FT on Sunseeker and Fairline today

[DougH]

Of course. A condition not passing full title until 100% monies paid must be in every set of sales conditions ever written and the dealer not making a profit until the final balance is paid is very common. What did SSG do to get into such trouble and who owned SSG before they got into trouble? Fair play to SS for bailing them out; it must have been a very tough decision. Many manufacturers would have walked away

All Sunseeker Distributors are stand alone companies owned by separate shareholders from Sunseeker International.

Sunseeker International does not have any financial interests in any of its Distributors, and I think you will find this is common with most manufacturers both in the UK and overseas.

What caused Sunseeker Sales Group demise? Heard many rumours and many more so called 'facts' and my mate stories, but the truth is I do not know.

 

[jfm]

Very true, but lets be absolutely fair and acknowledge just what Robert Braithwaite did.

IT COST HIS COMPANY 6.8 MILLION.

Who do I have great faith in and who will I be buying my next boat from? SUNSEEKER.

Come on guys for once praise a British person from a British Company for the exemplary action he took.

Yes, DougH, agreed, Sunseeker agreeing to step in and spend 6.8m rescuing the dealer is a praiseworthy rescue for those customers who could have lost money otherwsie. It wasn't just Braithwaite family: there are other shareholders in Sunseeker. And of course the motives weren't all altruistic. But still I agree with your general point which is that they deserve praise for taking action that rescued customers

It does beg the question about the mangement of Sunseeker in allowing this financial mess to happen. I got kinda told off on here previously for suggesting Sunseeker are not financially strong, but it's ok now for FT to say it.

As for Fairline and Peters, that is quite unfair: Fairline ended the Peters dealership long before Peters went bust

I note you say you'll buy your next boat from Sunseeker. Are you sure? I've just gone through the process of considering which of the UK big-boat manufacturers to extend £1million of credit to for 12 months and I can very much assure you that Sunseeker were not top of my list. My list in terms of creditworthiness was unequivocally Fairline then Princess then, very much bringing up the rear, Sunseeker (it's actually a no-brainer)

 

[Deleted User YDKXO]

I note you say you'll buy your next boat from Sunseeker. Are you sure? I've just gone through the process of considering which of the UK big-boat manufacturers to extend £1million of credit to for 12 months and I can very much assure you that Sunseeker were not top of my list. My list in terms of creditworthiness was unequivocally Fairline then Princess then, very much bringing up the rear, Sunseeker (it's actually a no-brainer)

I would have thought that the creditworthiness of the dealer rather than the manufacturer would be the No1 issue?

 

[PowerYachtBlog]

The rumour has been that since the mid/end 2008 a big Sunseeker dealer which has Braitwaith interest (dont know if is Sunseeker Sales Group or Sunseeker London) was stuck with a load of part exchanged used stock boats.
I must think that the 6 million hole has very much to do with this, as they where giving heavy discounts on there used craft for cash buyers here in the med.

I think the Fairline Peters affair was another story. Altough high rumours are that Fairline had a bit to do, coupled with very bad management why Peters went bust. You have to remember that the period when Peters went bust which was 2007, we where still enjoying a health economic growth period.

Have to see how the Brit builders will compare to the others when the UK£ will be back to similar levels as those pre 2008 recession....

 

[petem]

Does Roger Moore really still run a Sunseeker? Obviously he was the best Bond but surely he's getting a bit long in the tooth for powerboating?

 

[DougH]

The rumour has been that since the mid/end 2008 a big Sunseeker dealer which has Braitwaith interest (dont know if is Sunseeker Sales Group or Sunseeker London) was stuck with a load of part exchanged used stock boats.
I must think that the 6 million hole has very much to do with this, as they where giving heavy discounts on there used craft for cash buyers here in the med..

The big word here is RUMOUR and maybe we should all rely on FACTS more often.

Jfm appears to know more facts than most of us but still chooses to either be cautious or maintain confidentiality in any of his posts.

Lets all just spread Bad Rumours only about non British Manufacturers and give the others a good bashing for a change.

 

[jfm]

I would have thought that the creditworthiness of the dealer rather than the manufacturer would be the No1 issue?

I agree mike but I think a customer has to be happy with both. The stage payments (in my case 50% approx in payments 1+2, and the other 50% in final payment 3 on completion when I get title) go straight to the builder and if the builder goes bust not many dealers will have the resources to refund amounts of money that big. So, the customer has to to happy with effective credit exposure to builder. But as you say there is also credit exposure to dealer and in the case of Fairline there is a strong candidate Essex Boatyards who are financially sound and have a strong enough business frnachise that the risk of their default is low. It's not risk free but imho Fairline and EBY is a good a combo as it gets, esp compared with say Sunseeker where both builder and (as history has shown) dealer are not as strong

Another way to reduce exposure is buy eg Outer Reef or Aquastar when you only have one counterparty, the builder

 

[DougH]

Does Roger Moore really still run a Sunseeker? Obviously he was the best Bond but surely he's getting a bit long in the tooth for powerboating?

Cheeky bu**er, I'm 65.

My 8 year old Gandson is a red belt in Karate and I bet he could beat you up mate

 

[Deleted User YDKXO]

The rumour has been that since the mid/end 2008 a big Sunseeker dealer which has Braitwaith interest (dont know if is Sunseeker Sales Group or Sunseeker London) was stuck with a load of part exchanged used stock boats.
I must think that the 6 million hole has very much to do with this, as they where giving heavy discounts on there used craft for cash buyers here in the med.

I think the Fairline Peters affair was another story. Altough high rumours are that Fairline had a bit to do, coupled with very bad management why Peters went bust. You have to remember that the period when Peters went bust which was 2007, we where still enjoying a health economic growth period.

Have to see how the Brit builders will compare to the others when the UK£ will be back to similar levels as those pre 2008 recession....

Thats why I was asking about the ownership of SSG. If (and I say if) it's true that Braithwaite had an interest in SSG, then the **** really would have hit the fan if it had gone down. It certainly would explain why SS were keen to save it and possibly why Braithwaite was shunted out. All rumour and hearsay I guess and we'll never know the truth
Yup, the Peters case was not due to the economic downturn but IMHO a huge strategic error in ditching Fairline when they fell out over the solus dealership arrangement which was way past it's sell by date anyway. Peters could probably have survived if they had just agreed to become a territory dealer like all the others

 

[Deleted User YDKXO]

I agree mike but I think a customer has to be happy with both. The stage payments (in my case 50% approx in payments 1+2, and the other 50% in final payment 3 on completion when I get title) go straight to the builder and if the builder goes bust not many dealers will have the resources to refund amounts of money that big. So, the customer has to to happy with effective credit exposure to builder. But as you say there is also credit exposure to dealer and in the case of Fairline there is a strong candidate Essex Boatyards who are financially sound and have a strong enough business frnachise that the risk of their default is low. It's not risk free but imho Fairline and EBY is a good a combo as it gets, esp compared with say Sunseeker where both builder and (as history has shown) dealer are not as strong

Another way to reduce exposure is buy eg Outer Reef or Aquastar when you only have one counterparty, the builder

Yes of course, it is wise to satisfy yourself that both dealer and builder are sound. I'm not so sure about dealing direct with overseas builders. If it all goes pear shaped, you have to fend for yourself in a foreign legal system. In my experience manufacturers are very unwilling to agree to the legal system covering their contracts to be any other than their own. I'm not singling out Outer Reef in particular just a general comment about foreign builders. At least with a local UK dealer, there's somebody to pursue thru the UK legal system FWIW which is probably very little

 

[MapisM]

Lets all just spread Bad Rumours only about non British Manufacturers and give the others a good bashing for a change.

Wow, what a fair approach!
And why not talk of something we are personally aware of first hand, rather than thinking of who's bashing who?
Personally, I have no first hand reason to argue about your "great faith" in Sunseeker, financially speaking.
But since you also plan to buy your next boat from them, I would strongly suggest you to look also into the BASIC build quality of their boats.
I've recently seen one of their big Predators. Almost new, and with possibly the worse gelcoat quality and hull smoothness I've ever seen on such a big boat. All CLEARLY visible even from the dock. And these aren't rumours, just plain facts.
But if you think this sounds as easy internet bashing, well, no problem at all.
Just go ahead and buy your next boat from them. It's your money, not mine.

PS: on second thought, read the above "on such a big boat" as "on ANY grp boat".

 

[jfm]

I think the Fairline Peters affair was another story. Altough high rumours are that Fairline had a bit to do, coupled with very bad management why Peters went bust. You have to remember that the period when Peters went bust which was 2007, we where still enjoying a health economic growth period...

The analysis on Peters is simple. After Fairline was bought by its management and 3i the new owners wanted new terms with Peters, who had special terms for historic reasons. They didn't agree, and Fairline ended the contract, in accordance with its terms. Peters lost a chunk of its business at a stroke, and didn't/couldn't deal with that, and went bust. Brian Peters simply made a bad business judgement in losing FL

Separate to that, although Peters had some satisfied customers they had plenty of unhappy ones too. I bought a new Sq58 through them in 2004 and Peters' service was lousy imho. I would never have dealt with them again whichever brands they represented. I know plenty of others who'd say the same

Meanwhile, Essex Boatyards took over as #1 dealer, and that was fantastic for customers because their service is liked by so many people (me included)

 

[jfm]

Yes of course, it is wise to satisfy yourself that both dealer and builder are sound. I'm not so sure about dealing direct with overseas builders. If it all goes pear shaped, you have to fend for yourself in a foreign legal system. In my experience manufacturers are very unwilling to agree to the legal system covering their contracts to be any other than their own. I'm not singling out Outer Reef in particular just a general comment about foreign builders. At least with a local UK dealer, there's somebody to pursue thru the UK legal system FWIW which is probably very little

Agreed mike, good point. If you have to buy under an overseas law contract you are on the back foot if there is a dispute, and that needs to go into the melting pot in choosing what to buy.

 

[PowerYachtBlog]

The analysis on Peters is simple. After Fairline was bought by its management and 3i the new owners wanted new terms with Peters, who had special terms for historic reasons. They didn't agree, and Fairline ended the contract, in accordance with its terms. Peters lost a chunk of its business at a stroke, and didn't/couldn't deal with that, and went bust. Brian Peters simply made a bad business judgement in losing FL
Separate to that, although Peters had some satisfied customers they had plenty of unhappy ones too. I bought a new Sq58 through them in 2004 and Peters' service was lousy imho. I would never have dealt with them again whichever brands they represented. I know plenty of others who'd say the same

Yes but Peters left Fairline and vice versa because both of them wanted something the other did not want to give.
News is, that Peters wanted an esclusive UK agreement for Fairline of which 3I responded that Peters had to buy 100 BPY ordered in advance. Peters was selling about 50 new Flines per year with about 25 pre-ordered. Further info I received at the time told me that Peters would accept this but only if they would also take over Spain and its islands.
If the information I received was wrong at the time just correct me.

 

[Deleted User YDKXO]

Yes but Peters left Fairline and vice versa because both of them wanted something the other did not want to give.
News is, that Peters wanted an esclusive UK agreement for Fairline of which 3I responded that Peters had to buy 100 BPY ordered in advance. Peters was selling about 50 new Flines per year with about 25 pre-ordered. Further info I received at the time told me that Peters would accept this but only if they would also take over Spain and its islands.
If the information I received was wrong at the time just correct me.

What actually happened was this. Back in the early 1990's during the last recession, Fairline found themselves in financial trouble due to being over stocked with boats, both new Fairlines and used other makes which they had taken in part exchange against Fairlines. Who approached whom I don't know but Peters agreed to buy a substantial number of these boats in return for an exclusive distribution agreement for Fairline sales. I remember seeing rows of boats lined up in Chichester marina at the time.
Effectively this meant that all Fairlines were sold to Peters who sold them on to individual territory dealers who sold them to customers. Over the next few years, Fairline did start exporting to new markets and the dealers in those new markets were able to bypass the Peters arrangement and buy direct from the factory. However, most dealers still had to buy their boats from Peters rather than the factory and understandably, they were frustrated by this because Peters obviously added a margin (I've heard 5%). I also understand that the factory kept these dealers at arm's length with regard to other matters such as warranty claims and technical problems.
After the MBO, I think the Fairline management felt it was time to end this arrangement, quite rightly I think. Peters had had 10 yrs or so of skimming a few % off every Fairline sale and they should have realised that this arrangement couldn't last for ever. I don't know about the 100 BPY offer and I'm not sure about the Balearic/Spain situation. Peters were already set up in Majorca and the Costa Blanca before the split. Whatever, IMHO, Brian Peters should have accepted the situation and agreed to become a normal dealer for the territories he already had, instead of which he threw his toys out of the pram and the rest is history

 

[benjenbav]

It's always interesting to see how long it takes for skimming deals: "if you save our ass you can have X% of all future sales" to change in the mind of the skimmee to be seen as an unjustified drag on the business and one which was only ever intended to be, "...you can have X% of all future sales for Y years."

 

[jfm]

It's always interesting to see how long it takes for skimming deals: "if you save our ass you can have X% of all future sales" to change in the mind of the skimmee to be seen as an unjustified drag on the business and one which was only ever intended to be, "...you can have X% of all future sales for Y years."

But in this case the "Y" was in there ab initio, BJB. The skimmee ended the contract in accordance with its terms. Inappropriate for me to add more detail than that

 

[benjenbav]

But in this case the "Y" was in there ab initio, BJB. The skimmee ended the contract in accordance with its terms.

Ah.

 

[Deleted User YDKXO]

It's always interesting to see how long it takes for skimming deals: "if you save our ass you can have X% of all future sales" to change in the mind of the skimmee to be seen as an unjustified drag on the business and one which was only ever intended to be, "...you can have X% of all future sales for Y years."

I wasn't suggesting that it was an open ended agreement. Very likely there was a time period written into it and it may well have been renewed several times over the years. As a manufacturer there is advantage in such an agreement in terms of dealing with only one distributor rather than many. I don't doubt that the Fairline management took a decision to end it within the terms of the agreement although this may have come as a shock to Peters as they may have been expecting automatic renewal.

 

[MapisM]

this may have come as a shock to Peters as they may have been expecting automatic renewal.

Well, that's quite a different interpretation of what happened, compared to jfm statement "Brian Peters simply made a bad business judgement in losing FL". Not that I really care so much, but now you made me curious!...
...also because I've heard funny stories about the former FL Italian distributor, but I don't want to talk of something heard through the grapevine.