Public Company Incorporated: 1998
Sales: $291.2 million (1998)
Stock Exchanges: New York
Ticker Symbol: HZO
NAIC: 441222 Boat Dealers
MarineMax, Inc. is the largest recreational boat retailer in the United States, and the leading seller of Sea Ray, Boston Whaler, and other boats made by Brunswick Corporation, which makes up nearly 90 percent of the company’s new boat sales and 75 percent of used boat sales, as well as brand names such as Hatteras and Supra ski boats. A conglomeration of major boat dealers, with 47 retail locations throughout the United States, MarineMax sells new and used pleasure and recreational boats, fishing boats, and high-performance boats, as well as related marine products, including engines, boats, trailers, parts, and accessories. The Clearwater, Florida-based company also arranges boat financing, insurance, and extended warranty contracts, provides boat repair and maintenance services, and offers boat brokerage services.
The Bassett Boat Company of Florida: 1944–98
Richard Bassett’s family started out in the boat selling industry in Springfield, Massachusetts, back in 1944, and made a decent living selling boats in that small marketplace. More than three decades later, in 1979, the company expanded into Miami and Boca Raton, Florida. In 1991 the company moved its Boca Raton operations and staff. The new multimillion-dollar corporate headquarters, located in Pompano Beach on the water, contained 16 slips for boats. The Boca Raton facility was retained and used for other purposes. In 1992, Bassett reported total revenues of $45 million.
In 1993 Bassett Boat Company—already one of the largest boat retailers in the United States, with facilities in Springfield and Ludlow, Massachusetts; Wakefield, Rhode Island; and Miami, North Palm Beach, and Pompano Beach, Florida, all handling Sea Ray boats exclusively—began expanding rapidly. That year, when Bill Gardella, Sr., owner of The Rex Marine Center in South Norwalk, Connecticut, closed the doors on his Formula and Regal dealership, Bassett Boat Company leased the then vacant 8,000-foot showroom, relocating its wares from the company’s location in Stamford. The move placed Bassett in a major marina located in Connecticut’s wealthiest area, along with other boat companies such as The Small Boat Shop, Atlantech Marine Electronics, New England Fiberglass Repairs, Inflatable Boats, Wizard Marine, and Windward Passage Yacht Sales. Additionally in 1993, the company purchased the assets of Boatland of Florida. Boatland, owned by Ed Taggart, brought Bassett two new Sea Ray locations in Stuart and Melbourne, Florida.
In 1994 Richard Bassett stepped down from his position as president in the company his family founded nearly 50 years earlier. He hired Clint Moore, formerly the head of Little Falls, Minnesota-based Larson Boat Co., a division of Genmar Holdings. Previously, Moore had worked for 15 years with the Mercury Marine Division of Brunswick Corporation, then spent two years with Glastron before moving to Larson. While at Larson, Moore increased sales some 25 percent from 1993 to 1994. Moore moved on from Bassett before the inception of MarineMax.
Gulfwind Marine USA: 1967–98
Gulf wind, also known as Outboarder of Sarasota Inc., founded in 1967, meanwhile, was also a major boat dealership and one of the top Sea Ray distributors in its own right. In 1991 the company spent four days in a unique marketing campaign with Sea Ray Boats, offering to pay the new ten percent luxury tax the U.S. government instituted on items worth more than $100,000, if customers would buy their boats. It worked. The company sold $1.26 million worth of yachts during that period at its three locations in Clearwater, Fort Myers, and Sarasota, Florida. The company, run by president William H. McGill, Jr., reported total sales in 1992 of $20 million.
Putting Heads Together: The Inception of MarineMax, 1998
By 1998, Bassett and Gulfwind were unquestionably the largest dealerships for Sea Ray boats in the United States. But something was missing. By this time, the power boat industry in the U.S. was a $19 billion market, but it was an industry in pain. Sales were down 27 percent from the peak of 1988, when some 790,000 boats were sold. With over 4,000 independent boat dealerships located throughout the United States, and with factors beyond their control, such as economic slowdowns or slumps which affected consumer spending on big-ticket luxury items, something needed to be done to solidify sales and to find a way to free up capital to expand into new types of marketing. In a June 1998 article by Dale DuPont in Knight-Ridder/Tribune Business News, Frank Herhold, executive director of The Marine Industries Association of South Florida, said, “I’ve thought for some time we need to learn from our friends in the automobile industry. We have to re-engineer the way we go to market.”
In an April 1999 article by Scott McCormack in Forbes, McGill said, “They say that every boat owner has two great days: the day he bought the boat and the day he sold it. We have to change that or this industry is dead.” But how to change it?
Bassett thought he had the answer, so he approached longtime friend McGill and the two began to talk about the industry. Soon, they brought in Louis Del Homme Marine in Texas, Harrison’s of California and Arizona, and Stovall Marine of Georgia. The result was MarineMax, Inc., a conglomeration of the different companies, forged into a pooling of interests. Founded in January 1998, the combined company could share finances, databases, customers, facilities, and more.
With McGill as chairman of the board, president, and chief executive officer; Bassett as a director and senior vice-president; and Graham Stovall among the directors, MarineMax, Inc. was off and running, the largest recreational boat retailer in the United States, if not the world. The creation of MarineMax was reminiscent of CarMax Inc., the Glen Allen, Virginia-based used car dealership division of Circuit City Stores Inc., which turned total revenues of $66.3 million in 1997, and AutoNation Inc., which brought in a whopping $13.92 billion in fiscal 1998. Thus, the potential for explosive growth had already been proven by the automobile concerns.
Other changes MarineMax made in traditional boat selling, according to McCormack, included combining “high, no-haggle sticker prices with luxury service.” The higher price charged by MarineMax dealerships reflected an additional 2.5 to 6 percent of the sticker price of the boat to cover the service contract. While that might mean paying more than at another dealership, it included many perks. Why? “At most of the 4,000 dealers scattered along America’s waterways... service is abysmal,” said McGill in the Forbes article. “If you break down at sea, well, that’s the Coast Guard’s problem.”
McCormack went on to detail some of the benefits of buying from MarineMax: “If you can’t pilot the thing, MarineMax will throw in a free captain for the maiden voyage. He’ll keep coming back until you learn how to use the boat... Your boat won’t start at 8 a.m. one Sunday morning with the whole family on board? You can page a company technician on call 24 hours a day. If you live in the area, he’ll come out to fix the problem. Otherwise, MarineMax arranges for another marina to provide assistance.” McCormack also pointed out that MarineMax offered two-year, stem to stern guarantees for all boats over 20 feet, covering maintenance and service costs. In addition, he said, “You won’t get charged for small service items like a dead battery or broken canvas snaps.”
Going Public: 1998
Following the lead of their car dealership cousins, boat dealerships began going public in order to gain the necessary capital to expand beyond their current market restrictions. The first boat dealership to do so was Travis Boats & Motors of Austin, Texas, a company which was founded in 1979. Travis began buying independent dealers, as well as building new stores, with 21 superstores ranging across the Gulf Coast by 1998. In 1997, Travis posted total revenues of $91.3 million, with a net income of $4 million. Travis went public in June 1996, with an opening price of $9 per share.
Our mantra is “Delivering the Dream.” MarineMax is more than a company selling boats; we are delivering the pleasures of a boating lifestyle. We do this through the many value-added services that come with being a MarineMax customer. For example, we provide you with a thorough in-water orientation of boat operation as well as ongoing boat safety, maintenance, seminars, and demonstrations for the entire family. Our service extends well after the sale, too, by organizing Getaways! —group boating trips to various destinations, rendezvous gatherings, and on-the-water events for you to enjoy your boat.
MarineMax, Inc. was the second boat dealership to go public, doing so in June 1998, opening at $12.50 per share, and raising $59.8 million during the initial public offering. The company’s ticker symbol, HZO, was a play on H2O, for water. MarineMax began acquisitions with the proceeds of its IPO. Notable among the purchases were: Merit Marine of New Jersey; Boating World in Texas; Suburban Boatworks of Warrington, Pennsylvania; Jacksonville, Florida-based Hansen Yacht Sales, Inc., a yacht brokerage operation; Treasure Cove in Ohio for $7.7 million; Cochran’s Marine of Minnesota; Skipper Bud’s of North Carolina; and Fort Lauderdale-based Woods and Oviatt, Inc., a very well-known brokerage firm in the boating industry. In 1998, the conglomeration reported total revenues of $291.2 million, a 71.6 percent increase over 1997 revenues of all the separate companies combined.
In January 1999, Edward Russell, who started his career as a retail salesman for Gulfwind Marine USA, was promoted from director of sales to president of that company, as well as regional manager for MarineMax. In September of that year, the company opened a new retail facility on the Cuyahoga River near Cleveland, Ohio, described by a company insider as “a critical facility in that region of the country,” allowing the company another building block in a north/south corridor stretching from Florida to Maine, and giving customers the ability to buy a boat in Florida and have it serviced in Ohio later in the year.
The company also created “MarineMax University,” a program which according to the company “regularly invites just spouses and kids [of boat owners] to the marina to learn how to handle their family boats—everything from docking to programming the navigation system—and to get a look at other, larger, models.” The company also sponsored a variety of “getaways” to its customers, “from one-day outings on a Minnesota lake to two-week trips to the Bahamas. Customers cover the costs; the company handles the details, services the boats before leaving and sends along a team of technicians and salespeople.”
Thus, as the 21st century approached, the new conglomerate was poised at the top of the food chain in its industry, ready and willing to snap up smaller fish and grow the business exponentially.
MarineMax Boat Company of Florida; MarineMax Cochrans; MarineMax Del Homme; MarineMax Gulfwind South; MarineMax Gulfwind USA; MarineMax Harrison’s; MarineMax Merit Marine; MarineMax North Carolina; MarineMax Stovall; MarineMax Suburban; MarineMax Treasure Cove; Woods and Oviatt, Inc.
“The Bassett Boat Company of Florida,” South Florida Business Journal, June 3, 1991, p. 35.
“Boat Dealers Follow Auto Industry’s Superstore Strategy,” Knight-Ridder/Tribune Business News, May 31, 1998, p. OKRB98151065.
DuPont, Dale K., “Clearwater, Fla.-Based Recreational Boat Dealer Raises $59.8 Million in IPO,” Knight-Ridder/Tribune Business News, June 3, 1998, p. OKRB98154070.
_____, “28-Store Boat Dealer MarineMax Goes Public, Hopes to Raise $77 Million,” Knight-Ridder/Tribune Business News, June 17, 1998, p. OKRB98168332.
“Ed Russell,” Boating Industry, January 1999, p. 16.
Farrell, Michael, “Dealership Consolidator Sets Public Offering,” Boating Industry, June 1998, p. 8.
_____, “MarineMax Offering Falls Short of Expectations,” Boating Industry, July 1998, p. 8.
Henschen, Doug, “Bassett Boats Expands in Two Major Markets,” Boating Industry, May 1993, p. 16.
Johnson, Joan, and Chris Ells, “Boat Dealers: Ranked by Number of Boats Sold in 1995,” Tampa Bay Business Journal, June 7, 1996, p. 17.
Kurowski, Jeff, “Larson President Joins Dealership,” Boating Industry, November 1994, p. 10.
_____, “MarineMax Acquires Boating World,” Boating Industry, April 1999, p. 14.
_____, “MarineMax Buys Cove Marina,” Boating Industry, January 1999, p. 9.
_____, “MarineMax Buys More Shops, Adds Hattaras Line,” Boating Industry, November 1998, p. 10.
“MarineMax Initiates Stock Coupon Program—Coupon Program Will Utilize Existing Publicly Traded Common Stock,” Business Wire, September 13, 1999.
“MarineMax Opens New Cleveland Location,” Business Wire, September 15, 1999. “MarineMax Strengthens Florida Presence and Expands Brokerage Operations,” Business Wire, September 9, 1999.
“MarineMax Reports Record Third Quarter; Revenues Increase 54%; Earnings Rise 42%,” Business Wire, July 22, 1999, p. NA.
McConnell, Jackie, “Boat Dealers,” Tampa Bay Business Journal, June 20, 1997, p. 23.
_____, “Boat Dealers,” Tampa Bay Business Journal, March 6, 1998, p. 15.
McCormack, Scott, “Making Waves,” Forbes, April 5, 1999, p. 76.
“RCG Capital Markets Group to Provide Forum for 16 Undervalued Small-Cap Companies,” PR Newswire, September 14, 1999.
Spears, Stephen, “Gulfwind Blows off Luxury Tax,” Tampa Bay Business Journal, May 3, 1991, p. 1.
“The Sun News, Myrtle Beach, S.C., Business Briefs Column,” Knight-Ridder/Tribune Business News, February 12, 1999, p. OKRB990430F5.
—Daryl F. Mallett