Brunswick responds to MarineMax move - Trade Only Today

Brunswick responds to MarineMax move

Sea Ray will not be negatively affected by MarineMax's decision to bring on Polish yacht builder Galeon, Brunswick said.
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The strong dollar, which means European manufacturers can potentially gain a price advantage by importing boats to the U.S. market, will not affect Sea Ray or deter the consumers who want the brand’s boats.

Specifically, Sea Ray will not be negatively affected by MarineMax's decision to bring on Polish yacht builder Galeon, Brunswick Corp. executives told investors and analysts on Thursday.

"These are the 1 percent buying this product and they're not shopping for, 'Oh, can I save $10,000?' " COO Mark Schwabero said during a call discussing fourth-quarter and 2015 earnings. “This is someone who is really looking for image, prestige. They want to be able to go back and tell somebody, "I just bought the brand-new L590 Sea Ray."

"Galeon is, I'd say, just a relatively small manufacturer over in Europe," Schwabero added. "[MarineMax CEO] Bill McGill and the MarineMax organization feels this can be a complementary product. They are bringing it in a very finite range. Net, net, I don't think you are going to see any huge impact on us in the marketplace."

In making the announcement to bring Galeon on board, MarineMax said the company "was determined to find a brand that could successfully compete with the more affordable pleasure yachts that recently began being imported in the market."

Last week, the brand beat out the Sea Ray L590 Fly, among other heavyweights, for European powerboat of the year in the over 45-foot category with its 500 Fly at the Düsseldorf Boat Show.

Brunswick CEO Dustan E. McCoy fielded a few questions at the outset, but largely Schwabero responded to analyst questions. McCoy said this was his final earnings call, as he is set to retire sometime early this year. McCoy did say he will be at the Miami International Boat Show and at Yachts Miami Beach, which are being held Feb. 11-15.

McCoy also said the Canadian market had been down about 10 percent because of the fluctuating Canadian dollar.

"In 2016 we expect the Canadian boat market to be down, almost as significantly as in 2015," McCoy said, adding that Brunswick expects its marine sales to outperform the market and gain market share.

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