Winnebago president and CEO Michael Happe told the Sarasota Herald-Tribune that it plans to invest in Chris-Craft, which it acquired in June, to accelerate the Sarasota boatbuilder’s growth. “Over time, we’ll invest multiple eight figures in this business,” Happe told the paper.
Chris-Craft president Steve Heese told the paper that its plans for increasing its model range, facility size and workforce are similar to what they were before the acquisition. “It’s pretty much the same growth plan we had before the acquisition, but now we can execute it more quickly,” Heese said.
The plans include adding an 80,000-sq. ft. building, which would increase its current production space by about a third, and adding up to 250 workers over the next five years to its current employee base of 340. Heese said the company had 20 open positions last month.
“There are parts of the market we don’t participate in and we’re going to be able to migrate into those,” Heese told the paper. “Right now, we compete mainly above 25 feet and there’s a lot of market below 25 feet, so we don’t have to go very far down to pick up a lot of potential market.”
Chris-Craft builds 18 models on five production lines. Heese said that it won’t add lines, but it will be able to produce more models faster. The company had a four-month order backlog as of January.
Chris-Craft was purchased by Heese and partner Stephen Julius of Stellican Ltd in 2001 from Genmar Holdings, following the OMC bankruptcy auction. Julius specialized in acquiring and reviving heritage brands that had fallen on hard times. Julius had brought the Riva brand in Italy back to its former glory by introducing retro-looking models of the boat. Stellican paid a reported $5 million for Chris Craft’s assets. It also bought the right to the name from News Corp. for another $5 million.
Happe said Winnebago decided to purchase Chris-Craft because it helped diversify the corporation. Happe had spent 20 years with the Toro Company before taking over at Winnebago in January, 2016.
Winnebago, which had seen its revenues drop by as much as 75 percent during the recession, had decided to bring in a chief executive from the outside the company who could accelerate its recovery, either organically or through acquisitions.
“We looked for opportunities inside and outside the RV business,” Happe told the paper.
Heese had been speaking to Winnebago about a Chris-Craft-branded recreational vehicle concept, with its design cues along with high levels of craftmanship and fit and finish.
“Chris-Craft was interested in whether the RV industry could use a more refined approach to design,” Happe said, “and we were looking to expand our design approach as well.”
The two companies discussed mutual opportunities. That led to a trusting relationship. After Winnebago officials heard about Chris-Craft’s “growth plans and what they aspired to be, where they wanted to take their brand, and our team at Winnebago got excited about their vision and the way they did things, the way they treated their employees, the dealers, the way they took care of their customers,” said Happe. “So we started with this strategic, emotional marriage more than anything.”
Happe said a “sea of sameness” has enveloped the recreational vehicle industry, much as it has the boating industry. “But Chris-Craft, I believe, is truly one of the most unique companies in the marine industry where part of their purpose is not to be in that ‘sea of sameness,’” Happe said. “They want to stand out from the crowd. They want to lead. They want to create not just a visual differentiation but they want to create an experiential differentiation and an emotional relationship with their customers.”
Happe told the paper that his company, which now makes two non-discretionary types of products, will not be immune to the next recession. “Chris-Craft has an ability to weather storms economically and one way is that they do a tremendous amount of business outside the United States,” Happe said. “In the last recession, one of the things that carried them was their international business. That also appealed to us because we don’t have a lot of presence globally.”
Happe also noted: “The customer they appeal to is pretty affluent, so they are less impacted by short-term volatility in the economic markets and the financial markets.”
Winnebago’s goal is to become a premier outdoor lifestyle company, according to Happe, not just an RV manufacturer. “The marine industry is an adjacent industry we believe will grow as more people continue to come back to the water,” he told the paper.
“Part of our acquisition mantra is to find really good businesses that still have runway to be great businesses, and increase their top and bottom lines materially, given the support from a parent that is strategically aligned with their vision but also has the financial resources,” said Happe. “We will make it more accessible to more people through investments in operational capacity and investments in its dealer base and investments in the brand.”