Wealthy clients and brand reputation propel CYI to a banner first year
To say Steve Fithian has the Midas touch isn’t much of an exaggeration. Instead of hunkering down in these difficult economic times, he’s hiring new sales staff. He added a third office and will soon open a fourth, and he moved his company headquarters to fancier digs.
Fithian doesn’t have a secret recipe for success. His ability to prosper in a tough economy stems from the nature of his customers and the product he sells; both are somewhat
Fithian is president of Classic Yachts International, a dealership for Grand Banks Yachts based in Dania Beach, Fla., near Fort Lauderdale. The company was formed in October 2007 after Fort Lauderdale-based Hal Jones & Co., the previous dealer for Grand Banks on Florida’s east coast, closed its doors when the owner retired. Fithian had worked there for 14 years, closing out his tenure as vice president of sales. In 2003, 2005 and 2006, he was the top Grand Banks sales producer worldwide.
“I was selling about 80 percent of the new Grand Banks boats at Hal Jones,” Fithian says. “When Hal retired, Grand Banks approached me to see if I wanted to take over.”
Off and running
Fithian saw a chance to build on the core market Hal Jones & Co. had established. It made perfect sense to form a new company, he says, even when the economic downturn was starting to deepen late last year. In less than a month, Fithian, 51, and his partner, George Potochney, 51, had the operation up and running, with a foundation of sales and support staff from Hal Jones as well as new hires, bringing the total number of employees to 12.
Fithian opened a main office at Lauderdale Marina in Fort Lauderdale before relocating his headquarters to Harbour Towne Marina in Dania Beach last month. He also opened a second office in Fort Pierce.
“It was a scramble to get everything done so quickly,” he says, “but we didn’t have time to waste.”
In an 11-month period ending in September, Classic Yachts International sold eight new Grand Banks yachts and 22 brokerage boats. It currently has a new-boat Grand Banks inventory valued at approximately $6 million.
According to David Hensel, director of brand and marketing for Seattle-based Grand Banks Yachts, Grand Banks sold 74 units that generated revenue of approximately $79 million in fiscal 2008, which ended March 31. That was a company record. Fiscal 2007 sales amounted to 70 units and revenue of about $78 million. Classic Yachts International’s sale of eight units in 11 months is the equivalent of roughly 11 percent of worldwide sales for Grand Banks in fiscal 2008.
Eye toward the future
“Steve sees this time as an opportunity to grow the business,” says Hensel. “You take a hard time and make the best of it, and when the economy turns up, he’ll be positioned to take advantage of it. We’re seeing some of our other dealers doing the same thing.”
In July, Grand Banks appointed Classic Yachts International its dealer for the western coast of Florida, as well. Fithian opened a third office in Cape Coral in September, and he will open a fourth in the Tampa-St. Petersburg area in the first quarter of 2009. Each office will have two sales staff.
“This is really just a starting point,” says Fithian.
Fithian is reaping rewards, in part, because of customer loyalty to the Grand Banks product range.
“Repeat customers in the same brand are a major reason behind the success of Grand Banks, and my success with the brands over time. It’s slower now because of what’s happening in the markets, but there are enough people who have planned on buying this product for years, or who are just so attracted to this product that they’ll buy it anyway, even in a down economy,” Fithian says. “That’s why we’re expanding and building for future growth.”
Anecdotal evidence suggests 60 to 70 percent of new-boat Grand Banks buyers are previous Grand Banks owners, Hensel says. He also says, based on the rule of thumb that a buyer will spend about 10 percent of his or her net worth on a boat, the average net worth of a Grand Banks buyer is $10 million and up. Grand Banks brands — Eastbay, Heritage and Aleutian — range in base price from $600,000 to nearly $3.5 million; boat length runs from 39 to 72 feet.
Customer loyalty, quality product, sustained resale value, and a reputation dating back to its founding in 1956 tell only part of the story behind the success of Grand Banks and many of its dealers. Customers are buying because the boat fits in with their life plans, a lifestyle choice that encompasses cruising in comfort and safety.
“I think these people are conservative to the point where they manage their money carefully,” says Bill Parlatore, founding editor-at-large of PassageMaker Magazine, the Annapolis, Md.-based sister publication to Soundings Trade Only. “The decision to buy isn’t done on a whim. It’s a lifestyle choice. It’s part of a master plan the husband and wife have chosen, and they’re willing to make a large investment in a boat.”
In the past, the typical buyer of a Grand Banks (and of trawlers in general) was an ex-sailor, but that’s changing. “A larger percentage of owners are closing in on retirement, and they’re buying their first boat. They might buy a condo in Aspen one year, a jet the next year, and a Grand Banks the year after that. They’re luxury connoisseurs,” says Hensel.
A $700,000 starter boat
At October’s United States Powerboat Show in Annapolis, Grand Banks introduced its 41 Heritage EU, the company’s first boat equipped with Cummins MerCruiser Diesel’s Zeus pod drives. As much as 30 percent more fuel-efficient, lighter, and more compact than traditional propulsion systems, pod drives also greatly improve maneuverability with joystick controls, something new-boat buyers without a great deal of experience are looking for, Hensel says.
“We wanted the boat to be attractive to people who may not feel comfortable docking a boat,” says Hensel. “These customers want to feel comfortable behind the wheel, and the pod drives make this possible.”
Grand Banks is positioning the 41EU as an entry-level boat. Its base price is about $700,000.
“The high quality of the build, the touch of class that Grand Banks has always had with all its models, and the fact that the designs continue to evolve is another big reason for the continued success,” Fithian says.
This article originally appeared in the December 2008 issue.