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Old 08-29-2015, 12:57 AM   #1
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Grand Banks makes me sad....very sad...

Well, first the easy part. Losses for the year US$3.4 million on sales of under $28 million.

Now the boat lines. It's all Eastbay and Palm Beach attitude. The existing lines have been drastically cut back. Only 2 Heritage models and 2 Aleutian left and I'm not holding my breath expecting more of them to be built. You see it all in their new 60' model, the one they're calling a Grand Banks. If you want to look at the design (none finished yet) then here's a link.

60 Grand Banks - New Model | Bluewater Yacht Sales

Interesting that it's not even on their web pages. You have to find it at a dealer's site.

Twin 725 hp Volvo's.

The hull and superstructure will be built using the latest technology in composite boat construction using E-Class Corcell and Airex foam, Duflex paneling, stitched multi-axial fabric, vinylester and epoxy resins to produce an extremely strong and lightweight hull.


65' overall and weighing only 51,500 lbs. The Aleutian 55, about the same size, weighed 75,000 lbs. Draft 3'6". And not deep enough for a real main deck and a lower deck. Just a small salon up and 2 1/2 staterooms forward and down. More an Eastbay or Palm Beach design than any Grand Banks ever built. So, rather than updating the line they've basically thrown the line out and built a new boat calling it Grand Banks. In my mind it sure isn't.

Oh as I knew would happen, they held the earnings release until the markets were all closed for the weekend. Bury that bad news.

Total market cap was down to US$27.5 million, before the release. We'll see where it is next week.
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Old 08-29-2015, 01:18 AM   #2
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Yes, I agree there has been huge departure from their past design concepts. That 60' GB looks just like a larger version of this Aussie boat, the New Fairways 37 F/B.

New 2013 Fairway 37 Flybridge Power Boat QLD - Yacht & Boat

http://www.bluewateryachtsales.com/new-models/180/
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Old 08-29-2015, 01:24 AM   #3
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Yes, I agree there has been huge departure from their past design concepts. That 60' GB looks just like a larger version of this Aussie boat, the New Fairways 37 F/B.

New 2013 Fairway 37 Flybridge Power Boat QLD - Yacht & Boat

60 Grand Banks - New Model | Bluewater Yacht Sales
Not a coincidence. Their new CEO, Mark Richards, was the prior owner of Palm Beach Yachts and did come to them from Australia. This is clearly what he sees as the direction of the company.
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Old 08-29-2015, 01:32 AM   #4
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B-it is sad to see such and old and esteemed name sink to the level that American has. They will not build the 60' unless and until they get a buyer. I would doubt that they have even invested in the molds yet. Looking at the pictures, it looks like a three mold boat (hull, deck and superstructure). The tooling costs alone on a 60 footer are going to run something around $1.5M. As I think Marin has noted here, they just really got left in the dust over the past 15 years or so. I have not looked at the Eastbay or Palm Beach, so I can't speak to their quality, but it seems to me that that market niche is at least as crowded as the cruising/trawler/SD market they have abandoned. Does not bode well for their future.
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Old 08-29-2015, 02:03 AM   #5
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Interesting. I like the new Fairway, proven modern boat well priced. I like traditional GBs too. This one, not so sure.
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Old 08-29-2015, 04:18 AM   #6
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Eastbays, at least the ones I've been on, are beautifully made boats.

While it's anyone's guess if Grand Banks (the company has not been American Marine for ages) will succeed, i give them credit for finally abandoning their ancient, 1960s designs and attempting to create (or aquire ready made) products more in tune with today's and tomorrow's markets.

If they're smart they will eliminate the name Grand Banks altogether. Even though we have one, the name Grand Banks is to me like the name Studebaker or De Soto or maybe Packard. Great names and products in their day, but in essence they're old people's machines. That's not an insult nor does it mean in the case of GBs that only 60-pkus year old people buy them.

There are a lot of GBs in our harbor including a substantial charter/dealer fleet. We walk by these boats every time we go to our boat, and just about everyone we see who owns or is chartering these GBs is in the baby boom generation or older.

Younger people strolling the docks or actively looking at for sale boats are either looking at sailboats or more contemporary looking power boats.

No matter how well built your product is, no matter how high its reputation is, no matter how impressive its image is, if you keep building for the people who made that reputation and image in the first place, you will go out of business.

If Grand Banks is to have any hope of surviving they have to design and build for the upcomng generations of boat buyers. And those generations regard the "traditional" Grand Banks boats as classics in the same category as the the proud wood yachts and classic designs of the first half of the 20th century. Cool to look at but not what they want for themselves. Grand Banks ARE their father's Oldsmobile.

So I think GB is being very smart in ditching the old line. They probably should have done it 15 years ago. Whether they are being smart in what they are replacing it with remains to be seen. But the very fact a lot of the Grand Banks devotees don't like what they're doing tells me that they are at least on the right track.

The company I work for is a great example of the huge change that is taking place. We still have a huge force of baby boomers including most of our upper management and program directors. These people are starting to retire and within the next couple of years the exodus of these folks will become a massive flood.

Then we have a rapidly swelling incoming tide of the so-called millenials and folks just slightly older than them.

But there arent many people in the generation in between.

I have been working with a fair number of the new engineers that are comng n from college and grad school and while they are very respectful of the "old guard" it quickly becomes obvious that they cant wait for them to go out the door and take their "conventional" ideas and practices with them.

This is as it should be and it's the only way the company will continue to succeed because the same thing is happening wirh our customers and the company has to not only keep pace with them but stay a few steps ahead of them. And the okd guard simpky can't do this effectively any more. They were what was needed in their day, but the sun is rapidly setting on their day.

So it is with Grand Banks. That era, the Grand Banks era, is over and the sooner the company realizes that and acts on that realization the better, if it's not already too late which it very well may be.
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Old 08-29-2015, 05:33 AM   #7
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Well, first the easy part. Losses for the year US$3.4 million on sales of under $28 million.
Tried looking up the sales figures for Nordhavn, Krogen, American Tug, Nordic Tug. Anyone have access to these numbers?

Did not realize that GB had abandoned the traditional tri-cabin(?) design for what had been called the Europa design. The Europa design was always my preference but the traditional design was popular in the 80s and 90s. Is anyone building that design today.

I remember when GB changed its hull shape (around 2000 or so) away from the semi-displacement. I thought at the time that the hull was a marketing mistake even though everyone seemed to want a faster boat.
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Old 08-29-2015, 07:08 AM   #8
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Quote:
Originally Posted by Marin View Post
Eastbays, at least the ones I've been on, are beautifully made boats.

While it's anyone's guess if Grand Banks (the company has not been American Marine for ages) will succeed, i give them credit for finally abandoning their ancient, 1960s designs and attempting to create (or aquire ready made) products more in tune with today's and tomorrow's markets.......If they're smart they will eliminate the name Grand Banks altogether. Even though we have one, the name Grand Banks is to me like the name Studebaker or De Soto or maybe Packard. Great names and products in their day, but in essence they're old people's machines. That's not an insult nor does it mean in the case of GBs that only 60-pkus year old people buy them.
I think Marin has nailed it here. I think the Clipper series so popular here in Aus, have actually taken a leaf out of that same book, philosophically speaking, as the new series of Clippers, while preserving the essence of the old popular models, are nevertheless totally modern in concept, design and structure. Notably, none of the new models are aft cabin designs, for example, and all are semi-planing, mostly twin engined, and with many of the latest more versatile interior layouts. See here...

Clipper Motor Yachts New and Pre Owned for Sale

Explorer 50 | Clipper Motor Yachts
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Old 08-29-2015, 07:17 AM   #9
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Wow! ''New Coke"

GREAT MARKETING IDEA!
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Old 08-29-2015, 08:52 AM   #10
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I fully understand and agree with Marin's statement. It's painful but that's life.
However B's financial report clearly shows this company is on the ropes and may not get through a transition. Sales of 28M in this world market that produces a 10-15% loss, unless they have a substantial bank account they'll burn all their cash shortly.
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Old 08-29-2015, 08:53 AM   #11
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The time element may be part of what's driving this. Like golf, people don't have, or want to spend as much time on the trip; or 4.5 hrs on the course. That Ausie Clipper looks like a nice boat.
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Old 08-29-2015, 08:58 AM   #12
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I understand thru an industry contact that GB is going in-house with their sales force. They had discussed working with one US broker who has several long time GB sales people. But their instance of sticking with Richards from Palm Beach apparently turned off this broker and they told GB to stuff it. Developing a sales force may prove to be a challenge.
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Old 08-29-2015, 09:24 AM   #13
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I'm 44 And own a 42 Grand Banks sport cruiser - a boat and model I identified and pursued based on asthetic and functionality for the waters we cruise. The 42 classic two down from me in my marina is a family in their mid 40's. I have an old college friend with a 42 classic in Gig Harbor.

I have no data beyond my own experience but I wouldn't necessarily agree the assumptions made in this thread are accurate depictions of my generations preferences.
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Old 08-29-2015, 10:33 AM   #14
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Grand Banks...Tollycraft... Uniflite... Pacemaker... Owens... Trojan - Just to name a few.

As old guard boats vanish, new guard arrives. I'd call that "Materialistic Evolution" at its finest. Alan Greenspan coined a perfectly apropos term "Creative Destruction". And life goes on. Keep on a rollen with the flow!

Our 1977 "old guard" Tollycraft is just fine for us. Main reason... does all we need/desire and is so very affordable. "New guard" stuff usually costs much money$$$$. Old guard stuff is usually penny on the dollar; yet providing nearly the same enjoyment factors as the new!
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Old 08-29-2015, 10:58 AM   #15
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I must say I was saddened to see and hear of the new direction GB was taking after talking with folks at the GB Rendezvous in Roche Harbor. Marin makes very interesting points about change. I really do like the like the lines of our classic GB, but it is most definitely a "classic look". I wonder what the next new classic will appear and make its run into the boating world. There are a number of great boats that came from past architectural and engineering ideas that have been mentioned already and a bunch that will join the list I am sure. Personally, I have not been a fan of the sleek euro styling in most cases, but I cannot afford to consider a new or newish boat anyway so my impact on all of this is pretty much a big zero. My best impact is to encourage other younger people to try boating and see how it changes their look on life. Because, in the end it does not matter what I or anyone else thinks about how a boat looks, that is purely up to the boat owner. Being on the water is the magic of it all.
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Old 08-29-2015, 11:00 AM   #16
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I think the automotive market shows there is value in an old established brand name. And that you can remarket, re-establish yourself as a modern brand without throwing out your heritage.

The names Mercedes, Cadillac, Bentley, etc. stand for time tested quality and have a heritage you can't just create out of thin air.

I believe those companies and others like them would disagree with a strategy of renaming or eliminating the brand name Grand Banks entirely. And they certainly have shown that you can keep your historical heritage while keeping up with the times as far as style and technology are concerned.
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Old 08-29-2015, 11:42 AM   #17
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I think the automotive market shows there is value in an old established brand name. And that you can remarket, re-establish yourself as a modern brand without throwing out your heritage.

The names Mercedes, Cadillac, Bentley, etc. stand for time tested quality and have a heritage you can't just create out of thin air.

I believe those companies and others like them would disagree with a strategy of renaming or eliminating the brand name Grand Banks entirely. And they certainly have shown that you can keep your historical heritage while keeping up with the times as far as style and technology are concerned.
Boatbuilding is nothing like the auto industry. I don't think there is much value in a boat brand name. In autos, it requires a huge investment in design and plant before one car can come off the line, then thousands need to be sold to recoup the investment. For that to happen, branding makes some sense.

In boatbuilding, the market in comparison is miniscule. And get three guys, some tools, a shed, give them a year and a budget and you can build an absolutely world class vessel. Call it any brand you want, if it is a good vessel, it will sell.

Not nearly the economies of scale in the boat world compared to the car world. In fact, I think trying to scale up production in boatbuilding often is a mistake. For that to work, the design needs to be locked in, which removes customization options, discouraging many buyers.

I'm involved with the Carolina boatbuilders and as a group they tend to weather the economic storms. Little debt, they can make a profit building one boat in two years or two boats in one year. And can hibernate when there are no orders. That's when they go fishing!!! Sure, some fail, but really they just move to another shed and name it something else.

Try to run a boatbuilding company like any other corporation, and it will implode. You can sort of predict the demise by when they hire their first MBA. Company will last a few more years past that, then poof.

Someone will buy the Grand Banks tooling and build a boat if anyone wants one. I doubt whatever name is tacked on will add much value.
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Old 08-29-2015, 12:17 PM   #18
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I don't think there is much value in a boat brand name. Someone will buy the Grand Banks tooling and build a boat if anyone wants one. I doubt whatever name is tacked on will add much value.
Can't say I agree with that. A recognised brand name is always worth a premium over xyz. All you have to do is look at establish European brands like Feadship or Lurssen.
People with money will always spend extra for pedigree.
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Old 08-29-2015, 12:23 PM   #19
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As to whether they'll build a 60, they claim to have a sold 60 in build now.

As to in house sales, they've gone a dozen different ways in the past three years. They were actually setting their own operations up in various countries, then backed off and signed dealers, then who knows. They had a Seattle location of their own in addition to NW Explorations but then they closed their location and let Stan Miller have the line in Seattle. Interestingly if you go to their dealer page you see all the red dots throughout the US but no dealers listed.

Perhaps they should have updated their line long ago, but deserting it only became necessary due to their neglect of it for years. They had one of the best and most active groups of owners and turned their backs completely on them. Richards is a Palm Beach guy and in that framework the new 60 design makes sense. Now, Eastbay and Palm Beach definitely target the same audience. One thing they claim is that they were at capacity in Australia so have been busy spending money to start building Palm Beach models in their underutilized Malaysia plant.

When Livingston was still in power, he had a sale of the company basically arranged for considerably more than it's value but the board said no and terminated him. The inner battles continued for quite a while. They spent a couple of years on the Singapore Exchange Watch List, came off last year and I wouldn't be surprised to see them back on this year. I noticed statements released but no Audit opinion yet or Annual Report.

Maybe their strategy is right for them. Drop traditional GB, bring in Palm Beach, build on Palm Beach and Eastbay. A very different boat company than they were. But they still haven't proved they can build that or any boat in their current facilities with their current bloated management at a profit.

They probably should have sold the GB name and molds and kept Eastbay and Palm Beach rather than just watching it die and getting nothing for it.
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Old 08-29-2015, 12:24 PM   #20
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I have no data beyond my own experience but I wouldn't necessarily agree the assumptions made in this thread are accurate depictions of my generations preferences.
With Washington being 14th* in the top 20 markets and having annual sales at less than 175 million, compared to Florida at over 1 billion, followed by Texas and the Great Lake states, I don't think Grand Banks is looking at a group of 40 year olds in Seattle as their savior.

Marin gets it.

*2011 stats.
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