West Marine Restructures Debt

[MJH]

Originally Posted by GordMay

West Marine Reaches Deal To Restructure Out of Court

West Marine has reached a deal to restructure its roughly $800 million of debt out of court.
The Fort Lauderdale, Fla.-based company will receive $125 million of new funds from L Catterton, its private-equity owner, as well as a group of existing lenders.
Approximately $660 million of West Marine’s debt will be converted into equity warrants as part of the deal.

➥ https://www.wsj.com/articles/boating...court-c16fc706

I shop West Marine (WM) when it is to my advantage. Like all purchases, get the make and model number of the item you need then shop the Internet for the best price including taxes and shipping.

I like WM return policy and have used it a number of times. Their rewards are meager (most other marine stores don't give any) but I don't buy there because of it. I still keep their old catalog to look up stuff. The local mini-store is handy. They seem to handle a lot of the popular toys and other stuff but not much of the big important sailing items you really need.

[YANDINA]

The situation from an insider.

When I first got involved with West Marine manufacturing a number of products under their WM brand name they were run by boaters who knew the business.
As they grew they employed more and more bean counters and became top heavy.
They had department heads for every division - - selling, buying, storganization, shipping, receiving, customer support, returns - - the list goes on.
Each department had to compete to justify their existence. Receiving would fine you $100 because you misplaced a shipping label. Storganization would charge you for shelf space but Ordering did not place orders for that shelf. I had to raise prices to cover the unnecessary overhead costs paying fines and various fees to each department which resulted in higher prices for customers to cover internal non-productive shenanigans. Eventually orders dried up despite steady sales and I suspect their buyer was looking for a kick-back but I did not get into that.

[MicHughV]

I find that my local WM has become more of a clothes boutique than a marine store...that and fishing gear......used to be a time you'd see a half dozen inflatable dinks outside the store.. now see none...
As above, not sure how long they can stay in business

[nonav]

West can be a bit frustrating at times, but so can anyone, including all of us!

That said, pricing with a Pro Account can bring costs down considerably.

Breakers, normally $45.00 are about $15.00.

They’re making a profit at $15.00, so I don’t get tripling the price.

Same goes for heat shrink crimps, blade fuses and such.

[Sailmon]

More insider info… I assistant managed a small but very successful store. For many years, WMs return policy was too liberal. They would take back just about anything - even used equipment. They would in turn return it to the manufacturer or distributor or request a credit. After years of this suppliers started charging WM higher wholesale prices - which WM has had to pass along to the customer. This along with being top heavy at corporate has hurt. As far as individual store quality, it really varies from store to store, depending on quality of the manager & staff. Stores often have retired people as associates who have long boating experience & knowledge. In tight labor markets, associates are often high school kids with little or no boating knowledge. West marine’s wage structure is not great.

Last thought - their price matching policy is a real thing. Takes a small bit of work on customer’s part but can pay serious dividends.

[sailingharry]

Originally Posted by MicHughV

I find that my local WM has become more of a clothes boutique than a marine store...that and fishing gear......used to be a time you'd see a half dozen inflatable dinks outside the store.. now see none...
As above, not sure how long they can stay in business

I remember a day a few years back when I went into West Annapolis for something, and literally (and honestly) turned to the front desk and asked "do you still sell boat stuff?" She said, yes, go to the back of the store behind that wall. The initial impression was 100% clothes, fishing, paddle boards, coolers, etc., with not a bottle of oil, a spool of line, or an anchor to be seen.

[Cheyne]

We use the store in Gloucester, VA and they sell no cloths. Just boat stuff. A couple of the employees live near us and keep their boats in the same marina as us. Give them a call and they will bring stuff when they come home. I try to use local stores, including West Marine, instead of online.

[Lateral Hazard]

As others have mentioned, Private Equity caused this. Here is a rudimentary explanation.
Let’s say, as a Private Equity Company, I come to you about selling your boat. You have a corporation that you have set up for your boat. They buy the corporation and now own your boat and the corporation. They then take the worth of the corporation and mortgage it to the maximum worth to pay off the loan they took out to buy your corporation as well as paying back all the costs along with their investors.
So the PE uses the West marine loan to pay back their costs and profits and West Marine is left with an over leveraged company

[Tupaia]

They blew there overseas and international sales. I used to use them a lot then shortly after Randy sold they insisted on wire transfer of funds prior to shipping (with undefined shipping costs) instead of CC. Haven't used them since. Sounds like the accountants and bean counters have done for them.

[Lateral Hazard]

It is not accountants or bean counters. They are just tools the PE’s use.
It’s business. Incredibly unfair and sometimes immoral but that’s the way private equity works.

[GoinSumWare]

Originally Posted by sailingharry

Their price matching used to be good. The last time I checked, they would only match a brick and mortar store within a fairly small radius. Why would I go to the research to find a lower price and then go to West Marine when I could go to the guy who actually is selling it for that price?!

Maybe they've changed it again, but right now their price match is nearly worthless.

In addition to price matching brick and mortar stores within 50 miles, West Marine ALSO price matches Amazon - provided the item is shipped and sold by Amazon rather than a third party vendor.

[bobatkins]

This is just a sad reflection on the reality of the recreational boat business and supporting businesses being squeezed from every possible direction.

I shop at WM (Pro account) because all of the other boat supply businesses in the Marina del Rey, CA area have closed over the last 10 years so WM is the only option. The local WM store also scaled its retail space down by 50% as well, no doubt because of usury rents. They still manage to have a lot of useful parts and supplies on hand and their minimal staff is friendly and helpful.

I suspect the this debt restructuring is going to drive more price increases that will in turn push more customers to purchase online and the vicious downward spiral will continue until eventually WM closes most of its retail stores or goes Chapter 7 BK (liquidation).

[CaptTom]

Originally Posted by Lateral Hazard

It’s business. Incredibly unfair and sometimes immoral but that’s the way private equity works.

Good point. I've been around long enough to see this cycle repeat over and over. A good business expands to the point where it's being run by MBAs instead of the original owners. It continues to grow for a while but eventually loses sight of whatever it was that customers liked in the first place. They coast along for a while, rotting from the inside.

Eventually customers find the value they're looking for elsewhere. Often the company succumbs to bloodthirsty PE firms and is sucked dry. At some point bankruptcy becomes inevitable.

As you say, it's not good or bad, it's just how the system works. I have no problem getting the gear I need whether WM survives or not.

[SomeGuyInaShirt]

I gather West Marine dinghies are a gamble but mine cost $500 and is still full of air 3 years later. Online retailers have the advantage, though.

[Chotu]

Originally Posted by SomeGuyInaShirt

I gather West Marine dinghies are a gamble but mine cost $500 and is still full of air 3 years later. Online retailers have the advantage, though.

I have to agree about holding air. My West Marine 310 rib was fantastic with holding air. It turned into a gooey mess withon six months New England sunshine, but yet it lasted for years without needing any air.

Ultimately, the transom was restructured, just like the parent company. It broke apart and started leaking water in and the outboard was about ready to fall off.

So, it has been retired