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Old 06-30-2017, 11:01 AM   #1
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Breaking news: WM acquired by private equity firm

Announcement in yesterday's Soundings Trade Only daily email:

West Marine acquired by private-equity firm | Trade Only Today
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Old 06-30-2017, 11:54 AM   #2
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Interesting! I wonder what this means for those of us who use the store?
I suppose time will tell...
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Old 06-30-2017, 12:16 PM   #3
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Whatever your feelings are about WM Randy Repass is a boat guy, the private equity firm that is buying it are profit guys. Seems like these things don't turn out well.
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Old 06-30-2017, 12:38 PM   #4
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"Whatever your feelings are about WM Randy Repass is a boat guy, the private equity firm that is buying it are profit guys. Seems like these things don't turn out well."

True, but they are not spending $330Mil in order to trash the company Only time will tell.
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Old 06-30-2017, 01:03 PM   #5
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I'm sure WM enjoyed their profits before this acquisition. Why else would they look attractive to a buyer? I think "brick and mortar" businesses are in for a tough fight in the future. We will see!
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Old 06-30-2017, 04:09 PM   #6
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I wonder if they're going to move forward and focus more on internet sales?
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Old 06-30-2017, 04:11 PM   #7
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Wonder what happens to BoatUS?
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Old 06-30-2017, 04:17 PM   #8
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Good question but I bet they don't do much. I have to believe it's a cash cow for them.
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Old 06-30-2017, 04:40 PM   #9
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Thanks for posting this, OP

Very interesting. Will be watching to see how this turns our for us consumers!
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Old 06-30-2017, 05:14 PM   #10
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What happens to West Marine is totally irrelevant to me because their prices are so crazy and there are so many other good sources for marine equipment & supplies; I never go in there. They may have cornered the market elsewhere but not in New England.
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Old 06-30-2017, 05:32 PM   #11
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I'm with Brooksie. There are other places to shop online where I don't have to pay WA sales tax and the product prices are often lower.
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Old 06-30-2017, 05:39 PM   #12
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West has some great deals every now and then...us I agree having even an expensive store in town is better than none at all some days.

Shopping around is critical for marine supplies, it seems no one place is cheapest for all or carries what you are looking for.
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Old 06-30-2017, 05:44 PM   #13
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West Marine has been seeing growth from footwear, clothing, fishing equipment, and paddle sports. I'm guessing 60% of floor space is now dedicated to these groups. Boat equipment is shrinking. I would expect the trend to continue.

If I need something quickly I go to the nearest boatyard. Otherwise the internet.
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Old 06-30-2017, 05:54 PM   #14
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Lands End used to be a ship chandler ....you could buy lots of boat items, dingies and outboards from them...now they are all clothes.

Whether West goes that way or not...who knows.

But some places are thin on marina ship stores that carry a lot.

One West purchase Ive had lately was a shower sump while cruising...no marina stores around, wasn't waiting for regular delivery or paying onernight, and it was only anout 10 bucks more than ordering. So tbat was worth it to get going quickly.
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Old 06-30-2017, 05:55 PM   #15
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Well, Monomoy clearly thinks there is upside since they paid a 32% premium over the market price. It's value as a business in its current form is presumably reflected in it's current market price. I could understand if it were the first step in a consolidation move, but west already did that a long time ago. Maybe they plan to roll in a service angle to the business like GeekSquad. Given the high cost of marine services, and no corresponding need to perform or deliver, it could be a good idea. I just think they must have some bigger plan, and one that can't be carried out as a public company on a quarterly treadmill. Dell is a good example of a big (much bigger) company that did such a thing.
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Old 06-30-2017, 06:04 PM   #16
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Wonder what happens to BoatUS?
West Marine bought the BOAT/US products division (retail operation) in 2003. They'd already bought E&B Marine in 1996.

When they went public in 1993 with an IPO price of about $23, they were every boat owners favorite marine store...and everyone who had enough spare change to buy their stock did so. I was able get in at a little under $25...it quickly shot up to the low $70s and split 2/1...at which point I sold half my shares to buy my last boat. A good thing I did because their stock price has done nothing but go lower ever since. When it got down to around $19 I sold the rest and glad I did 'cuz it's continued to tank. The $12.97/share the new owners agreed to pay is actually higher than it's trading price has been for some time....for the past year it's been trading <$10, as low as $7.88 last fall. It shot up to 9.85 today, I suspect in anticipation of being able to sell those shares to the new owner for nice profit.

'Twill be interesting to see what the new owners are gonna do to try to turn it around....but although their stock hasn't been worth much, they've been profitable, even paying a decent dividend. Since it'll be privately held, they'll be the only investors now, so they should have plenty of incentive.
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Old 06-30-2017, 06:16 PM   #17
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Hopefully they will provide more competition in the industry. BTW they do have a Post Marine account that will sell you products at a discount, walk into the store and pick what you want go to pay and show your Post card for some decent discounts.
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Old 06-30-2017, 06:39 PM   #18
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Private Equity usually can see a big opportunity before entering, other wise they don't do it. They do some financial engineering while trimming employee numbers and cost, and reducing inventory of slow moving items in particular, and a year or two down the track relist and sell-out for mega-bucks. Seldom ends well for customers or anyone but the PE guys. I hope its different for WM, but chances are that in 5 years folks will be lamenting their demise.

The electronics shop chain Dick Smith in Australia is a classic example.
https://en.wikipedia.org/wiki/Dick_Smith_(retailer)
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Old 06-30-2017, 06:51 PM   #19
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Peggie. Good history of West and their stock price. I equate their pricing problem starting with the advent of Port Supply. None of the boatyards in my area do business with Port Supply but I know many people both here (Cape Cod) and in FL that have Port Supply cards by some nefarious means. This results in a 2 tier retail system: one for people that don't mind being "soaked" when they buy and one for people that are dishonest. I am not in either group.
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Old 06-30-2017, 08:33 PM   #20
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Quote:
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Private Equity usually can see a big opportunity before entering, other wise they don't do it. They do some financial engineering while trimming employee numbers and cost, and reducing inventory of slow moving items in particular, and a year or two down the track relist and sell-out for mega-bucks. Seldom ends well for customers or anyone but the PE guys. I hope its different for WM, but chances are that in 5 years folks will be lamenting their demise.

The electronics shop chain Dick Smith in Australia is a classic example.
https://en.wikipedia.org/wiki/Dick_Smith_(retailer)
Right on, private equity buyouts here,incl by US firms like KKR, are usually followed by a rationalization of the business before it gets flipped for a profit,often to retail share/stock buyers who may or may not be getting something worthwhile. The Dick Smith is a good/bad example. Myer Stores was another. Customers come second, except you need to look like you are retaining them, to do a profitable flip.
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