The launch of the Hatteras GT65 Carolina last week at the Miami Yacht Show coincided with the its new CEO’s first major boat show. As Gary Smith admits, he’s “not a boat guy,” and while he has only been in the job for 38 days, he says he’s “learning a ton.”
Smith spent his early career years as a turnaround specialist for McKinsey and Co., working on troubled businesses. He then applied those skills on behalf of Versa Capital Management, a private equity firm that specializes in rescuing corporate entities across different industries out of bankruptcy. Versa acquired Hatteras in 2013.
Smith led the revival of Timberland, the outdoor clothing and boot manufacturer, after it fell on hard times in the early 2000s. Then Smith moved to Polartec, which was started in 1905 by Malden Mills and went on to invent synthetic fleece that became the outdoor industry standard in the 1990s. That, too, fell on hard times during the recession.
“There’s often deep structural issues behind how the company got into trouble,” Smith said. “It took six-and-a-half years to take Polartec from bankruptcy to being a self-sustaining and investment-grade company.” The company was sold for an undisclosed amount to Milliken Mills, one of the textile industry’s largest corporations.
Smith, who has closely studied the early years of Hatteras, plans to reclaim its original brand DNA as part of its growth strategy. “I don’t plan to design the next Hatteras in my own image, and I don’t really have a perspective on what the next boat should be,” he said “But I also know we don’t want to stray too far from our original DNA as a custom sportfishing brand.”
Smith believes a brand like Hatteras — founded 60 years ago when Willis Slane launched the 41-foot Knit Wits, the world’s largest production fiberglass boat at the time — cannot be invented these days.
“There is so much noise out there in the business world that people are turning to brands with an authenticity,” he said. “As I get my mind around this, I’ve asked myself what does a brand really stand for? It’s definitely an emotional context. In the case of Hatteras, I think of the word ‘undaunted.’ ”
The brand’s reputation for offshore performance and seaworthiness, plus its ability to customize for clients, according to Smith, are what set Hatteras apart. “We’re an American builder that customizes for clients who have achieved a lot in their careers,” he said. “They want a distinctive vessel that isn’t just another boat in the marina. We have three boats in the show that are totally distinct from each other. Ultimately it’s about an expression of the owner’s personality.”
Smith said he doesn’t want to compete with brands such as Princess, owned by the luxury mogul LVMH, or even other brands in the sportfishing/motoryacht category, which focus on more production models than semicustom. “I’m perfectly fine letting them have their customers,” he said.
Instead, Smith wants Hatteras to move back to its roots, at least in its corporate messaging, as the offshore fishing boat or motoryacht that can be customized for owners.
“On the new 65, the owners wanted a New York interior, complete with a smiling skull inlaid into the countertop,” Smith told Trade Only Today at the show. “Traditionalists cringed at the color scheme, but the couple that owns the boat are happy. They are accomplished in business and sport fishing — she’s been nationally ranked as No.1 , and he has been ranked as No. 5. Ultimately, it’s about them getting what they wanted. We view that as an operating philosophy across both our motoryacht and sportfishing lines.”
Hatteras enjoys loyalty among its owners, Smith said, which includes multi-generation families. “We have customers who start their next boat as soon as they take delivery on the new one,” he said. “One owner is on his fifth boat with us.”
The challenge for Hatteras now, Smith said, is understanding the brand and why its customers value it so highly. “Why do customers wait 18 months to get their boats?” he said. “That’s the question behind our success. It then becomes a strategy of how do you build off that love of the brand. Really, that loyalty is everything and the foundation of the company. It’s a genuinely authentic brand, and we’ve never strayed from that.”
Smith said Hatteras could do a “better job” at telling the Hatteras story. “That means across all fronts, whether it’s the integrity of the product or the markets we’re aiming for,” he said. “The goal is to create stronger value for the brand in the marketplace.”