The company’s leading dealer buys the brand and will sell the boats through two Florida outlets
Hydra-Sports Custom Boats president Alex Leva, who has been with the brand for 28 years, says breaking the news to dealers that the company was shifting to a factory-direct model after being sold was painful.
“Every single one had a different reaction; some were very, very tough,” Leva says. “I’ve signed every one of those dealers, and this is my life and my world — I’ve fished with them, been to their kids’ weddings, they’ve been to my daughter’s graduation and wedding.It was a very tender-hearted time. But everybody has to figure out a niche in the industry because it is such a hard time. It was tough. It was tough talking to some of these people who’ve sold our boats for 20 or 30 years.”
He says many of the dealers are seeking other brands or repositioning themselves, and he’s confident they’ll find new brands if they choose.
“These A dealers in A markets — they’ve pretty much the last few years been holding all the cards because very few people open to buy have floorplanning,” Leva says. “The ones still in business who were financially healthy, if you went to them, they wanted the sun and the moon. They wanted free interest, wanted you to pay for boat shows, sponsor tournaments, they want you to do this and that, and we did that. But then when we said it was time to stock more boats, they said, ‘No, we’re fine, we’ll just order them when we sell them.’ ”
The company announced in late September that Florida-based Plantation Boat Mart & Marina bought a majority interest in the brand from MasterCraft Boat Co. The deal was completed earlier, but the announcement was delayed to allow for a buildup of inventory. Three months into the endeavor, the company says it has sold more boats than initially projected.
The change to factory-direct gives the company more flexibility for customization.
“The boats come out of the factory turn-key, water-tested and ready to go,” Leva says. “The major change is in distribution. Where we normally had a traditional dealer network, we’re now selling directly out of our two factory test centers.”
A selection of nearly all Hydra-Sports models will be available at Plantation’s Florida waterfront factory test centers — in Palm Beach and Islamorada. The boats will continue to be built by MasterCraft in Vonore, Tenn., says Leva, whose position as president means he’ll split his time among the factory in Tennessee, the store at Palm Beach and the store at Islamorada.
“We have taken that [factory-direct model] to the next step, most importantly by having full-service factories and having boats in the water ready to test,” Leva says.
“The industry has changed monumentally,” he says. “It used to be our competition was Grady-White, [Boston] Whaler and Pursuit. In the last four or five years the factory-direct companies ... have passed [some of] those other companies. They offer factory-direct, but not to the extreme that we do. None of them are on the water, none take trades and none provide service.
“It’s taken us a while to build up inventory, so it definitely seems to be working,” Leva says. Hydra-Sports is building a combined total of 50 34-foot and 42-foot boats and will build some smaller boats as things progress.
A longtime family business
Plantation has been in business since the 1970s and the De La Torre family owns it. “They know everything about the business,” Leva says. “When business gets tough, the four of them can run the whole thing. They know how to roll up their sleeves and get things done and we’re not dealing with outside capital groups.”
As the dealership responsible for the lion’s share of Hydra-Sports sales, the fit made sense, Leva says. Plantation’s sales of the brand more than tripled those of Hydra-Sports’ No. 2 dealer.
Looking back, Leva says he has had only had one dealer whose complaint for the last 15 years was that he needed more boats, and that was Plantation. “He’d keep saying, ‘I’ll buy all the boats,’ and finally I said, ‘You know, be careful what you pray for,’ ” Leva says.
Many dealers had been ordering inventory conservatively because of the recession, and Leva finally began to seriously consider the one who wanted to buy them all. Eventually the two sides set up a meeting, talked for months and months and were able to work out a deal.
“They have been a dealer for 16 years, and they have been our No.1 dealer for 15 years,” Leva says.
Elias De La Torre III, CEO of Hydra-Sports Custom Boats and Plantation Boat’s president, said in a statement that he’s excited about the new endeavor.
“I … am proud to offer a premium level of customized service to our new and returning customers,” De La Torre said. “My family and I have spent thousands of hours on our own Hydra-Sports and feel very passionate about the brand — making us in tune with our customers and their needs. Now we can engineer the boats with our customers at our test facilities, giving them a truly customized boat that is reflective of their lifestyle. Whatever they envision, we can make it a reality.”
Dealers in the previous Hydra-Sports network will become Hydra-Sports service centers, Leva says. The company will continue to honor warranties, pay retail shop rates and sell parts to dealers so they can continue to service the thousands of boats in the field.
Additionally, the company has a working agreement with Yamaha. If someone who buys a boat lives in an area without a dealer, Yamaha will tell Hydra-Sports where the closest service center is.
Sales, however, will be limited to the Florida test centers. “Any new-boat sale whatsoever has to go through those two locations,” Leva says. “It’s the only place you can buy them.”
MasterCraft will be building the boats for at least the next five years, Leva says.
“We have a pretty unique agreement with them,” he says. “The engineering and sales will all report to me, and the manufacturing is run by Shane Chittum, the COO for MasterCraft. He will remain in charge of the day-to-day plant operations.”
This article originally appeared in the November 2012 issue.