able to make the best design decisions for whatever new models they develop.

A cynic, and heaven knows I am not a cynic, might say that if the sales team couldn't flog enough boats before it's hard to see how they plan to start flogging more of them now.

 

[Whitelighter]

A cynic, and heaven knows I am not a cynic, might say that if the sales team couldn't flog enough boats before it's hard to see how they plan to start flogging more of them now.

Well if the company isn't having to service massive debt perhaps selected models from the old range would sell at a lower price. If they can operate at a profit without that overhead since the moulds etc are paid for.

 

[rafiki_]

This somehow reminded me of a conversation I had with a Dutch friend once. He told me that from his foreign view, he thinks the Brits are terrific at inventing things, but terrible at turning those inventions into competitive products in the current business environment. He was pretty blunt, telling me the Brits are "incompetent" when it comes to manufacturing. I told him that was a gross generalization and there were many exceptions to that rule. He countered with examples like the UK aircraft industry (pretty much gone in terms of airframe manufacturing, now only engine-making left with RR), the automobile industry (all gone or foreign-owned, except for a few niche manufacturers like Caterham) and the ship building industry (still around, but a mere shadow of its former self).


Much as I really hate to say this, maybe my Dutch friend does speak with a grain of truth?

Crusty, I don't know what planet you are on, but we manufacture more cars in the UK (OK England) now than we ever did. Why would globally successful companies like Toyota and Nissan centre their Eu manufacturing in England if we are so rubbish at it? JLR are building close to 500,000 high margin rubbish vehicles. Oh, and on the aerospace front, between GKN and Airbus, we build all the Airbus wings and landing gear in the UK, along with the RR engines, the highest value parts of the aircraft. Rant over.

 

[Flynnbarr]

Crusty, I don't know what planet you are on, but we manufacture more cars in the UK (OK England) now than we ever did. Why would globally successful companies like Toyota and Nissan centre their Eu manufacturing in England if we are so rubbish at it? JLR are building close to 500,000 high margin rubbish vehicles. Oh, and on the aerospace front, between GKN and Airbus, we build all the Airbus wings and landing gear in the UK, along with the RR engines, the highest value parts of the aircraft. Rant over.

UK workforce great,UK owners/management woeful?

 

[petem]

A cynic, and heaven knows I am not a cynic, might say that if the sales team couldn't flog enough boats before it's hard to see how they plan to start flogging more of them now.

I started typing a long and defensive reply but changed my mind. In the context of this article http://www.peterboroughtoday.co.uk/...ows-bright-future-is-on-the-horizon-1-7185121 Russell Currie will either have done his sums right and will sell enough boats to break even (plus find some money to invest in some exciting new models) and therefore succeed or he won't. Simple as that.

 

[jrudge]

When boats.co.uk were the dealer they sold 80 ish a year of which i understand some 50 were via them.

Without the burden of the past, as as I understand it some rationalisation at the bottom end and trimming via the range, I suspect that with a decent set of dealers selling the things they could survive just fine.

However ..... they failed basically after boats.co.uk stopped being the dealer ... when were selling the lions share of the boats.

What are boats.co.uk good at ... selling stuff and doing whatever it takes to get a deal done and keep a customer happy, so happy customer come back again and buy more boats

The challenge they have I suspect is that they now just have "normal dealers" as opposed to people with a few quid in their back pocket who are willing to take px and so on.

Now I can see why other dealers don't want PX, money aside they don't own a marina enabling them to store boats at nil marginal cost and so on.

Sealine saw the same thing as I understand - which I again understand correctly - led them to take the customer old boat in PX at a competitive rate to keep the wheels turning.

Most customers who buy a boat of any size will almost certainly have another boat. Boats sell slowly, so the only way to put certainty back into the cycle is to take it in PX without a large intake of breath whilst shaking head at the same time.

Customers buy based (my view) on the boat yes, but also the overall deal - value - price - simplicity and so on.

The FL offerings were also cheaper than their rivals. As cutting edge? Probably not, but good boats - absolutely.

Aside from the fact it munches up credit lines they could do worse than finance their dealers PXs.

Just a view.

 

[Nigelpickin]

I started typing a long and defensive reply but changed my mind. In the context of this article http://www.peterboroughtoday.co.uk/...ows-bright-future-is-on-the-horizon-1-7185121 Russell Currie will either have done his sums right and will sell enough boats to break even (plus find some money to invest in some exciting new models) and therefore succeed or he won't. Simple as that.

Well that should be easy, 30 boats in a year. All they need to do is build one model really well and find 30 customers.

I suspect that's not what's going to happen and failure to get critical mass and profit on 1 model will lead to out of control costs across a fuzzy range.

But there is an opportunity to build the brand back up, one model at a time; I think punters would subscribe to that but what do I know.

 

[rafiki_]

UK workforce great,UK owners/management woeful?

Used to be the case, but less so now IMHO.

 

[Deleted User YDKXO]

I started typing a long and defensive reply but changed my mind. In the context of this article http://www.peterboroughtoday.co.uk/...ows-bright-future-is-on-the-horizon-1-7185121 Russell Currie will either have done his sums right and will sell enough boats to break even (plus find some money to invest in some exciting new models) and therefore succeed or he won't. Simple as that.

Well at least they're being realistic about their sales prospects. 30/50/100 sales in years 1/2/3 should be achievable. The challenge though will be to take this increasing market share whilst maintaining their margins and thats more difficult. I can't see the likes of Princess and Sunseeker allowing Fairline to take an increasing market share without a fight and that means a price bloodbath which is going to hurt Fairline more than the other two. I just hope that the new team at Fairline have some good ideas on new models which will set them apart from their competitors

 

[crustysailor321]

Crusty, I don't know what planet you are on, but we manufacture more cars in the UK (OK England) now than we ever did. Why would globally successful companies like Toyota and Nissan centre their Eu manufacturing in England if we are so rubbish at it? JLR are building close to 500,000 high margin rubbish vehicles. Oh, and on the aerospace front, between GKN and Airbus, we build all the Airbus wings and landing gear in the UK, along with the RR engines, the highest value parts of the aircraft. Rant over.

I'm not disagreeing with what you have stated, but why is it almost all those manufacturing firms you mentioned are foreign-owned? If you want to talk about Jaguar, it was hardly a success when it was part of the monstrous Leyland. We built the Comet, Trident and VC-10 aircraft, all outstanding from an engineering standpoint, but none were a business success. Why can't we build our own aeroplanes now, and not just plane parts? Why are there so few British-owned firms? Sunseeker and Princess are now both foreign-owned, and so is Fairline now.

We can't blame the unions after the Thatcher era. The nasty days of Red Robbo are long gone. As for high labour cost, not necessarily a barrier. The French and Italians don't employ cheap labour, but they both managed to sustain strong yacht building companies like Beneteau, Absolute and Azimut. And of course the Germans have such a strong car manufacturing industry.

What is it about the British management culture that makes us so incapable of sustaining a successful manufacturing brand without relying on a foreign owner?

 

[rafiki_]

I'm not disagreeing with what you have stated, but why is it almost all those manufacturing firms you mentioned are foreign-owned? If you want to talk about Jaguar, it was hardly a success when it was part of the monstrous Leyland. We built the Comet, Trident and VC-10 aircraft, all outstanding from an engineering standpoint, but none were a business success. Why can't we built our own aeroplanes now, and not just plane parts? Why are there so few British-owned firms? Sunseeker and Princess are now both foreign-owned, and so is Fairline now.

We can't blame the unions after the Thatcher era. The nasty days of Red Robbo are long gone. As for high labour cost, not necessarily a barrier. The French and Italians don't employ cheap labour, but they both managed to sustain strong yacht building companies like Beneteau, Absolute and Azimut. And of course the Germans have such a strong car manufacturing industry.

What is about the British management culture that makes us so incapable of sustaining a successful manufacturing brand without relying on a foreign owner?

While British management is not without blame, it is more the City expectation of quarterly growth and double digit profit that inhibits long term investment these days.

 

[P4Paul]

While British management is not without blame, it is more the City expectation of quarterly growth and double digit profit that inhibits long term investment these days.

Alongside the 'British' interpretation of what constitutes State Aid