Growth, new jobs, optimism awash at Chris-Craft

Growth, new jobs, optimism awash at Chris-Craft

sfrater@bradenton.comFebruary 25, 2013 

MANATEE -- Local boat builders and their subcontractors foundered on the shoals of the great recession, when pleasure boats, emblematic of luxury, became the first thing cut from leaky corporate and family budgets. Former area players including Genmar Holdings Inc., Donzi Marine and Pro-Line Boats were all either closed, restructured during bankruptcy, moved, and/or sold, costing Manatee and Sarasota hundreds of jobs.

Yet Chris-Craft Corp., the oldest name in the industry -- and arguably the most glamorous -- survived the worst boat-sales disaster in living memory, and has "experienced growth annually for the last three years," says Kirsten Pedersen, marketing manager.

The 325 to 350 boats a year Chris-Craft currently produces are a fraction of the 1,400 boats the company was reported selling in 2000, which then represented about $50 million in sales.

But not only is Chris-Craft back in the black today, it's "growing at about an 8 to 10 percent annual rate in both units and revenues," said Chris-Craft President Stephen F. Heese. And that work, he says, means the company will be hiring "about a dozen new employees; cabinet and furniture makers, upholsterers, and laminators all within the next few weeks."

Hope floats for the company's newest offering: the Carina 21, introduced at last week's all-important Miami International Boat Show. The Carina, (meaning "My Beloved" in Italian) is the first of a 1920s retro design line of runabouts that carry the Chris-Craft brand's original DNA, loud and clear.

The prototype was completed just "24 hours before its unveiling" in Miami, Heese says, and was promptly sold to an unidentified Norwegian buyer for an estimated $70,000 to $80,000.

Website Boattest.com noted the classic Chris-Crafts and the Carina21 share DNA, style and design elements, but not much in the way of building materials.

"The classics were built of wood, today's are mostly fiberglass and composites," the review reads. Carina 21 comes "standard with a Mercury 5.0 L 260-hp sterndrive and is covered with polyurethane "Dark Graphite" paint which is polished to a high sheen. No boat builder executes that task with as much taste and art as does Chris-Craft so we can say "mission accomplished."

John Benchimol, owner of Harborside Marina in Clinton, CT, is one of Chris-Craft's largest dealers and registers a couple dozen unit sales annually. He always expected Chris-Craft to survive the recession.

"Chris-Craft, although they scaled back, were much less affected" by the collapse in boat sales, he said, "because they are dealing with a much higher echelon of purchasers."

Heese notes that Chris-Craft has continued to concentrate on the kinds of boats that made them successful.

"The market for stern drive and inboard boats, like Chris-Craft, is the largest part of the recreational marine market in dollar terms," he said. "The industry's "month on month" retail sales comparisons for this segment turned positive in October of 2012." By

comparison, "Chris-Craft's month-on-month retail sales comparison turned positive at the end of 2009 and we have grown from there."

That puts the company ahead of most others in the pleasure boating sector according to data supplied by InfoLink: Market Intelligence.

Over the decades, Chris-Craft has been associated with Hollywood stars and films including Marilyn Monroe in "Some Like it Hot," Henry and Jane Fonda in "On Golden Pond" and Tom Cruise in "Mission Impossible III."

Chris-Craft's fans include Thomas Edison, Henry Ford, Katherine Hepburn, Elvis Presley and Frank Sinatra. Timmy and Lassie; Tarzan, Jane and Cheetah were all photographed in Chris-Crafts. Even Presidents Franklin D. Roosevelt and John F. Kennedy owned one of their boats. The glamour seemed eternal.

Robust sales and profits led Chris-Craft in 2007 to expand to a new North Carolina plant with a hundred freshly hired employees. Then the financial markets delivered the jolt of a lifetime.

As Wall Street titans tottered in 2008, Providence, R.I.-based Textron Inc. saw heavy weather approaching and accordingly trimmed sails. It shrank its subsidiary financial corporation by more than two-thirds. The Textron subsidiary had financed a huge amount of recreational vehicles, including the boat industry.

According to the Providence Business News, the company liquidated approximately $7.9 billion of the$11.4 billion portfolio, effectively cutting anchor from the recreational marine industry at a time when Textron Financial was one of the two largest suppliers of cash for pleasure boat builders, dealers and would-be buyers. The glamour faded and the industry flat-lined.

In 2008 and 2009, Chris-Craft, like most industry players, took a severe beating. Sales tanked by 45 percent "from $65 million a year to about $35 million," said Heese, president. The new factory was closed and the workforce was more than halved from about 400 to fewer than 200.

National Marine Manufacturers Association president Thom Dammrich acknowledges that the recession had taken its toll on the industry over the past half-decade during which time "150 to 200 smaller brands disappeared."

"Improving economic conditions and what seems to be a resurgence in Americans' love for the outdoors, helped fuel steady growth in new power boat sales in 2012," he said. "A 10 percent boost at retail in 2012 is significant, as this is the first time since the recession we saw healthy growth across the powerboat market, which will create momentum in 2013."

Stephen Frater, the Herald's senior business reporter, can be reached at 941-745-7095.

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