Fairline capital contribution

The challenge they all seem to have is making money.

Given prices keep rising almost exponentially this is a bit odd !

the current fl 68 is a lovely boat ( I had the old 65) but it is a game of new models and new models sell and force upgrades. New models take cash. Cash comes from sales.
 
PowerYachtBlog said:
Now acquired by Hanover Investments. Fairline back in the hands of an Equity Firm. Are the Russians out of the investment?
Fairline Yachts acquired | Yacht Style
Still not looking solid. They will put some investment in the brand at the start what happens after that no one knows.
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Yes we do. Private quity recipe is always the same. Borrow huge amounts and leave the company in debt up to its ears. Cut away any long term development. Switch manufacture to subbies in the third world. Doctor the accounts and run up the profit to the maximum then flog off to the same unsuspecting fund managers who bought the last pig in a poke. Its a financial game played with no regard to anything other than making a profit on the deal.
 
DutchFanny said:
They look for brand values other than simply where the product is made. After all boat builders like Fleming, Grand Banks and Nordhavn have managed to maintain excellent brand perception despite making their products in the Far East
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If you're looking to command higher prices then it is how it's made that matters, not where it's made.

There is a reason a Fleming costs more (and people are prepared to pay more) than a Prestige...
 
DutchFanny said:
There are only 2 ways to make money from manufacturing; either you make the product cheaper than your competition or you sell it for a higher price than your competition. The French and, to some extent, the Italian builders do it the first way through economies of scale by putting together various brands who operate in various sectors of the market. The other way, higher pricing, is much more difficult especially through downturns which the boat industry, being a discretionary purchase market, suffers from regularly. Even a premium brand like Ferretti have found they can no longer sustain their premium prices and there is no chance that a brand like Fairline can sustain a premium pricing strategy
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You are totally wrong. If you see Viking in the USA they make a nice profit and everything is done in New Jersey, even the aluminium and steel they produce themselves.
For 2021 they are building 70 Sportfisher yachts, and 90 Valhalia center consoles.
Azimut always turns a profits as well. And Sunseeker and FG are also running ok. The difference ifor FG and Sunseeker is that both are run by Chinese industrialists not Hedge funders.
If you want to make 100% on your return in boating you have to run your business.
If you run are an Equity or Fund investment and give the show to a CEO who in the meantime is running other five businesses it will never cut it.
And that is the problem why Fairline and other boat builders in similar situations never move forward.
Unfortunately for Fairline after the Newingtons it turned out from bad to worse. Go figure in Newington time the company had the best PandL of the British boat building industry.
Surely boats where cheaper diesel where cheaper, but they had challenges at the time. No Euro huge daily currency fluctuations includng in the 80s and 90s an Adriatic and Turkish market which did not exist.
 
PowerYachtBlog said:
And Sunseeker and FG are also running ok. The difference ifor FG and Sunseeker is that both are run by Chinese industrialists not Hedge funders.
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Are you sure about that? My understanding is that S/S have been running at a substantial loss for years. At best, they've made a very modest profit in the past year or two. Not to mention the 460 redundancies last year and the boats they're building with no buyers for.
 
petem said:
Are you sure about that? My understanding is that S/S have been running at a substantial loss for years. At best, they've made a very modest profit in the past year or two. Not to mention the 460 redundancies last year and the boats they're building with no buyers for.
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I am not sure.
I am not really inside SS to know what is happening.
What I know is that with Frabetti (now over 1 year at the helm) they have a good CEO, who knows how to move forward so possibly the profit is showing his leadership.
 
I’ve lost touch over the last couple of years but Phil Popham did a terrific job at SS, turning a substantial loss to an operating profit. I fear the Chinese owners paid too much, but at least they didn’t do it with debt.
 
It also about understanding well in which segment(s) the brand fits. Princess is strong in the 50-90 ft range roughly. When I asked about the end of the M series, they told me that these boats had to get a place in a very competitive segment of the market. These yachts have to be crewed permanently which comes with a different set of requirements than a 60 or 80 footer. I think that also in looks the M series was not a match for the classic lines of a San Lorenzo or for the smaller semi custom Italian or Dutch motor yachts of that size. I think they had to conclude that this segment was not (yet) the right place for Princess.

Fairline was a strong brand in the 30-60 ft range around 2000. They moved up in size but could not differentiate enough from competition and at the same time were squeezed by private equity.
Fairline would benefit from being acquired by a larger group and reinvent their own place in the market. May be sportscruisers in the 30-50 ft range. ?
 
DutchFanny said:
There are only 2 ways to make money from manufacturing; either you make the product cheaper than your competition or you sell it for a higher price than your competition. The French and, to some extent, the Italian builders do it the first way through economies of scale by putting together various brands who operate in various sectors of the market. The other way, higher pricing, is much more difficult especially through downturns which the boat industry, being a discretionary purchase market, suffers from regularly. Even a premium brand like Ferretti have found they can no longer sustain their premium prices and there is no chance that a brand like Fairline can sustain a premium pricing strategy

So what can relatively small companies like Fairline do? They do not have any manufacturing cost advantage (quite the opposite) and their brand doesnt command high prices. Britain, like the rest of Europe, is an expensive place to manufacture anything so in my opinion, the only viable strategy for a company like Fairline is to offshore as much of its manufacturing as it can to lower cost countries

I know some people will say then that the Made in Britain brand advantage will be lost but I have some news for you Brits. Made in Britain doesnt have the same cachet it used to, especially since you guys brexited:D Buyers are far more sophisticated these days. They look for brand values other than simply where the product is made. After all boat builders like Fleming, Grand Banks and Nordhavn have managed to maintain excellent brand perception despite making their products in the Far East
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There is a third way to make money in manufacturing and that is to vertically integrate. In my last corporate role, we did this and generated £1,200 of profit in every £1,500 of sales and that was UK based. The product was specialised and highly regulated. The business needed to be re-engineered from top to bottom and took about 2 years. The workforce was around 180 when we started, we sacked a third, a third left the company and the third that stayed were simply amazing. When the process was finished, the workforce stood at around 120 after replacement recruitment. I worked for a VC, they bought the company (distressed sale) at £4m and sold it 10 years later for £45m.
I have been exploring the marine industry for a business venture and with the greatest respect to many of you on here, it is a bag of bones. I just cannot understand why companies are making such losses. There is a motivated market with money, excellent aftersales opportunities and repeat business. Yes, costs are high, but that’s the same for many industries.
The big risk is the product lifecycle, from design through to sale, what is the timeframe? More than 2 years? maybe this is where the real issue lies. Buying a boat, any boat is a huge investment for the owner both at point of sale and over the life of ownership.
 
EricJ said:
Fairline would benefit from being acquired by a larger group and reinvent their own place in the market. May be sportscruisers in the 30-50 ft range. ?
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The problem is that this isn't a particularly profitable segment of the market. Sunseeker and Princess have pretty much abandoned anything under 40 foot.

The Targa 30 was a great boat for its size and even in the early 2000's that didn't sell well or profitably.

People with money seem to be quite happy going straight to a new mid 40 foot boat.
 
petem said:
The problem is that this isn't a particularly profitable segment of the market. Sunseeker and Princess have pretty much abandoned anything under 40 foot.

The Targa 30 was a great boat for its size and even in the early 2000's that didn't sell well or profitably.

People with money seem to be quite happy going straight to a new mid 40 foot boat.
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Princess uses the V40 as an entry point to their range. Other brands like Marex, Nimbus, Jeanneau etc focus on the smaller boats. Surely the smaller segment is not easy but Nimbus and Marex seem to be successful there. I thought that Fairline did quite well with the Targa 34, 40 and 43.
Don’t forget that for many places in northern Europe 40 ft is a pretty large boat.
 
You need big volumes to do well in the sub 40’ range, hemce Ben/Jean and some US. Scandi have their own niche, and appear to do well, albeit using Poland as a manufacturing hub.
Fairline is a builder of quality boats, better in my view than SS and Princess these days. This comes at a cost, hence premium pricing. of course they need new models, they know that. I expect to hear some announcements at Sibs.
 
Would the location of the Fairline yard be counter productive to getting large yachts to open water? I remember seeing JFM's thread on the build of his yacht and thinking that at the time.

I remember being at Sunseeker many years ago (20+) and them having problems getting one of their large yachts down the street towards the water, why they booked us to come do a survey while they were manoeuvring the boat out their doors kind of surprised me.
 
Alicatt said:
Would the location of the Fairline yard be counter productive to getting large yachts to open water? I remember seeing JFM's thread on the build of his yacht and thinking that at the time.

I remember being at Sunseeker many years ago (20+) and them having problems getting one of their large yachts down the street towards the water, why they booked us to come do a survey while they were manoeuvring the boat out their doors kind of surprised me.
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They did in the Hythe debacle.
Bought a place by the sea , phaffed about them shut it .

Workers say it all
Working at Fairline Yachts in Hythe: Employee Reviews | Indeed.com
 
petem said:
Indeed. Porto has a real blind spot when it comes to Sunseeker and Princess. He seems to revel in any of Fairline's misfortune but completely ignores Sunseeker and Princesse's far more significant failures.
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That’s completely untrue I predicted mayhem years ago and it’s all happened. True it was me said FL was next after Sealine .
Stay of execution is because of a revolving door of VC folk(s) .
Sunseeker are safe with the Chinese owner , so are Princess it’s the adopted high end “French “ brand under the LVT group .
Both are dots in the both mighty corporate accounts.

FL have been squeezed out because no decent modals for a while .
The markets moved on and left them behind , they dropped off into oblivion.

There are plenty of smaller builders in Italy doing 20 to 50 ft and plenty doing 45 Ft to 45 M and beyond .

Its about style , engineering integrity , VFM and 1/2 decent marketing , knowing your target market .

They should have done the Hythe thing a decade earlier and brought new 85 , 90 and 105 s out .Ipswich makes sense .
They should have not allowed Mancini to part company or that Dutch marine engineering consultancy.
They should have built a halo super performance of the 63 , GTO followed by a 50 and 75 .
They should have built better relationships with the German engine builders for the EU and CAT for the NA market .
But they took the free credit of VP instead far too long .
Yes I believe you can build smaller profitable boats to entice new entries .Seen them @ Genoa x2

They SHOULD NOT exhibit this level of caulking @ a the Genoa Boat show 2019 FL 33 debut .
343C847E-7F0E-40C2-88F4-376FD0CE3E5B.jpeg

It’s what greeted you as stepped aboard ....urgh ! as no passerelle .


Whats you reason Pete , why aren’t they selling enough boats ?
 
I think you've proved my point. I've heard shocking stories about Sunseeker build quality over the years but all you ever go on about is Fairline. Not to mention the inaccuracies in your post that I can't be arsed any more to correct.
 
petem said:
I think you've proved my point. I've heard shocking stories about Sunseeker build quality over the years but all you ever go on about is Fairline. Not to mention the inaccuracies in your post that I can't be arsed any more to correct.
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They are still sell them though as to a lesser extent Priny .
All of them Ferretti inc now and again gestate a shocker .It’s how they deal with the feed back , react and molly coddle the punter and learn .
I know for a fact when Ferretti took over Itama circa 2005 and moved production from Roma to Forli on the Pershing site there where issues not just the change of staff but change of hulls and build up technology when Marco Cassali took over design .
He is still there doing it btw , what’s that a 16 y relationship thus far .
Ferretti did dip in the late noughties but listened to feed back and set up ( ok easy with a sugar daddy ) a separate engineering division solely to focus on the quality particularly noise , harshness and vibration. As well as the general fit finish .Like forvexa they binned ply veneers for teak .It’s all real planks throughout the FG .No veneers at all .Owners feed back and willing to fork out .It shows immediately you step aboard and start them up .
I realise a lot on hear have not been to a invitation dealer + clients wet boat show whereby you take them out and helm inc WOT them !
You all wax lyrical about head room in owner mid cabins when the things tied up at the dock with weedy engines fitted .
You cant even go on the bow area or engine rooms because U.K. H+S woke folks at U.K. shows .

So why are FL not selling enough boats since say 2010 Pete ? You have not said .
 
Ironically Pete I rent my La Napoule berth out to FL France who place demos and PDI boats waiting in it .
Once they had the next but one berth .
A iirc 45 gt ( sorry can’t be too specific) turned up brand new off the del ship in Villfranche.
Owner arrives and dealer go on board both naturally proud.
A few days later a U.K. reg FL van rocks up with too Brits and loadsa a pre cut veneers of teak on boards .
It took them 2/3 days to lay this stuff on the side decks .They needed custom shaping at the edges .
The decks were curved in the vertical lane as well a curved in the horizontal.
I was horrified they dug out holes in the preformed black caulk and after roughing up the none slip with a machine ( took a day ) they glued the sheets down with self tappers straight into the decks .
Next day back filled the holes with black caulk to disguise the self tappets under .

Owner arrives 3 days later to find teak side decks .....so he thought.

As a comparison a few boats further down a new Prinny 50 something FB turned up .There must have been a PDI issue with the teak on the bathing platform .A couple of Fr techs turned up and bolster chislled off all the teak .No veneer sheet solid planks .
Took about 2-3 days to remove and prep the now naked platform.
It then took about a week to cut and relay individual planks , no self tappets just heavy weights left a few days .Each piece measured cut and laid with spacers etc .Later they calked any gaps left that 2/3 days then cut off the excess and lightly sanded the lot .
Same here a proud new owner turned up none the wiser .

Mean while iam sat there watching all this and wondering why the difference in quality between Princess and FL on the same size range boats .Trying to stop out dog peeing on the stack of solid teak planks aside the Prinny .:)evey night he went ashore for a comfort break .
 
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