Marina Sales

[tis]

Originally Posted by TiltonBB

Right dealership, different buyer. The new owner is very experienced and has multiple locations in Maine. They are really good people. The closing is in January.

Irwin Marine did get sold then? And to a Maine company?

[TiltonBB]

Originally Posted by tis

Irwin Marine did get sold then? And to a Maine company?

Yes, sold to a very reputable dealer with locations inland and on the Maine seacoast. Most everything at Irwin will stay the same, including the employees.

[tis]

Originally Posted by TiltonBB

Yes, sold to a very reputable dealer with locations inland and on the Maine seacoast. Most everything at Irwin will stay the same, including the employees.

Interesting. Thanks.

[steve-on-mark]

Originally Posted by TiltonBB

Yes, sold to a very reputable dealer with locations inland and on the Maine seacoast. Most everything at Irwin will stay the same, including the employees.

I feel so out of the loop! ;-)

[tis]

Originally Posted by steve-on-mark

I feel so out of the loop! ;-)

LOL. Me too. And we do business there even though it has been difficult the past few years.

[codeman671]

I’m hearing that Meredith Marina may be the next to sell.

[FlyingScot]

My understanding, and I hope someone will correct me if I'm wrong, is that the Goodhue owners are a private equity firm. If that's the case, that is likely bad for the community in one way or another as they focus more intently on the bottom line to the exclusion of other considerations

[sluggo]

I was doing some work for the yacht club and I was told three individuals bought Meredith marina a little while ago. There's an awful lot of changes happening around here lately !

[Garcia]

My fear with the consolidation/mergers is that in the long run the owners/investors make out well while the end user ends up paying more for less.

I hope I am wrong; time will tell.

[ghfromaltonbay]

Originally Posted by Garcia

My fear with the consolidation/mergers is that in the long run the owners/investors make out well while the end user ends up paying more for less.

I hope I am wrong; time will tell.

These investors are also buying up cottage rental colonies. Sandy Point in Alton Bay is a perfect example. Bought up along with 3+ other properties in Alton Bay by the same group. Rates increased over 100% for seasonal leases for next season.

[John Mercier]

Originally Posted by Garcia

My fear with the consolidation/mergers is that in the long run the owners/investors make out well while the end user ends up paying more for less.

I hope I am wrong; time will tell.

Due to the near impossibility that another marina facility could be developed on the lake, and expansion of current facilities are both limited and likely to spurn opposition; I would agree with your assessment of the value of the exclusivity in the investment.

[pjard]

It's simple supply and demand.

[FlyingScot]

Originally Posted by pjard

It's simple supply and demand.

Of course. But that does not mean it's a good thing for any of us or the lake in general. When you're an ordinary slob negotiating against another ordinary slob, it's all good. But when you're an ordinary slob negotiating against a professional investor with no other ties to the community, guess who wins every time?

[thinkxingu]

Originally Posted by FlyingScot

Of course. But that does not mean it's a good thing for any of us or the lake in general. When you're an ordinary slob negotiating against another ordinary slob, it's all good. But when you're an ordinary slob negotiating against a professional investor with no other ties to the community, guess who wins every time?

Are there any examples of a business going corporate that have worked out positively for the consumer?

I think about this a lot, actually, as I was part of the Tweeter explosion...and downfall, and two of the central causes of its demise were bringing in "big box" retailer "specialists" to run what was never supposed to be a big box business and going public/being beholden to profit-driven shareholders over what was best for the company AND its customers.

*There's a book called The Common Good by Robert Reich that I find very interesting. In it, he points to where he thinks the shift occurred from "stakeholder" capitalism, where employees, ownership, AND customers find the perfect balance to "shareholder" capitalism, where the focus is on maximizing profit.

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[Garcia]

Originally Posted by thinkxingu

Are there any examples of a business going corporate that have worked out positively for the consumer?

I think about this a lot, actually, as I was part of the Tweeter explosion...and downfall, and two of the central causes of its demise were bringing in "big box" retailer "specialists" to run what was never supposed to be a big box business and going public/being beholden to profit-driven shareholders over what was best for the company AND its customers.

*There's a book called The Common Good by Robert Reich that I find very interesting. In it, he points to where he thinks the shift occurred from "stakeholder" capitalism, where employees, ownership, AND customers find the perfect balance to "shareholder" capitalism, where the focus is on maximizing profit.

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For the most part, no. It seems we are shifting more and more towards "oligarchy" (can't think of a better word) at both the local and national level. At the local level near me, small family owned business like HVAC companies are being bought up and consolidated. I find it progressively harder and harder to get a plumber to come for small jobs; the rapport between customer and client has been lost. Motels/hotels are bought by larger chains. Housing is bought up by large scale investors. Car dealers are consolidated. Big media companies grow bigger (and seem to result in less service and higher prices) and Walmart and Amazon's bottom lines are boosted while locally owned business by me are closing.

Intentional or not, this is the direction we seem to have chosen to go both at the local and national level. My kids are navigating a different world than I did at their age. Back to the Lakes Region, I am doing everything I can to ensure the island property and lake access I was fortunate to grow up with will be preserved for them as the days of someone with my chosen career path (or theirs) buying island property on Winnipesaukee are pretty much gone. And back to Shep's specifically, since Goodhue bought them I have not seen better service or lower prices.

[John Mercier]

Not really the difference.
Corporate tends to have universal policy across national or international borders, while private tends to be a local policy.

The ROI expectation is about the same regardless.

I have box, independent, and my family has owned... same expectations.

What everyone had in common... efficiency of process and customer.

[Garcia]

Originally Posted by John Mercier

Not really the difference.
Corporate tends to have universal policy across national or international borders, while private tends to be a local policy.

The ROI expectation is about the same regardless.

I have box, independent, and my family has owned... same expectations.

What everyone had in common... efficiency of process and customer.

Sounds good but my experience in my community (and life in general) is different - at Sheps as well. When my local lumber yard was bought, a local hotel bought by a national chain, and HVAC companies consolidated (along with heating oil) I have found my satisfaction go down and the costs go up. I guess this is the cost of progress

[TiltonBB]

A local business being bought out by another company or another individual usually requires a buyer who has had success in another area so that they can come up with the funds needed. That is not only for the purchase but they need enough capital to operate the business starting on day one. A week after you buy, payroll is due.

That usually means that successful people will be the buyers. It is good news when a buyer comes from the same industry, like the marine industry. That means they have a successful track record and know how to run that type of business. Their previous success is often an indication of how they run sales and service and how they treat customers in general. With the internet, a business that treats people poorly gets outed pretty quickly.

There is a local example of a marina that was bought out about 15 years ago by an individual without marine industry experience and a personality that may not have been the best for the job. I don't think he was profitable and within 3 or 4 years he sold at a significant financial loss. The subsequent buyers of that business are the exact opposite and have done very well with it.

[Biggd]

Just look what happened with Newpro, bought up by a hedge fund and they bled it dry. They closed the door taking everyone's deposit money with them and leaving projects unfinished.
I'm not saying this will be the end result with these marinas but when large investment groups buy companies they won't think twice about closing up if they are bleeding money. They are just in it for the money not the community.

[Descant]

A small business owner has different rewards than an employee. The buyer of a buisness has to deal with employees and a different set of compensation. When buying, an early consideration has to be "How can we increase revenues to pay off a new mortgage or investors?". Raise storage fees and sell more boats. I see an approaching level of market saturation here. Expanding the physical plant to store more boats may not be possible, and if you can't store them, it is more difficult to sell them. Post WW II many island residents did not own a power boat--they relied on a taxi service. Perhaps we will go back to that model as mainland access becomes more expensive and harder to obtain?

[John Mercier]

Consolidation is a bit difference than a change in business governance format.

What you may be noticing is a change in business model.

When Lavalleys (family owned) bought Gilford Home Center (family owned).
No change in governance format. The change is the business model.

The marinas will most likely see changes in the business model.
Same thing happened with Church Landing.

[FlyingScot]

Originally Posted by thinkxingu

Are there any examples of a business going corporate that have worked out positively for the consumer?

I think about this a lot, actually, as I was part of the Tweeter explosion...and downfall, and two of the central causes of its demise were bringing in "big box" retailer "specialists" to run what was never supposed to be a big box business and going public/being beholden to profit-driven shareholders over what was best for the company AND its customers.

*There's a book called The Common Good by Robert Reich that I find very interesting. In it, he points to where he thinks the shift occurred from "stakeholder" capitalism, where employees, ownership, AND customers find the perfect balance to "shareholder" capitalism, where the focus is on maximizing profit.

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PE has two faces:

When the investors are investing in the business for growth, it works out well for all if the business is successful--tech, biotech, pretty much all the high growth companies in the US had PE investors at some point (I include venture capital as a subset of PE). This is the American Way

But when PE invests in low growth mature businesses, such as mom & pop marinas, they are typically looking to squeeze maximum profit rather than boost growth. And even if they do figure out a way to grow, the lake is a finite resource, so....Reich, or at least his friends, would call this extraction capitalism. Not really good for anyone but the PE guys

[TiltonBB]

In many cases private equity groups buy a business in conjunction with an experienced operator to run the business. If it makes sense, after the rent and details are worked out investors may be looking for an annual return on the invested money with a plan to sell and make money from the business and real estate appreciation. A lot of times, before the purchase is finalized, the exit strategy, including the number of years a property will be held, is already worked out

The principals understand money but are usually smart enough to know their limitations.

[BillTex]

Originally Posted by TiltonBB

In many cases private equity groups buy a business in conjunction with an experienced operator to run the business. If it makes sense, after the rent and details are worked out investors may be looking for an annual return on the invested money with a plan to sell and make money from the business and real estate appreciation. A lot of times, before the purchase is finalized, the exit strategy, including the number of years a property will be held, is already worked out

The principals understand money but are usually smart enough to know their limitations.

Some of this is true. I have been involved in transactions where the principals thought they were a lot smarter (i.e. experienced) than they were. Being an “investor” doesn’t make you a marina manager, or a manufacturing ops manager…but some investors “think” they are.This usually doesn’t end well. IME a lot of PE is speculation, with a lot of ventures ending in disaster. For all.
There is a big difference between PE buying up Mom+Pops vs PE investing in multi million/billion $ corps.The Mom+Pop guys don’t have a great success record. IME.

[John Mercier]

The exclusivity of the underlying property drives the investment growth.