This
Name Means Boats
by Bob
Andelman
Thanks to a trio of investors, Chris-Craft, the 141-year-old
boat-builder,
is undergoing a revival.
T HERE
ARE BOATS AND THEN THERE ARE Chris-Craft boats. FDR, for
example, owned a Chris-Craft boat, as did JFK. The boats
also made for muscular, sexy co-stars on the silver screen,
commanded by everyone from Frank Sinatra and Elvis Presley
to Bruce Willis. Once among the greatest names in premium
boat building, the company hit on hard times two years ago.
Bankruptcy. Layoffs. It looked like the end of the production
line for the proud, 141- year-old Sarasota-based company.
British
investor Stephen Julius and his partner, Tampa's Stephen
Heese friends who met as students at Harvard Business
School weren't ready to see the once revered brand sink
without a fight. Their Stellican Ltd. bought the brand from
Genmar Holdings (which bought it in former owner Outboard
Marine Corporation's bankruptcy pro-ceedings) in December
2000, restarted production in September 2001 and has so
far engineered a remarkable turn of events despite a faltering
world economy.
 |
| Stephen
Julius, Chris-Craft chairman. |
"It's
probably the most famous label in the world," says
Julius, chairman of the board of Chris-Craft Ltd. "In
France, 'Chris-Craft' is in the dictionary. It means 'small
boat.' And if you need to hire a small boat in Greece, just
say 'Chris-Craft.'"
Chris-Craft
(http://www.chriscraftboats.
com/), which shocked the local community by lay-ing
off 400 workers in December 2000, has made 200 new hires
in the last 12 months and introduced six new models, all
posi-tioned at the pre-mium end of the market. Under new
management, the brand is foregoing its former role as a
manufacturer of boats in a variety of price ranges and sizes.
"We're
repositioning the company, selling a range of boats from
22 feet to 60 feet," Julius says. "Right now our
biggest is 43 feet; we're concentrating on the big boats.
We eliminated four models that accounted for 75 percent
of thee company's sales because they didn't reflect what
we thought Chris-Craft was all about."
For
Julius, this is actually his second shot at turning around
a venerable boating brand. He previously accomplished a
miraculous turnaround at Riva Yachts, a premier Italian
boat manufacturer dating back to 1842 and also left for
dead at one time.
"Chris-Craft
is an extraordinary opportunity that we are privileged to
have," Julius says. "We moved quickly when the opportunity
arose. I think it's the biggest opportunity in boating today.
We have a very specific vision. I bring a background in
very high quali-ty boats. I think that's why our products
are meeting with such enthusiasm in the marketplace."
Early
on in the Julius/Heese steward-ship, there was concern in
Sarasota that the Chris-Craft manufacturing opera-tion might
be relocated out of state. Julius says those fears were
unwarranted. "Chris-Craft was always going to stay in Sarasota
under our ownership," says Julius, who commutes every week
to Sarasota from his home in London. (Heese, the presi-dent
of Chris-Craft, is on site every day.) "We have a beautiful
plant with a test area in back. The chamber of commerce
has been very supportive. We are here to stay."
If anything
changes, he adds, it will be an increase in the size of
the existing plant and the addition of several hundred more
jobs. And finding the next hundred employees will probably
be easier than the first hundred. A lot of the boat workers
laid off when the company declared bankruptcy under previous
ownership found other jobs or were simply skeptical of the
new owners.
"We
had a lot to prove to them," Julius acknowledges. "But every
month, it becomes a circle. We are being approached every
day by people who want to come back. At the beginning, labor
was a real issue. But that's much less of an issue today."
It isn't
just ex-employees that Chris-Craft is attempting to woo
back into the fold. When the company crashed, so did its
dealer network. Today, Chris-Craft boats are handled by
a mere 25 licensed dealers in the United States, down from
80, pre-bankruptcy. Julius expects the number will reach
40 to 45 by year-end. In truth, he isn't interested in reconnecting
with all of the manu-facturer's previous sellers, many of
whom existing on low-end sales.
"It
is our objective in the next five years to sell $100 million
worth of boats and go north from there," Julius says. "I
tend to be fascinated by brands, brands that have lost their
way a been brought back to life. Even our fiercest competitors
are rooting for us. There's something about seeing an old
brand like us succeed."
Unlike
Riva, where Julius restored the company's luster and profitability
then sold out in 2000, he insists he is with Chris-Craft
for the long haul.
"This
is my main business interest. It's a big project,"
he says. "This is definitely a fix-and-stay deal. I
regretted selling Riva. I won't repeat the mistake here.
The opportunities to grow this business are immense. It's
going to require years, if not decades to reach potential.
There's no reason this cannot be a $200 million to 400 million
business. We're the underdog today, but we're deter-mined
to change that."
Chris-Craft
History
In boating circles, Chris-Craft is con-sidered something
of a legend in its own time. Some say the ages old boat
building Sarasota company is "in a class of its own."
Be that
as it may, Chris-Craft has been around a long time. It was
founded in 1874 when Christopher Columbus Smith and his
older brother Henry decided to build rowboats. Later, they
improved by building what were called duck boats for hunters.
And
so it went. Soon, soon there were gasoline engine powered
boats that offered speed, style and comfort and the boat-building
icon was on its way to fame.
By 1922,
Christopher Smith had set out on his own with a company
called Chris Smith & Sons Boat Co. This peri-od saw big
production going hand in hand with comfort, style and luxury
in craft. In 1929, the company sold 946 boats with a sales
value of $3.5 million. Most of its boats back then were
made of wood. But that stopped in 1972, with the last production
of wooden boats.
