Princess Motor Yachts owned by the richest man in the world !

[henryf]

As everyone knows Elon Musk is the world’s richest man…….

…..until now. It seems his Twitter buying and a softening of Tesla share price has knocked him off the top spot.

Step in Bernard Arnault the big cheese at LVMH ultimate owners of British motor yacht builder Princess.

 

[henryf]

New article here:

Elon Musk no longer world's richest man

 

[Boat2016]

Would much rather own a Princess than a Tesla.

 

[Zing]

As everyone knows Elon Musk is the world’s richest man…….

…..until now. It seems his Twitter buying and a softening of Tesla share price has knocked him off the top spot.

Step in Bernard Arnault the big cheese at LVMH ultimate owners of British motor yacht builder Princess.

Great for the company and the brand, but crap for customers. He’s the No1 for a good reason. Expect to pay more for your next boat.

 

[paradave]

. Expect to pay more for your next boat.

Why?

 

[Zing]

Arnault's genius is the art of luxury branding. Branding is the business strategy of using what is usually expensive marketing to obtain a higher margin. Because of the added marketing costs and profit the end result is usually a higher price for a similar or slightly superior product to what you would otherwise have had without the marketing.

 

[petem]

He'll need that cash !

 

[paradave]

Arnault's genius is the art of luxury branding. Branding is the business strategy of using what is usually expensive marketing to obtain a higher margin. Because of the added marketing costs and profit the end result is usually a higher price for a similar or slightly superior product to what you would otherwise have had without the marketing.

You’re aware ‘he’s’ owned them for 14 years?

 

[Zing]

You’re aware ‘he’s’ owned them for 14 years?

I don't think you are correct. I realise there was an involvement and I presume (possibly incorrectly ), that he bought the rest of it as the OP stated he was the ultimate owner. It was in the news recently that there were problems with the Russian owners, reported in this article where the company was said to be up for sale. If Arnault owned it or even if he had a majority stake then a sale wouldn't be necessary.
British luxury yacht-builder Princess sets sail to find new owners

 

[paradave]

Maybe the timeline isn’t accurate, I’m not sure anymore.
I was more interested to hear why Musk’s reduction in fortunes would push boat prices up.

 

[billskip]

I don't think you are correct. I realise there was an involvement and I presume (possibly incorrectly - that he bought the rest of it as the OP stated he was the ultimate owner). It was in the news recently that there were problems with the Russian owners, reported in this article where the company was said to be up for sale. If Arnault owned it or even if he had a majority stake then a sale wouldn't be necessary.
British luxury yacht-builder Princess sets sail to find new owners

According to your theory in post# 6 it maybe necessary to sell it because it cant meet his marketing strategy any longer.

 

[[194224]]

If Arnault owned it or even if he had a majority stake then a sale wouldn't be necessary.

I'm not sure I follow. The brand have some adverse press due to the Russian connection. I don't understand why under those circumstances a sale wouldn't be sought. It is well document that he bought Princess in 2008; he later formed a partnership with Catterton. But that aside I don't understand the " a sale wouldn't be necessary" assertion.

 

[henryf]

I don’t believe there is or was any Russian ownership. Fairline were owned by the Russians at one stage I think.

The Sky news article is linking two unrelated stories. Princess has been on the market for some time and in recent months following the Ukraine invasion Russian owned boats have been seized in a worldwide asset hunt. In relative terms Princess haven’t been affected in a huge way, I think Sunseeker have probably seen more activity although the real targets are European built mega yachts, not the small change stuff built in the UK.

Not sure why the LVMH team got involved with Princess. It’s a great brand with really strong design and engineering pedigree but its a production facility that requires thousands of hours per unit to produce with many supply chains. Even if LVMH could double demand production couldn’t deliver and whilst there is some scope for price increase the competitors help to steady the ship. I would actually say Princess are still hiding their light compared to other brands which isn’t surprising as they make so few boats on a world stage, around 250 or so. It’s impressive when you see the facility but LVMH brands usually ship by the million, certainly 10s or 100s of thousands to enable global reach.

By comparison Rolls Royce sold a little over 5,000 units last year.

 

[jfm]

Only one problem with this thread Henry: Lvmh are not ultimate owners of Princess and never have been, in the last 14 years or at any other time. As I’ve said on here a zillion times.

(M. Arnault drives a Feadship by the way)

 

[[194224]]

I don’t believe there is or was any Russian ownership.

There isn't or wasn't . The Russian connection I referred to was the seizure of several "luxury yachts" around the world to which you refer. I should have made it clearer, sorry.

 

[Zing]

I'm not sure I follow. The brand have some adverse press due to the Russian connection. I don't understand why under those circumstances a sale wouldn't be sought. It is well document that he bought Princess in 2008; he later formed a partnership with Catterton. But that aside I don't understand the " a sale wouldn't be necessary" assertion.

The reason for my comment is minority shareholders have no power to sell a company, but a majority shareholder can.

 

[[194224]]

The reason for my comment is minority shareholders have no power to sell a company, but a majority shareholder can.

Yes that much is obvious. I still don't understand why a sale wouldn't be be necessary. That's the bit I am missing but I can live under that little cloud of ignorance.

 

[jfm]

The reason for my comment is minority shareholders have no power to sell a company, but a majority shareholder can.

Very often not true, btw

 

[jfm]

I don’t believe there is or was any Russian ownership. Fairline were owned by the Russians at one stage I think.

The Sky news article is linking two unrelated stories. Princess has been on the market for some time and in recent months following the Ukraine invasion Russian owned boats have been seized in a worldwide asset hunt. In relative terms Princess haven’t been affected in a huge way, I think Sunseeker have probably seen more activity although the real targets are European built mega yachts, not the small change stuff built in the UK.

Not sure why the LVMH team got involved with Princess. It’s a great brand with really strong design and engineering pedigree but its a production facility that requires thousands of hours per unit to produce with many supply chains. Even if LVMH could double demand production couldn’t deliver and whilst there is some scope for price increase the competitors help to steady the ship. I would actually say Princess are still hiding their light compared to other brands which isn’t surprising as they make so few boats on a world stage, around 250 or so. It’s impressive when you see the facility but LVMH brands usually ship by the million, certainly 10s or 100s of thousands to enable global reach.

By comparison Rolls Royce sold a little over 5,000 units last year.

I think you inadvertently touch there on Princess’s big mistake Henry.

it’s a great product, brand and everything else, but only in the sub 24m category. The brand doesn’t stretch profitably any further than that. Poor Chris Gates didn’t get that when he took the firm into 40 metres territory and it destroyed shareholder value. Even their recent retreat to max 95 feet is too big. They should stick at <24 metres and they could then begin to make money, which they haven’ t done for how long - a decade?

When you get to the size Princess stretched to, where folks are spending €$£10m, 20m, or more, the Princess brand does not have enough cachet alongside the others and the build quality (silicone beaded joints in cabinet work, and a list of other sins) doesn’t work.

it’s a great company/product/brand at 24m and they could and did make money in that zone. That’s where they should be. Others make money in 24m+ but they build their boats differently and have brands that work and have cachet/respect/resale demand. And, frankly, these others are pleasingly free of the “we know best and we do it best” slightly annoying arrogance that Princess prospects get, in my exp.

 

[jfm]

Yes that much is obvious. I still don't understand why a sale wouldn't be be necessary. That's the bit I am missing but I can live under that little cloud of ignorance.

It’s not obvious at all, and is in most cases wrong. If you own say a 60% majority and I own a 40% minority you can’t without my agreement sell the company. You might be able to sell your 60, but not my 40. And of course most buyers won’t want your 60 because they would then have Mr 40 sticking his oar in.
It works differently in practice but is thread drift.
A sale of princess is commercially necessary, one of these days.