Fairline Factory Visit (aka Jolly Boys Outing)

[Deleted User YDKXO]

The second is re. 7 or 10 boats being a problem bound to lead to insolvency.
We had several small yards in Italy, widely recognised by connoisseurs as among the best boatbuilders of the planet in their own segments, who used to make money and progress even with such small numbers.
Of course, when the situation changed overnight from having a 3 years order book for those 10 boats to zero new orders - which is what happened after the global financial meltdown - anyone would have had a problem.
And it's not like those who were much bigger, with a financial leverage exploited beyond reason, eventually got much better results - aside from finding some Chinese folks with more money than sense willing to rescue them.... :ambivalence:

In fact, if there's one thing of what Pete told us about new FL strategies that I found a bit weird, is that they are already aiming at reaching a 3 digits number of boats per year.
What for, I wonder? If industries didn't learn a lesson about sustainable growth after 2008, I'm afraid they never will...

Well yes and no. The thing about those smaller manufacturers building 7 boats a year and doing nicely is that, by definition, they are inevitably focussed on either a single niche segment in the market or a geographical niche so when that niche disappears they have no other niches to fall back on. I have seen it time and again since 2008. There is a balancing act with any manufacturer in any industry. They must focus on enough market segments to reduce risk if one of those segments should disappear but at the same time they must not be spread too thinly across those segments such that their offering to each segment is diluted. In Fairline's case they have probably concluded that 100 units a year is that balance point and no doubt they have also concluded that the market will absorb 100 units per year. Not only that but they already have the capability in terms of their manufacturing capacity and their dealer network to make and sell those 100 units. To me it seems a fairly modest and achievable target when Princess/Sunseeker are building 200-300 boats a year each. Also targeting a smaller number of units could have been self defeating. What would have happened to their dealer network if Fairline had decided to target just 20 units a year? No dealer would have been happy selling just 1-2 boats a year so most of their dealer network would have jumped ship and Fairline's ability to sell would have gone with them. As I say there needs to be a balance of risk, profitability and sustainability and 100 units sounds about right to me

 

[henryf]

My understanding from yesterday is that the dealers hold the client data. Until very recently EBY/BoatsUK was by far the biggest dealer, and hence will hold the relevant client data. However, they are no longer trying to sell new Fairlines, and their client listing is very precious to them.

Pretty much as I suggested elsewhere on the other FL thread.

The relationship between builder and dealer is, like a lot else in the boating world, rather strange. In most other industries the manufacturer holds the database and dealers use it.

Pure madness that the brand have no control over their customer base. It makes the dealer far more powerful as will be seen by the number of Fairline customers migrating over to Princess. Of course Princess have only got the business whilst the dealer stays in bed with them.

Henry

 

[petem]

I think there's another factor that is only apparent when you visit a factory. Building boats requires space, particularly having places to keep bulky moulds. Indeed I wonder if there is much of a difference in the amount of space required to build 50 or 100 boats (assuming the same number of models).

For what it's worth I don't get the impression that new FL are in any way obsessed about volume. Profitability and doing things 'right' are what counts. We may find as well that their lower volumes mean that customer requests can be better accommodated than if they were building boats by the hundred. Albeit, this brings operational challenges.

 

[Deleted User YDKXO]

I think there's another factor that is only apparent when you visit a factory. Building boats requires space, .

So does storing piles of shit that should be on eBay Go on, we know you wanted that vomit coloured roll of green leatherette

 

[rafiki_]

So does storing piles of shit that should be on eBay Go on, we know you wanted that vomit coloured roll of green leatherette

Mike, I think it would go very nicely with the avocado bathroom ��

 

[Portofino]

1- They have been running for 3 months since they bought it from the adminstrators. To have one boat in build would be an achievement - they have 7 odd ( pete may have more fingers than me!) all bar 2 are brand new orders with people paying deposits etc. I think that is outstanding - how many did you have in mind?

2- There has been debate in the past about Fairline going big. For me they might do it one day but the risks are huge, and the rewards - well one could question that as Sunseeker and Princess are losing money. The size argument is a red herring in my view and for well rehearsed reasons is not going to happen in the forceable future.

3- To build boats you need a skilled workforce and that they have in Oundle. I appreciate Princess and SS have chosen to go bigger but that does not make it the only way to survive or something to copy at all costs.

1- That leaves 5 newbies -pent up spend over the winter ? I would like to have heard -- approx 25 in build - or firm pipeline in the 1st Q . That would keep the wolf from the door .

2- Priny +SS yup "losing money " but full order books and pipelines and backers with deep pockets in this transition phase going large once one off production costs are amortalised .

3- agree "going bigger is not the only way to survive ---" but staying as is is not either -hence the greater than 78 line of thought -or going small competing with the French etc . More of the same has not worked either summit has to give .

I am struggling with a fundamental concep of building boats for a World market inland in northen Europe , miles away from the target audience .
Where is the sea ? Without it you are adding production costs hurting the balance sheet .

 

[rafiki_]

1- That leaves 5 newbies -pent up spend over the winter ? I would like to have heard -- approx 25 in build - or firm pipeline in the 1st Q . That would keep the wolf from the door .

2- Priny +SS yup "losing money " but full order books and pipelines and backers with deep pockets in this transition phase going large once one off production costs are amortalised .

3- agree "going bigger is not the only way to survive ---" but staying as is is not either -hence the greater than 78 line of thought -or going small competing with the French etc . More of the same has not worked either summit has to give .

I am struggling with a fundamental concep of building boats for a World market inland in northen Europe , miles away from the target audience .
Where is the sea ? Without it you are adding production costs hurting the balance sheet .

Worth repeating that new Fairline is only 3 months old. Its focus has been finishing off the sold orders, getting out of Corby and consolidating at Oundle, getting rid of unnecessary cost and overhead, convincing dealers that they have a viable supply of boats, and starting the process of new product development. In addition it has won several new orders through supporting several boat shows, made progress on revamping Oundle plus a shed load more things that I can't remember. 100 sales a year across their target territories looks a reasonable proposition, not dependent on any one market. The product range will be refreshed, and you will have to wait a little while to hear the exciting prospects. I, like the others there yesterday, while being a cynical old g!t, have come away with a very strong impression of the new team, and what they are endeavouring to achieve. They have my very best wishes.

 

[PowerYachtBlog]

To me it seems a fairly modest and achievable target when Princess/Sunseeker are building 200-300 boats a year each

Both Princess and Sunseeker are just building over a hundred boats. I think its been like the past decade when they where doing over 200. Even 2009 they where below that 200 number.
Surely the boats they are building nowadays are much larger. Princess had only a couple of boats above 80 feet 7-8 years ago. Now they have near to ten.
Same for Sunseeker I guess although the portfolio above 80 feet has been steadily increasing since the mid nineties.

A question for thought is not doing med style boats with or without flybridge in the UK (or wherever) a niche product.
The only difference between each model is size.
It is not like Fairline Princess Sunseeker (you name it here) has a varied line of boats (sportfish, explorer displacement etc), more or less they are covering only one niche.
The concept is the same with all the boats in the range cruise for 20-100 nm go to a nice spot sleep on anchor, there for a week move to another marina etc etc.
Obviously the luxury and comfort an 80 footer offers is much more to a 40 footer.

 

[Whitelighter]

Portofino,

The 37 build number is confirmed orders deposited from Dealers.

 

[MapisM]

No dealer would have been happy selling just 1-2 boats a year so most of their dealer network would have jumped ship and Fairline's ability to sell would have gone with them.

I see your points M, and I agree with everything you are saying, in principle. But who needs dealers when building 10 boats per year?

If I should try to make yet another comparison (a bit stretched maybe, as most comparisons, but still more appropriate than the one with automotive imho), it's like deciding whether as a grown-up you wish to be Armani (100+) or a dressmaker (10 or so).
Let me make an example, naming names to be as clear as possible:
An IT yard called VZ, probably unknown to most folks around here, has always been firmly in the dressmaker camp.
And they have been very successful at that - with direct contacts with clients, each and every boat heavily customised, etc.
As several others, they are now closed for good, so I can already see the objection coming: since FL, against all odds, is still alive, there's not a lot they can learn from VZ and the likes....
...But bear with me for a minute.

Believe it or not, if I were looking for a new 65' flybridge TODAY, I'd rather have a VZ 64, designed more than 10 years ago, over a Sq65 or a P64.
And trust me if I tell you that if you would spend one hour onboard a VZ64, looking at her in detail, you would reach the same conclusion.
Christ, I would probably choose a 10yo VZ over a brand new PrinSunFL - and also Azimut or Ferretti, for that matter.
Apropos, in reply to Sailorsam101 who said that he "looked at everything i could and FL boats aged the best by far":
pretty sure among everything you could look at there were neither VZ nor SL boats, right?
Because without detracting anything from FL quality, both these yards are quite simply in another league, in this respect.

Sure, if VZ would still be around today, you should be prepared to fork out even more for one of their new boats than the already silly amounts FL etc. are asking.
But that has never been a problem for them, till someone flipped a switch in the US and all their (admittedly geographically limited) clients just stopped buying boats at all.

Anyway, when all is said and done, the choice between selling Armani dresses at Harrods or haute couture directly to selected clients is their, not mine.
For some reason, I felt that FL was the only UK builder who stood a chance to be successful in the latter, obviously smaller but not necessarily less interesting, market.
But heyho...!

 

[Anders_P42]

Pretty much as I suggested elsewhere on the other FL thread.

The relationship between builder and dealer is, like a lot else in the boating world, rather strange. In most other industries the manufacturer holds the database and dealers use it.

Pure madness that the brand have no control over their customer base. It makes the dealer far more powerful as will be seen by the number of Fairline customers migrating over to Princess. Of course Princess have only got the business whilst the dealer stays in bed with them.

Henry

I wonder what happened to all the customer data collected at boat shows? I left my email and name once and I'm yet to receive an email from the new Co. They must have either passed the papers on to dealers, or binned them thinking everyone is a tyre kicker...in which case why bother forcing folk to leave contact details in first place!?

 

[jrudge]

Something has lost its way here and I think the thread is turning into let's bash for the sake of it.

They are looking to build 37 this year and ramp over time to 100.

They have dumped the head office building, consolidated sites and are building boats. They are not trying to survive on 10 or whatever a year.

They have achieved a lot in a very short time. I don't know why there is no appreciation of that.

I can be pretty cynical from time to time but the management know what they are doing and understand the market backwards.

I assumed the strategy was let's rehash and carry on as it would cost less. Nothing could be further from the truth. They are looking at new designs and a complete range refresh.

It would be nice to be honest if the forum said wow that's an achievement rather than rolling out old arguments of why don't they copy the loss making sunseeker and princess strategy !

 

[Portofino]

Portofino,

The 37 build number is confirmed orders deposited from Dealers.

Great then that moves it to more towards success and along with the enthusiastic team , re-org re reducing Overheads ,
Some clever marketing -read good show s , and the NDA new designs fed into dealers ASAP , then may be ,just maybe with a deep pockeket owner "new Fl " may see out this decade .
Looks likely -
But then what ?
Tothers are betting on going large and by 2020 SS will have a 170 + @ £50m+ or more ? a pop floating away from Poole
Some of the components i,ll bet shipped in from China -but you will not be able tell .

Ok here a tell take marker on where it's ( leisure boat building is going ) make of it what you will
Here goes
The Cote d Azur marina wise maxed out 20 y or so ago .No more new ones all chocker block full .
Berth prices /rents reflecting supply -demand
As boats grew -inc beam marinas have encouraged or not blocked berth holders buying up a spaces and redistributing the beam .
Ie keeping the maths simple 10 at 1m then they buy one share out now 9 boats at 1.11 M -as beam increases with size -Capitanainerie moving the bollard -and so on .
In my marina (been there 11y now ) -seen this happen. Loads of times at all levels -it's a process that's means the gravitas of boats , or direction of travel is bigger .So a a builder with loyal or not clients you need to follow this trend to stay in the game .
At he top end 11y ago we had a Bennetti 125 , now we have 1/2 dozen 170's plus a few 150 ,s and many 140'130 etc
A SS 155 like Blush (Eddie Jordon ) will be anonymous -really .
There is a ripple effect down as newbies start @ 60-80 ft and soon move to above 80 ft -that's what Sun Priny are after .
This is happening all over in the C d A
so if you want to arguably re enter the leisure boat market like "new Fl " --look arround ,where's the market heading ?

Just to underline the above --4 existing big berth holder have put a proposal to us( we are all share holders ) to do this
Forfit there existing berths to club as rental ( to generate income ) and the with the necessary approvals using there own funds extend the jetty / breakwater so can accommodate 4 x 180 ft berths .
Q who,s ready to build 4x new boats to fit
And who,s ready to buy a big boat to fill ( albeit renting ) there old berths , and what have these 4 move up from . ?
So it tricked down
How does "new Fl " figure in all this ?

 

[Time Out]

They may not even have the database in the first place.

I find it slightly amusing that a good few on here used to complain at the slightest bit of direct mail and they the don't recieve it they moan !

Data is a complex best.... A good database manager is worth their weight in gold.

The Sunday Times Rich List is a good if crude place to start ... Start googling !

 

[Deleted User YDKXO]

But who needs dealers when building 10 boats per year?

Agreed but you still need some form of in house sales/service network because boats don't sell themselves and nor do they fix themselves and you still need a marketing spend. It could be that the cost per boat of selling and servicing 10 boats per year in house is a lot higher per boat than the cost of selling and servicing 100 boats per year through a dealer network

As for Fairline becoming a low volume/high quality builder as opposed to a medium volume/medium quality builder, I'm not sure that the Fairline brand would be transformed so easily. Its not so easy to convince the market that you've changed from selling Mondeos by the dozen to selling single Rolls Royces

I

 

[Deleted User YDKXO]

My understanding from yesterday is that the dealers hold the client data.

Yes but as jrudge pointed out, Fairline held the new boat warranty data so I don't see that a letter from Fairline saying hi were still here to all names/addresses on that data list would contravene any laws

 

[Illusion]

Great report Pete and a useful exercise, hopefully as insight for the forum as well as Fairline obtaining first hand input from boat owners.........just a shame my diary didn't permit me coming along, as I'm sure it was very interesting?
Let's hope FL keep up the two way dialogue.
The feedback on progress and achievements so far seems very promising and let's face it we'll only be able to really judge the new company when we see the new designs in due course and then the finish, build quality and most importantly, performance on the water, once the new boats are built.
Until then I'm quite happy to sit back let the guys get on with the hard work of finishing orders, repairing relashionships with suppliers, dealers and current/potential owners and hopefully bringing some new "relevant" designs to market, safe in the knowledge the Fairline brand seems in a better place now, than it looked liked it would be a few months ago!

 

[Portofino]

Something has lost its way here and I think the thread is turning into let's bash for the sake of it.
!

I don,t see it that way and apologies to all if my posts give you that view ,its not my intention .

Endorphins can hang around in the brain long after they are stimulated

Of course fresh from the visit and a loyal "old FL " customer the glasses are rose tinted .

Itama sold 4 boats in 2014 ( sorry have no other figures ) ok niche product , but if not under the wing of the Chianese -deep pocketed owner of Ferretti -then thay would have like many others post 2008 crash gone bust .
It's a forum I,am happy to read /listen to all sides ,views might not like it or agree ,but interested .

 

[jrudge]

I don't think they are rose tinted at all.

I was genuinely surprised at a. What they had achieved in 90 days ( astonished actually ) and b . That they are going all new as opposed to a rehash of existing

 

[rafiki_]

Of course fresh from the visit and a loyal "old FL " customer the glasses are rose tinted .

Of the 6 forumites present, 2 are Fairline owners, 3 of us own Italian boats, and one is between boats. Where are the rose tints?