New (majority) owners for Princess Yachts!

[jfm]

@jfm always seems to offer a balanced perspective, particularly for someone who spends his life designing boats…. I never felt nervous or that money was an issue during our build, maybe I had the wool pulled but I don’t think so.

I think you were right there Henry. The story here is only that if Princess management had taken different decisions they might have made a ton of profit on 200 boats/year, but in fact they ended up somewhere a bit too close to break even. That means the 2007 shareholders didn't do well on this particular investment, but at the same time Princess itself hasn't been at all close to bankruptcy, so your deposit money was safe imho. Of course customers also need to think about their dealer maybe going bankrupt but I don't think that was much of a threat with Argo.

 

[dunedin]

Yep very sure. They have made the odd quarterly operating profit, but are yet to make a full year profit.

Er, have you looked at the financial statements I linked to - their public records show FY profits in 2020 (tiny), 2021 (moderate) and 2022 (big)

 

[henryf]

I think you were right there Henry. The story here is only that if Princess management had taken different decisions they might have made a ton of profit on 200 boats/year, but in fact they ended up somewhere a bit too close to break even. That means the 2007 shareholders didn't do well on this particular investment, but at the same time Princess itself hasn't been at all close to bankruptcy, so your deposit money was safe imho. Of course customers also need to think about their dealer maybe going bankrupt but I don't think that was much of a threat with Argo.

So what changes do you think we will see over the next 2-3 years at Princess then?

If you’re unable to answer because they’ve got you on a huge retainer I will of course understand, just PM me the inside scoop

 

[jfm]

I have no idea, don't know the new owners, and don't have any data. But...

1. I'd expect a cut in marketing spend (because imho there is zero marginal benefit imho in the last few £million) including cutting any staff who might make videos that damage or at least tread water with the brand , not enhance it.

2. And I'd expect a subtle slow down in new model launches/replacement cycles - useful to take a leaf out of Sanlorenzo's book here - they evolve their look and style much more slowly yet the company is worth ~ 30x as much as Princess. Perhaps marketing folks would object, but actually they wouldn't due to point 1 above

3. I'd change some aspects of design/interiors etc.

4. Maybe production efficiencies but I don't have the data to know. Particularly on bigger boats, where they seem unable to make money

Remember the new owners could do pretty well if they just find £10m more ebitda

 

[henryf]

I have no idea, don't know the new owners, and don't have any data. But...

1. I'd expect a cut in marketing spend (because imho there is zero marginal benefit imho in the last few £million) including cutting any staff who might make videos that damage or at least tread water with the brand , not enhance it.

2. And I'd expect a subtle slow down in new model launches/replacement cycles - useful to take a leaf out of Sanlorenzo's book here - they evolve their look and style much more slowly yet the company is worth ~ 30x as much as Princess. Perhaps marketing folks would object, but actually they wouldn't due to point 1 above

3. I'd change some aspects of design/interiors etc.

4. Maybe production efficiencies but I don't have the data to know. Particularly on bigger boats, where they seem unable to make money

Remember the new owners could do pretty well if they just find £10m more ebitda

Ok, I was intrigued on your thoughts.

I also feel there might be a rush to replace models sometimes when actually they are still selling quite well. Sometimes the new model is surprisingly similar to the old one so it’s more of a facelift than the brand new model.

It wouldn’t take a massive increase in profit per unit to see an overall profit. I know of late there have been supply problems which reduces production numbers and that impacts profit dramatically.

In terms of marketing that’s a tricky one. I thought they put on a great show at Düsseldorf and they do have to display their wares. In some territories it will be the local dealer who foots the bill, shows like the Swanwick show are a cheap way for the UK dealer to market themselves. It must be tempting to just pull out of the shows when you’re sold out for the next 2 years but I guess you need to play the long game and sometimes the shows are a lifestyle benefit to marque owners. I really appreciate tickets and a bit of love. It makes me feel part of the Princess family. They do a good job at the factory when you’re having a boat built as well.

I’ve always seen Sunseeker as the masters of publicity and Princess the shy wall flower in comparison, almost a bit embarrassed to sing their own praises but maybe that’s changing. As a brand owner I like the slightly more modest and conservative approach, I wonder if if helps sell the made in Britain image as well?

There are some videos floating around which make me cringe but I’m not sure they are Princess factory videos, more individual dealer ones.

I look forward to seeing where things go. There’s definitely potential, it just needs some clever driving at the top.

On a final point I chatted a bit about profitability versus size at Düsseldorf and actually it was the smaller stuff which struggled. I got the impression the larger stuff was selling quite well and profitable, I think that’s where their production investment is planned to improve/ increase the X and Y class capacity.

 

[ari]

1. I'd expect a cut in marketing spend (because imho there is zero marginal benefit imho in the last few £million) including cutting any staff who might make videos that damage or at least tread water with the brand , not enhance it.

I'm curious about the videos that staff have been making which damage the brand. There was a pretty mad anime video to do with the R35 (that's another subject!), but everything else I've seen from Princess has been pretty tame, inoffensive stuff. I've clearly been missing something?

 

[henryf]

Princess M Class Luxury Superyachts - Princess Motor Yacht Sales

I still think the video on here for their M class was brilliant and very clever.

 

[PowerYachtBlog]

Princess M Class Luxury Superyachts - Princess Motor Yacht Sales

I still think the video on here for their M class was brilliant and very clever.

That video was brilliant, but more for super yachting in general then Princess alone

 

[benjenbav]

That video made me ashamed to belong to the same species, never mind putting me off that brand.

 

[henryf]

That video made me ashamed to belong to the same species, never mind putting me off that brand.

Why?

Because you felt it emphasised the “us and them” division in society?

It’s not a boating life which I aspire to on a personal level but professionally I provide a service to our charter guests. Occasionally customers assume we are servants but in 98% of cases it’s a happy balance of equality.

I think there’s a big difference between Below Decks and that private yacht. Ultimately if you want to retain good staff in a crowded market you either have to pay through the nose or treat people well.

Allow for a bit of artistic licence and the relationship twixt crew and owners is happy.

Or did I miss-read your feelings ?

 

[henryf]

Just to add: The nature of this forum means we are all practical skippers on our boats rather than clients or serviced owners so we will probably identify more with the crew.

Princess have a foot in both camps. The V40 will be owner operated, the X95 is almost certainly crewed and at some point in the range there’s a blend.

When I get my X80 out in Thailand I’ll have crew because I’m too old to wash it…….

 

[PowerYachtBlog]

When I get my X80 out in Thailand I’ll have crew because I’m too old to wash it…….

Even if you are young it is too big, and after that no energy left to party. Might be a benefit that you have some change for fuel....

 

[jfm]

I'm curious about the videos that staff have been making which damage the brand. There was a pretty mad anime video to do with the R35 (that's another subject!), but everything else I've seen from Princess has been pretty tame, inoffensive stuff. I've clearly been missing something?

I meant, for example, this series

Look at the room Kiran Haslam is sitting in - does their target market want a boat styled liked that? Ross Gill is a nice guy I'm sure, but he isn't the guy I would put in front of the camera in that role.

 

[benjenbav]

Why?

Because you felt it emphasised the “us and them” division in society?

It’s not a boating life which I aspire to on a personal level but professionally I provide a service to our charter guests. Occasionally customers assume we are servants but in 98% of cases it’s a happy balance of equality.

I think there’s a big difference between Below Decks and that private yacht. Ultimately if you want to retain good staff in a crowded market you either have to pay through the nose or treat people well.

Allow for a bit of artistic licence and the relationship twixt crew and owners is happy.

Or did I miss-read your feelings ?

Well, I initially got cross about the way the servants were treated like slaves - no eye contact as the woman with the wire up her back served drinks. All the crew looked downtrodden and fed-up. Then there were the lingering shots of the young serving woman’s posterior and the child undressing - I wondered if they’d got Ghislaine Maxwell in to help with the filming. Plus the overwhelming smugness of the entitled owners.

 

[benjenbav]

I meant, for example, this series

Look at the room Kiran Haslam is sitting in - does their target market want a boat styled liked that? Ross Gill is a nice guy I'm sure, but he isn't the guy I would put in front of the camera in that role.

 

[Portofino]

Well, I initially got cross about the way the servants were treated like slaves - no eye contact as the woman with the wire up her back served drinks. All the crew looked downtrodden and fed-up. Then there were the lingering shots of the young serving woman’s posterior and the child undressing - I wondered if they’d got Ghislaine Maxwell in to help with the filming. Plus the overwhelming smugness of the entitled owners.

I was gravely critical a yr or two back when H initially posted this .Your Ghislaine Maxwell ^ was exactly the train of thought I mentioned . And forum flamed .Irrc thats why H put me on ignore .

Having re seen it and compared it to stuff since from others Ferretti eg , Another criticism ( I am no marketing man ) is age .
Age despite all this woke ageism doesn’t sell well .

You have to sell the dream in “ I want a piece of that lifestyle “ “ that could be me “
A few brand ambassadors are needed at Priny too .

Females
Yup sex sells but the subtle use of females needs to fit in with be todays social moral values .That’s a tight narrow band .
Princess using female children running about in basically normalised underwear is not acceptable imho and suspect BJB s and many others as well .Garry glitter may like it

So here is imho a far better way to sprinkle sex / females into a vid .Note here age , her attire with vail thingy .
Allowable deliberate innuendo plying on male ego = to sell the thing .

 

[henryf]

I meant, for example, this series

Look at the room Kiran Haslam is sitting in - does their target market want a boat styled liked that? Ross Gill is a nice guy I'm sure, but he isn't the guy I would put in front of the camera in that role.

I can see how people looking for their late night literary review fix might be disappointed. No mention of the author's treatment of sexual tension between lead characters in the book.....

I don't know what Princess' corporate image is really. I still think they are a shy retiring wall flower, not saying that's a bad thing. Very hard to make these videos, particularly when there's a committee trying to design everything. Also with so few units being sold getting enough momentum for a Q&A session is essentially impossible.

 

[TonyR123]

...In terms of marketing that’s a tricky one. I thought they put on a great show at Düsseldorf and they do have to display their wares. In some territories it will be the local dealer who foots the bill, shows like the Swanwick show are a cheap way for the UK dealer to market themselves. It must be tempting to just pull out of the shows when you’re sold out for the next 2 years but I guess you need to play the long game and sometimes the shows are a lifestyle benefit to marque owners. I really appreciate tickets and a bit of love. It makes me feel part of the Princess family. They do a good job at the factory when you’re having a boat built as well.

I’ve always seen Sunseeker as the masters of publicity and Princess the shy wall flower in comparison, almost a bit embarrassed to sing their own praises but maybe that’s changing. As a brand owner I like the slightly more modest and conservative approach, I wonder if if helps sell the made in Britain image as well?

....On a final point I chatted a bit about profitability versus size at Düsseldorf and actually it was the smaller stuff which struggled. I got the impression the larger stuff was selling quite well and profitable, I think that’s where their production investment is planned to improve/ increase the X and Y class capacity....

Think Henry has it spot on the Sunseeker v Princess comparison. I most definitely was not after a Princess boat possibly due to the perception of them being a bit boring (not just that reason). However the v55 changed my mind along with finish, etc. The hospitality at Dusseldorf was spot on and I do agree you soon get to feel "part of the Princess family", even though mine hasnt arrived yet. I do also quite like the modest/conservative approach. Dusseldorf they were short of a couple of boats for the stand due to availability.

The smaller boats now are possibly struggling due to price. Already if I was to spec the same boat now (bearing in mind I put a deposit down in August) it is around 15% more expensive. I expect the smaller boats in the range (v40, f45) struggle to absorb the additional costs?

 

[ari]

I meant, for example, this series

Look at the room Kiran Haslam is sitting in - does their target market want a boat styled liked that? Ross Gill is a nice guy I'm sure, but he isn't the guy I would put in front of the camera in that role.

It's not a brilliant video I agree, but to be fair, I think that was just Princess' attempt to stay connected to its customer base during the very difficult times of the pandemic. I'm not sure any of them claim to be George Clooney.

It wouldn't have occured to me to be put off by the room or assume that they were going to model their boat interiors on it.

 

[ari]

Well, I initially got cross about the way the servants were treated like slaves - no eye contact as the woman with the wire up her back served drinks. All the crew looked downtrodden and fed-up. Then there were the lingering shots of the young serving woman’s posterior and the child undressing - I wondered if they’d got Ghislaine Maxwell in to help with the filming. Plus the overwhelming smugness of the entitled owners.

That's a fantastic effort at being offended by something utterly inoffensive, well done! I've just rewatched it and I'm afraid I'd have completely missed the opportunity to be offended at any of that, I clearly need to try harder.

Interesting to see that it's had well over 1/2 million views, which is pretty impressive for something so niche and from a manufacturer (as opposed to a media channel like MBY or Aquaholic).