West Marine Restructures Debt

[GordMay]

Originally Posted by CaptTom

Bingo! I don't know when the purpose of a corporation changed from providing goods and services to enriching stockholders...

That occurred on December 31, 1600*.

Prior to the 17th century, the first corporations were created, in Europe, primarily as not-for-profit entities, to build institutions, such as hospitals and universities, for the public good. They had constitutions, detailing their duties, overseen by the government. Straying outside these was punishable by law.

Only in the 17th century, did making money become a major focus, for corporations. Their wealth was used to finance European colonial expansion [eg: the Dutch and English East India Companies, etc ]. Companies were used by the imperial powers to maintain draconian control of trade, resources and territory, in Asia, Africa, and the Americas.

Corporations, as we know them, came to being in Britain, with an 1844 Act, allowing them to define their own purpose. The power to control them, thus, passed from the government, to the courts. In 1855, shareholders were awarded limited liability: their personal assets were protected from the consequences of their corporate behaviour.

* The English East India Company was incorporated, by royal charter [under Queen Elizabeth I], on December 31, 1600.

[CaptTom]

I love a good history lesson, thanks!

But you touch on a good point. Corporations are given special treatment (limited liability, tax advantages, etc.) by society. What does society get in return? Obviously if they offer goods and services people need, that's your answer. That is the primary purpose of a corporation. Not enriching a few PE firms or stockholders.

[Lake-Effect]

Originally Posted by CaptTom

I love a good history lesson, thanks!

But you touch on a good point. Corporations are given special treatment (limited liability, tax advantages, etc.) by society. What does society get in return? Obviously if they offer goods and services people need, that's your answer. That is the primary purpose of a corporation. Not enriching a few PE firms or stockholders.

Well, that was the theory: granting freedom and protections to corporations was supposed to maximize the benefits they provide to society as well as to stockholders.

In reality, corporate power is as prone to abuse as any other human endeavour, and many of the economic, political and social issues we currently wrestle with in N America are a result of the enhanced political power and control that corporations, and those who've grown extremely wealthy from them, now wield.

Originally Posted by Island Time 025

We have placed lower tier least productive labor force on welfare of one sort or another. That took out the base from the affordability of massive public projects which required a lot of unskilled labor. So now 1 mile of any road, not even an interstate, even adjusted for inflation, costs as much as tens of miles cost in 1950s. Precisely because those who used to be hired for meal wages are now well taken care of by the government without any serious requirement to work.

Same with any other manufacturing process requiring significant amount of unskilled labor which cannot be done by the machines.

Like the song from Hamilton:

Immigrants! We get the job done

The megaworks you point to - agriculture (especially cotton and sugar), railroads, roads, construction, etc and just about the whole bottom tier of unskilled, undesirable, low-security, lower-paying jobs... historically depended, and still depend on bringing in lower-cost outside labour (legal, illegal, coerced) whose own situation is so desperate that the crap jobs that we natives won't touch are a still a step-up. Exception being the Great Depression, when desperation could be found locally.

(and we still need more immigrants to fill those jobs, so the current trend to demonize immigrants is curious)

In real terms, wages for the lowest tier of workers have declined. Two minimum wages are no longer enough to live on. Welfare is the finger in the dam that stops more workers from becoming desperate enough to band together to fight for better.

The law of supply and demand states that in a pure market, price and supply find their correct levels. Employers complain that they can't fill current low-paying vacancies. Connect the dots...

[KingRichard]

Originally Posted by Training Wheels

I once ordered a length of line from West Marine. Evidently the first spool was 2’ short. They sent me a section 2’ less than I ordered, and an additional piece 2’ long! [emoji23]

Same thing happened to me! I was replacing my lifelines and vinyl coated wire rope was on sale, so I was going to buy a little extra and save it for another project. I could only buy 74', so I thought I would be nice and just buy the rest of the spool... It showed up in 4 pieces from 3 different stores, some weren't even as long as the package said To their credit, they refunded my money.

[Kettlewell]

Same thing happened to me! I was replacing my lifelines and vinyl coated wire rope was on sale, so I was going to buy a little extra and save it for another project. I could only buy 74', so I thought I would be nice and just buy the rest of the spool... It showed up in 4 pieces from 3 different stores, some weren't even as long as the package said To their credit, they refunded my money.

It used to be that off-cuts of line and such were sold in stores at big discounts. I used to get a lot of my line by looking for useful off cuts, but today it seems they just slap the regular price per foot on this stuff. Maybe that is a corporate thing or maybe it is just the stores I go into.

[nextis12]

Originally Posted by Madehn

I find them overpriced and their staff not very knowledgeable. I literally stood for 1/2 an hour in the Kemah Tx west marine with my checkbook in hand trying to get someone to answer questions about a chartplotter and radar. Ended up going home totally aggravated and bought 13k worth of electronics on line. Their prices are quite high also. Basically I will only go there if the local chandler and local hardware don’t have it and I have to have it today. Otherwise just not worth dealing with their prices and staff. Incidentally this is supposed to be one of their larger flagship stores. Frankly I don’t see them in business much longer.

Agreed, how can you pay someone knowledgable about chart plotters and rent to provide a local showroom (add in theft) and offer prices equal to on-line. Brick and mortar retail is a tough business.

[jlynker]

Originally Posted by CarlF

Another example of Private Equity raping a marine supplier. While I don’t know the details on West, the usual game is they make an investment and simultaneously have the company take out a huge loan. They then pay themselves a dividend out of the borrowed money to get their investment back within a year.

To pay the huge interest payments on the loan the company cuts costs by laying off staff and raising prices. This causes the business to go south. Eventually the company faces bankruptcy and the lender has to write off the loan. The only one who who comes out whole is the PE company who already got their investment back plus an annual management fee of several million for their trouble.

Now it appears the PE company is just going to repeat the scam. They are making a new investment and West is borrowing new money likely at a much higher interest rate. The previous borrower is getting nothing but some likely worthless stock warrants.

...and their employees are assisting their own demise! In 2022, I spent over $6,000 with West Marine. I have a store within 500' of my boat in Everett, WA, During the 2021 summer/fall season, I'd befriended one of their salespersons personally and even helped recommend that employee for promotion to a manager prosition with the Seattle store., A year later, having lost email contact with that employee, I sent a nice gift - one sent/received the prior year which was received with a positive response, Ah, but this time, the otherwise valued customer (moi) got No Trespassed from the Seattle store. This customer has NEVER been in the Seattle store. Another recent promotion from the Seattle store back to the Everett Store and within a couple weeks, customer gets a call from Asset Protection Manager "Tom" threatening police action and issuing another NO TRESPASS! to the Everett Store... I haven't been in the Everett store since October 2022. December 29, 2022 I had my grandfathered West Advantage account disabled...

None of my communication with this employee or West Marine overall was in any way threatening, hostile, no sext pics or anything like that. All well above board and concerned for all parties involved. Now I'm pursuing a Protection Order against this employee because under RCW 9A.46.020, malicious acts of No Trespass for "acceptable behavior" (WAC 468-300-806 is harassment. I don't care how limp your Corporate Legal budget is... West Marine needs to stop calling devoted ex-customers with threats of police action. It's not helping their bottom line.

This year, I've collected over $2,200 in receipts of product I would have bought at that Everett West Marine. I think I'll pack them up in January and send them to Chuck Rubin as a metric of West Marine's hatred celebration for Ex-Excellent Customers.

After suing Harbor Marine in small claims court, I'm back shopping with them! But Fisheries Supply has become my new favorite toy store and as long as my Leaf battery allows me to get their round trip, just give me a reason to go there... just do it! /Go Lizzy! Run those hated male suitor customers out of town! Geezzz The people who think they are friends of West Marine employees these days. It's like they all want that 40% employee discount..

Oh, btw, I did apply for a job at West Marine... they hired a young 20's female who didn't last. Something about having 40 years of sailing experience isn't pretty enough for a West Marine showroom.

...and if you engage with wmcustomerservice@westmarine.com (say, by request via a Yelp post), it's a black hole.

[sv_isara]

Some people go their whole lives without suing anyone. And others sue every store they shop at.

Those are expensive customers

Call me nostalgic but I like west marine. It's expensive, it's fun - just like sailing

[jlynker]

Originally Posted by sv_sharky

Some people go their whole lives without suing anyone. And others sue every store they shop at.

Those are expensive customers

Call me nostalgic but I like west marine. It's expensive, it's fun - just like sailing

I sue people who break the law or rip me off. In 65 years, I've sued 4 organizations. I'm glad to live in a Democracy where the public has facilities to redress issues. Not a fascist state where businesses are judge, jury & enforcer of their own harassment upon customers.

[skipperpete]

Originally Posted by jlynker

I sue people who break the law or rip me off. In 65 years, I've sued 4 organizations. I'm glad to live in a Democracy where the public has facilities to redress issues. Not a fascist state where businesses are judge, jury & enforcer of their own harassment upon customers.

Hi Jlynker and welcome to the forum.

[jlynker]

Originally Posted by skipperpete

Hi Jlynker and welcome to the forum.

Thank you skipperpete!

I'll post an introduction soon..
tl;dr - I'm gearing for an Alaska trip if health holds out.

[Sailshabby]

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

West Marine finally eats itself after eating everyone else.

[jlynker]

Originally Posted by Sailshabby

West Marine finally eats itself after eating everyone else.

Beware the Belch! [BUUURRRP!!]

As stated above, lots of investors lose. Pro-Supply chains are disrupted. Pricing at remaining stores goes haywire. Employees lose out... those that don't bail early. Now would be a good time to take an Account Manager position with Amazon! Starts at $120k/yr, but I digress...

Mostly, the damage being done is cultural. When a leading retailer gets the success DTs if you will, while being bled from the inside out, there's no incentive to perform consistent with a healthy capitalist corporation.

They on welfare. [FART!]

[pbiJim]

Originally Posted by Celestialsailor

Amazing at the prices they charge that they would be in debt. Maybe because of online sales.

The high prices are the main reason why they are not doing enough business. I buy as little as possible from them.

[Letterkenny]

Originally Posted by CarlF

Another example of Private Equity raping a marine supplier. While I don’t know the details on West, the usual game is they make an investment and simultaneously have the company take out a huge loan. They then pay themselves a dividend out of the borrowed money to get their investment back within a year.

To pay the huge interest payments on the loan the company cuts costs by laying off staff and raising prices. This causes the business to go south. Eventually the company faces bankruptcy and the lender has to write off the loan. The only one who who comes out whole is the PE company who already got their investment back plus an annual management fee of several million for their trouble.

Now it appears the PE company is just going to repeat the scam. They are making a new investment and West is borrowing new money likely at a much higher interest rate. The previous borrower is getting nothing but some likely worthless stock warrants.

Well that’s not always the play and I assume what they did more so was structure the purchase price with debt versus paying themselves out a dividend (I have seen this as well but not in these types of transactions). Their most likely liquidity event is an IPO or sale to another PE shop. Management fees are pretty small dollars to be honest and it is about ROI for the fund investors so being debt ladened helps that metric.

Warrants are also likely not worthless as they seem like they will likely be the owners if they were to ever go bankrupt. More so, debt was coming due and this was the most advantageous way to get favorable financing in a period of high interest rates.