Darren Plymale has been with Galati Yacht Sales since 2004 and currently serves as general manager of its Tampa Bay operation in St. Petersburg, Fla. Galati is a dealer for Viking, Cruisers, Tiara, Marquis and Sea Force IX, with locations in Florida, Alabama and Texas.
Plymale, 44, began his career in the electronics industry, ultimately managing 13 stereo and cellular locations as well as two distributorships throughout central Florida for Southern Auto Sound. In 1992, he transitioned into the marine industry, holding various management roles at the dealer level until 1997. At that time, he moved into the marine lending sector, working with Green Tree Financial Services, KeyBank and later Transamerica Distribution Finance in various sales management capacities.
In January 2004, he joined Galati Yacht Sales as director of business office operations, launching and developing new processes and procedures for closing customer transactions and providing aggressive finance and insurance products. In 2005, he transitioned into location management as general manager of Galati's Tampa Bay operation. In 2006, he was named to the company's board of directors.
Plymale has been married for 22 years, and he and his wife, Emily, have two children - Samantha, a senior in college, and Dylan, a senior in high school. In his free time, Plymale enjoys offshore fishing.
Q: How has your business been faring during the downturn?
A: One of the things that Galati has done is we've looked into our business and started to seek ways that we can cinch up any loose ends. Having gone through a prolonged downturn like our industry has experienced, we began the process a little over a year ago. I think every business today has looked within to determine ways [to] implement quality fundamental business practices, whether its cost-saving measures, quality budgeting, and also looking for areas of your business that you can promote within the market trends.
That's been one of Galati's real strengths. We're family owned and operated, and [we have] an ability to move our market direction with what's selling. We offer a great lineup of premium brand products, and we also manage, as a result of that, a great preowned product, as well as a worldwide brokerage program - one of the premier brokerage programs within our market territory. So wherever the market is at that time is the direction that we're going in order to promote what's happening in the marketplace.
When we saw the business trends continue to change, we started promoting our brokerage side, and that's really helped us sustain through these most difficult times.
Q: What are some of the cost-cutting measures you've taken? Have you had layoffs?
A: We've been very fortunate. We're 100 to 150 employees consistently, and a business of our size sees attrition - people who have to move away because of spouses or family needs or have moved into another business or another industry. So through attrition, we've been able to reduce head count considerably by taking those positions and spreading them back into others within the company. So that has been a strategy that we've implemented that has allowed us to get our head count where it needs to be. We currently have about 132 employees. A year ago we managed 170.
There are several things that Galati has done to reduce that. No. 1, like everybody, we looked into some of our satellite locations and did it make sense for those satellite locations to exist when we could cover those markets with our primary stores - our full- service stores - and have a greater reach. The answer was yes. So as those leases in those stores expired, we simply did not renew them. What happened was the folks that could not relocate, those jobs were eliminated through the reduction in locations.
It was simple, going back through, looking at fundamental business practices and determining whether we could still serve those markets in the same way that we had. We currently have eight locations, between our full-service facilities and our satellite facilities, and we were at 11 locations at this time last year.
I think every business has been affected through this current economic downturn. But what we have seen is our ability to cultivate what business is there and continue maximizing market share. That hasn't been affected. When you take a look at business today, it's not so much how much you've been affected percentage-wise; you need to take a look at how you're faring as far as market share. There's only so much business out there. Am I improving my position today versus the same time last year? The answer is, emphatically, yes.
Is there a segment that's better than the other? The brokerage segment has improved this year over last year in unit volume. So we've done more brokerage transactions than we ever have in the history of the company. In addition to that, that's been fueled by this bank-owned product that we've produced in an effort to support our lender partners with the ability to sell through their product.
With the amount of consumer delinquency and dealer failures that are occurring in the market today, Galati Yacht Sales last year developed a bank-owned program that was targeted to allow the banks to come in, and we support their needs to resell the products. It's actually something that's worked well for us.
We specialize in 30-foot-and-over, inboard diesel product. So we've got a strategy of going to the bank and seeking those products - regardless of brand - that we can help them support sell-through, through our brokerage program, and it's worked out fantastic for us.
Q: How is your business doing in terms of financing, from both the wholesale and retail sides?
A: When you take a look at the approval guidelines a year ago versus the approval guidelines today, they've changed. Has it impaired our ability to fund transactions at the retail level versus the same time last year? Yes. Has it created our need to communicate more of what the expectations of the bank are today? Yes. And I think the consumer's mindset has changed because of other challenges within their life, and because of the amount of press that's out there with some of these banking situations. [They know] it's going to be a little bit more difficult and it may be a little more challenging to go out and obtain a recreation loan in order to purchase a product of the size that we sell.
We have a great business office model that we've been able to put in place. We have a wonderful team that talks to those customers on a regular basis and then sets expectations and creates a great understanding for the customer of what it's going to take [to get a loan]. And we go out and match that customer's needs with the lenders we believe are the best opportunity to gain an approval. And that's really been the key for us.
We have a tendency to enjoy a customer that's very affluent and on the higher scale. The inboard diesel product that's 30 feet and above - a lot of times our average sale ranges from $250,000 to $1 million. So we have a very affluent buyer that we cater to. Our key, in order to gain an approval, is not necessarily from the bank, but to obtain a loan that meets the customer's requirements.
[On the wholesale side], let's face it. With a few larger lending partners exiting our industry, they left some holes for us. They put a lot of strain on the remaining lenders, but I would have to commend both GE and Bank of America and the others that have been able to weather this storm, with some of the other variables that have impacted their business.
The interest rates have increased since this time last year. A lot of that is the bad debt the banks are absorbing now with dealer failures and some of the delinquency that's occurring out there right now. And the other is the exposures that the banks have dealt with through curtailments. When you take those factors into consideration, they have to mitigate that exposure and they have to increase their rates to offset it. It's no different than our business.
Unfortunately, margin suppression is one of the biggest things that we are confronted with today, so we have to look into our business and find other ways to offset that. And the banks have to as well. The only thing that they can do is increase rates or fees.
Q: What percentage of your business is new boats versus brokerage versus boats sold through your bank-owned program? Do you see any changes to this on the horizon?
A: When you take a look at it as a whole, in years past about 70 percent of our business has been new boats and 30 percent has been brokerage. That's changed. It's about 50-50 right now. And right now about half of that brokerage business has been bank-owned business.
Unfortunately, [our bank partners] are not very favorable as to forecasting for the next six months. They're looking at an increase in delinquency and, therefore, we're looking for that business to continue to increase.
Our Galati bank-owned program provides the customer with a very holistic experience. They have the ability to come in and purchase a quality product at a very fair price, obtain a loan that meets their personal requirements, obtain any type of insurance they may require ... as well as any type of extending type of service policies as well. In addition to that, we have a very comprehensive customer support program that takes care of that customer and their purchase long after the sale. It's very important to us that we maintain the ability to service that customer's needs and ensure that their experience on the water is the best that it can possibly be. Therefore, we put a tremendous amount of focus on that experience after [the] sale, as much as we do presale. And we service everything we do sell, whether it's new, used or brokerage.
Q: Is there concern that new product is not going out the door as quickly as you might like?
A: Unfortunately, right now the market is more focused on the values, and what happens is the consumer sees more value in a preowned boat than they do in a new boat. And when you have the opportunity to sell a new boat, you're not able to make the margins that you need to make because of some of the liquidations that are happening out there right now with the dealer failures.
By design, we've looked to push that [preowned] end of the market. Galati Yacht Sales is in a unique position in the fact that we enjoy servicing both sides of that equation, selling that new product and selling that preowned product, and so we've been able to decrease our exposure to our floorplan companies and increase our presence at retail throughout the brokerage program. It's a nice balance.
Q: What are your plans for the upcoming fall and winter boat show seasons?
A: We did 20 boat shows last year, and we're going to do 17 this year. They mean a lot to our company and a lot to our Galati brand, and you will see us out there at all the major regional and local and international events that we've attended in the past. We have made the decision to cut back on just a select few we've attended in the past where we didn't see the results we would have liked, but we are forecasted to be at 17 events this year. The ones that we chose not to attend were more of the smaller, local events that we decided we weren't able to support.
Because the customers are using the boat shows as more of a fact-finding mission in our product segment and then going home and making purchase decisions, it's been hard for us to judge whether or not the boat shows are providing the same results as they have in past years. But ... our boats shows are so important to us because you can't risk not getting in front of that client, and for us to reach our goals with our core brand partners we have to make sure we are leading the way out there and providing a great example of what we have to offer.
Q: You've been ranked the No. 1 dealer in the country for the past two years. To what do you attribute this?
A: Our team. We have a tremendous group of individuals who really give us everything they have every day to make our customers feel as special as they can. Our on-water experience for our customer is the highest of our priorities and, therefore, our team's mission every day - whether you're on the customer-support side, the sales side, you name it, whatever portion of our business is directed at the customer's experience - we put such a focus on that.
Also, our passion for this industry. Being family-owned, we're reaching our 40th anniversary in 2010, and we are in the second generation and third generation of ownership. It's really been a wonderful experience for our employees because they really feel like they're part of what we do every day, and they know the importance of their role. And that truly has been the key component to reaching and achieving that No. 1 status.
Q: How important is it to be able to say you have achieved this goal?
A: In today's market, I think it's extremely important. We've looked at the Top 100 achievement the past two years as something that we covet because how many dealers can say that they are No. 1 in North America? I really hope that's something we are able to retain. We worked very hard to submit the best application that we could possibly submit. And, again, that passion to do a job right the first time and provide the right story and talk about all the things that we've done this past year in order to retain that title, we're looking at that as the opportunity to continue to earn it once again.
Q: What kinds of things do you do to stand out from the competition?
A: No. 1, the reason we stick out in a crowd is our boat show and our promotional presence. Our team does such a wonderful job to go out there and give us such a great presentation. The dedication that they put in to make sure that every boat is just perfect and to make sure that every display is set up the best that it can be - we earn a lot of 'best in show,' if you will, displays that are a reflection of our team's passion. We do stick out amongst a crowd.
The other is that we love to get out and recreate with our customers. We host regular rendezvous. Last year we hosted 15 rendezvous. This year we're going to deliver 14 rendezvous, but [also] two trips to Key West. Getting out and recreating with our customers is so important for those that like to cruise.
In our fishing segment, Galati Yacht Sales will be participating nationally and internationally in over 20 tournaments, and we'll be out there recreating with our customers whether or not we're fishing with them, or going out and entering our Team Galati boat in an international tournament that we might be fishing against another brand. That's been a saving grace for us, even in these most difficult times, because the customers that really are boaters are going to boat.
Q: How important is the service side of your business?
A: A lot of people don't know this, but our business was founded on service. Galati Yacht Sales started as Galati Marine. We had a single focus on providing a customer-service product; we didn't sell boats in the beginning. So it was marina facility, a repair facility and a provisions facility.
I always say we are a service business first and a sales business second, and we are a service organization that happens to sell boats. Very fortunate for us, it's been a very successful formula.
Q: What do you see as the future of the industry?
A: I think we have to take a look at how things settle over the next year. I think we have yet to see the face of our industry - who the players are going to be and how the new model will evolve. One of the things I think will happen is that it's going to strengthen those brand partners that we have and that many dealers enjoy, and it's going to give our dealer base and our manufacturing base the ability to come closer together and provide our customer with a more preferred product.
With the discretionary income out there today, we're no longer competing against each other; we're competing against other industries. It's up to us to provide the best possible product that we can between the dealer, the manufacturer and even the lender so that we can continue to provide a preferred product for the consumer.
And that model, however it evolves, I don't think we can predict what it's going to look like. But I can tell you that Galati Yacht Sales looks to be here long into the future. We've been here 40 years; we want to be here for another 140 years.
This article originally appeared in the October 2009 issue.