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Thanks Courtney.
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Interesting. Also helps begin to explain a few things.
 

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Thanks Courtney.
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A ruse to get the City off their backs? Who's got money to buy a boat business nowadays? A boat business? About the last thing you want to buy right now.
A great brand, with great designs, production facilities, at a bargain basement price. Might be a great time.
 

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A great brand, with great designs, production facilities, at a bargain basement price. Might be a great time.
Boats are just capital intensive, low margin items. First off, from what I understand, dealers only have about 10% margin on new boats...probably higher on semi-production boats like Tartan.

Manufacturers have to back up or offer carry/trade financing on dealer inventory. Otherwise, what dealership has $1-$2MM to hold 3-4 boats at their paddock with all the associated maintenance that goes on top!

Add to that, the manufacturing process is incredibly commodity driven. Unless an order/deposit is placed, a manufacturer has to commit tremendous resources right up front to get all the materials to build a boat.

Add to that, the boat market is so tied to the overall economy...much more so than cars that eventually wear out. Nobody ever says "I need a new boat..my old one is falling apart" like they say "I need a new car...my old one is falling apart". So, inevitably...you get sales ONLY when times are good, and that just happens to be when your build costs (labor, materials) also tend to be the highest.

The final nail in the coffin of a lot of manufacturers. Nearly ever chain of the building/selling process involves leverage, except if you're public co. We're talking large lines of credit to get materials from manufacturing....large capital/finance agreements to keep your dealers in business....large loans to your customers to purchase new boats. And guess whats happened to leverage in the marketplace? So, unless you're 'big' already and can ride out this downturn, its likely we'll see many many smaller, non-public manufacturers go by the wayside. Call it the late 80s all over again.


Its a lose lose proposition. High up front capital, low margins relative to manufacturing capital...and heavily leverage driven.
 

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I think the future of semi-custom builders is the "do one thing, do it really well" arena. Purpose built boats.

Unfortunatley, you then have to compete with your used market heavily. Who would pay $500k for a new Valiant 42 when you can get a used one for a fraction of that.
 

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Thanks Courtney.
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nO- It's all relative. Yes many will go under in the up coming future and no one will step in to save them all. However, someone will step in to buy up a few of the better brands that they can get at a bargain. Tartan may just be one of the latter. They may even decide to buy them up and sit on it for a year or two. The economy will recover at some point in the future and there are still people/companies with pleanty of money. I am familiar with the concept. Trust me when I say my business is probably one of the top 5 enconomy/commodity driven industries around.
 

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nO- It's all relative. Yes many will go under in the up coming future and no one will step in to save them all. However, someone will step in to buy up a few of the better brands that they can get at a bargain. Tartan may just be one of the latter. They may even decide to buy them up and sit on it for a year or two. The economy will recover at some point in the future and there are still people/companies with pleanty of money. I am familiar with the concept. Trust me when I say my business is probably one of the top 5 enconomy/commodity driven industries around.
I did not realize that blow-up sheep had taken over the top 5 spot.

- CD
 

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Telstar 28
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Hmm... maybe the upcoming sale is why they applied pressure to have the sailnet thread on them removed.
 

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NoghtOwl...

my grand mother used to say, "if you can't stand the heat, don't come in the kitchen"...

Tartan was great, they blew it..because they didn't know how to adapt to the market...survival of the fitest...many others did and sell boats...

They went for the rich guy...guess what...rich guys buy power boats...they should have made some compromises...granted the product would suffer, but they would survive..

After all Beneteau, Moody, Gib Sea, Halberg, Swan all survive..why????

GOOD MANAGEMENT..that's why...it's all good management..

Actually their crapy management was visible in boats I saw with issues...
 

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nO- It's all relative. Yes many will go under in the up coming future and no one will step in to save them all. However, someone will step in to buy up a few of the better brands that they can get at a bargain. Tartan may just be one of the latter. They may even decide to buy them up and sit on it for a year or two. The economy will recover at some point in the future and there are still people/companies with pleanty of money. I am familiar with the concept. Trust me when I say my business is probably one of the top 5 enconomy/commodity driven industries around.
I wish it were just the economy/commodity cost trap. This is mostly around leverage. Big companies are having trouble raising short term working capital and are at risk of default. I'm talking major retail brand names like Linens & Things, Sound Advice...etc. Thousands of employees, hundreds of locations...deep trade accounts, and yes, even cash on hand!

Now, how does that play with small businesses, which lets face it, most of our great brands really are. Even Catalina I'd say is a "smallish" business which doesn't have access to leverage that a Group Beneteau does.

It used to be "excess liquidity in the system looking for a home" would invest in things returning 7,8...9% a year. Now, it seems like a return of less than 22% is unheard of in terms of private equity. G'luck meeting that debt coverage APR selling boats!
 

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Warm Weather Sailor
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It's a very small market. I was surprised to learn that less than 2000 new boats over 30 feet were sold in the US last year. As for buying assets there's molds for CS, Bayfield, Nonsuch, Saga, Niagara, and many other companies sitting in fields all over the place. And those were just a few of the Canadian companies that disappeared. Now Saga went to California first and then disappeared. The C&C brand has been unique having more lives than a cat but the new C&C's don't have the same cachet as the old ones so this time it may be the end. Tartan has always been in the same market as Sabre. Maybe Sabre'll buy the molds and put them in a field.
 

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One would think it much easier to buy an existing boat-building business, even one in trouble, than to start up a brand new one. That is, if one wanted to be in the boat-building business. And name recognition ain't chopped liver, neither!
 

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all good points.

VC/PE is standing on the sidelines for the most part - and for the most part are expecting double digit returns - that would be hard to believe by acquiring a boat business - unless they planned on retooling for something else.

that said - IRG capital claims they have investors - and would be interesting to see what the business plan looks like...hopefully sufficient due dilligence was done...




I wish it were just the economy/commodity cost trap. This is mostly around leverage. Big companies are having trouble raising short term working capital and are at risk of default. I'm talking major retail brand names like Linens & Things, Sound Advice...etc. Thousands of employees, hundreds of locations...deep trade accounts, and yes, even cash on hand!

Now, how does that play with small businesses, which lets face it, most of our great brands really are. Even Catalina I'd say is a "smallish" business which doesn't have access to leverage that a Group Beneteau does.

It used to be "excess liquidity in the system looking for a home" would invest in things returning 7,8...9% a year. Now, it seems like a return of less than 22% is unheard of in terms of private equity. G'luck meeting that debt coverage APR selling boats!
 

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Hope those sailors that bought a Tartan are pleased with their purchase and lack of a valid warranty now [if they fold]. What happens to the beloved C&C brand if their parent company folds up or is bought by another boat company? Maybe they can go beg for a bailout from Congress like the Big Three automakers.

Good luck Tartan & with luck you will get some prudent management.
 

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I did not realize that blow-up sheep had taken over the top 5 spot.

- CD
Now i am OFFENDED that a MOD would make a statement like this.:mad:

This is the year 2008 and change.Blow up sheep are so 1990's....We all know that MEMORY FOAM FILLED SHEEP are so much better while tied with the enclosed halter to the BBQ on the rail.They cum with a option for 1 seaboot also...Ask me how DAD knows about this opton:D

Mark
 
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