With bankruptcy behind it and Jacobs again the owner, Larson Boats eagerly enters its second century
Larson Boats has been in the same business for 100 years, and Al Kuebelbeck knows that’s exceptional. As the company celebrates its centennial, Kuebelbeck reflects on the challenges of recent years, from a bankruptcy restructuring to the Great Recession, and he’s looking ahead to what he believes will be some of Larson’s most exciting times.
“We went through a lot,” says Kuebelbeck, the company’s president and CEO. “If you look at the different recessions we’ve had, Larson’s always been able to weather the storm.”
That proved difficult during the Great Recession. “The past three years have probably been the toughest three years that I’ve participated in this business,” he says, noting that some of Larson’s boatbuilder competitors failed. “That affords us the opportunity to gain some market share because we’re still alive and still here. We landed in bankruptcy in 2009, and we worked our way through, and we’ve repositioned ourselves in the market. We didn’t sit on our laurels. We worked hard on developing new product that we feel is apropos for the market we’re dealing with and the generation we’re dealing with.”
Larson is the umbrella company for the Larson, Triumph and Seaswirl Striper brands. All of the operations were consolidated in Little Falls, Minn., after the 2009 restructuring.
The process has not been without difficulty. Genmar Holdings Inc. CEO Irwin Jacobs filed for bankruptcy protection for all 15 of Genmar’s companies in June 2009. The case was later converted to a Chapter 7 liquidation, and the assets were auctioned. Platinum Equity, a private equity investment firm, purchased the Larson, Triumph and Seaswirl brands from Genmar and sold them to Jacobs’ new company, J&D Acquisitions. Some vendors and dealers alleged that Jacobs left them holding the bag for unpaid warranty claims and work already completed.
Last January, Charles Ries, the bankruptcy trustee for Genmar Holdings, filed dozens of “clawback” lawsuits seeking millions of dollars paid to alleged insiders and Genmar subsidiaries before the company’s 2009 bankruptcy filing, asking Jacobs to return $2.7 million. In February, Jacobs countersued Ries, accusing him of publishing false statements about Jacobs’ prior business dealings. Both lawsuits remain open.
Most of the 43 years that Kuebelbeck has spent in the marine industry have been with Larson — 38 of them with Jacobs — and he defends Jacobs against those who criticize him. “Working with him is very rewarding,” Kuebelbeck says. “I fully understand there are a lot of negatives out there, [but] most of the negatives out there — there isn’t much substance to it.”
Jacobs got into the marine industry in the 1970s when he purchased Larson because he believed so strongly in the brand, Kuebelbeck says. “Frankly, without him having that strong feeling in Larson, I don’t think Larson would be having its 100th anniversary this year,” Kuebelbeck says. “We’re completely restructured, and coming out of the bankruptcy Irwin could’ve walked away, but he had such dedication to the company — he stuck with us. We’re building the brands back up, and I’m excited with what we’ve got coming down the line and anxious to see how it’s received.
“We’ve been very busy,” Kuebelbeck adds. “We’ve been working very hard to develop new product.”
It’s important to give people a reason to spend money on new boats, and innovative products are the key, he says. “In this last three years, the whole buying structure has changed,” Kuebelbeck says. “We rely really heavily on the entry-level boat buyer, and he’s been noticeably absent in the market these days.”
Kuebelbeck thinks pent-up demand, combined with new products, will help spark sales. “New product is what gets the younger generation to buy,” he says. “This Y Generation is unlike any we’ve seen. The electronics and all that’s coming out — our new generation lives and breathes it. Our products need to have the things that are going to keep them interested.”
The company has a strong bond with the Little Falls community after so many years there, Kuebelbeck says. “In any company, you can be sophisticated and have all the technology in the world, but if you don’t have good people, you don’t have a company,” he says. “We’ve got loyalty. There are people who have been working with us 18 and 20 years. That’s what makes my job a lot easier. They are 150 percent behind this company. And Irwin is also. I feel so strongly about what’s going on now and appreciate the opportunity to get the message out there a little more truthfully.”
After staying out of the public glare for the past few years, now is the time for Larson to get the word out to boat buyers so they understand where the company stands, Kuebelbeck says. Larson launched 11 new models at its dealer meeting in late August, including a revival of the All-American, the iconic boat Larson built from the 1950s to the 1990s. Dealers responded well to the new products, says executive vice president Mike O’Connell.
“We’re always trying to hit this market niche of super-high value and low cost,” O’Connell says. “One of the seamstresses in the audience had been with us 47 years, and we’d said, ‘What about if instead of the most efficient stitch line you did the most beautiful stitch line, even if it cost a little bit more?’ Or what about if we built the most beautiful, elegant hull instead of the most efficient hull, even if it costs a few more bucks? How can we build a boat that shows off what Larson is really about?”
Orders have come in at or above planned projection, and the company planned for a “pretty significant increase” in orders, O’Connell says.
The All-American is how Larson made its name in years past, Kuebelbeck says. “We’re resurrecting the old and combining it with the new,” he says. “It’s pretty cool, and I think it’s the start of the next hundred years. I think we’re going to show the world that we meant what we said. We’re going to come out with the interest of our buyers at heart.”
This article originally appeared in the October 2012 issue.