Thirteen years after acquiring Chris-Craft, the partners of private-equity firm, Stellican, remain at the helm of America’s best-known boat brand. After breathing new life into the icon, they’re planning for substantial growth in the years ahead.
When Steve Heese and Stephen Julius emerged with the assets Chris-Craft shortly after the OMC bankruptcy in 2000, many industry observers wondered if they would be able to bring the ailing brand back to life. If so, the next question was how long they’d hold on before selling.
Julius had owned the Italian brand Riva for three years, turned it around, and sold it to the Ferretti Group in 1999. The business model at his London-based private equity firm, Stellican Ltd, was to find a failing, classic brand, reinvent it for the modern consumer, and exit with a handsome return.
Heese and Julius struggled for the first two years to not only bring Chris-Craft back to life but give the iconic brand a fresh fleet of boats and new direction after 12 years of mismanagement by OMC. By the third year, Chris-Craft was turning a profit again and had solidified its dealer base. The partners had lifted the brand from the graveyard of me-too builders into the low-volume, but much more profitable luxury boat segment.
Other big choice – to sell and reap the rewards of a successful turnaround, or roll the dice and hang in for the long term. “In 2005, we were getting all sorts of offers for the company,” says Heese. “We were going at full tilt – we were manufacturing 650 units, and just couldn’t get any more boats out of the Sarasota plant.”
The business partners had bought the assets of Indian Motorcycle in 2004, and had moved the company from California to North Carolina. By 2006, they were looking at a second plant for Chris-Craft near the Indian factory to manufacture its new line of Catalina center consoles.
At the end of the search, the business partners were sitting in the parking lot of the manufacturing facility they’d put under contract. It wouldn’t be too late to pull out, Heese thought. They both had their hands full with the Indian turnaround. Heese turned to Julius and said: “We’re going to see a cycle pretty soon. This could be the last chance we’ll have to sell for another four or five years.”
Note: The above is an excerpt of the interview published on the December 2012/January 2013 issue of IBI magazine. IBI Plus subscribers can read the full article. If you’re not yet a subscriber, please sign up!