Oyster in liquidation

[Van Der Beek]

Originally Posted by double u

...so saaaad...we would have needed more of those!

That was both an embarrassment and costly mistake that should never have happened, I believe they used a way of construction never used before, I’d say bad management with poor judgment.

I haven’t paid much attention to Oyster but it would appear things started to slip with the new ownership, that they went into the boat building business for the wrong reason, to make huge profits.

That’s never going to happen when you build sailboats, unless perhaps you build cheaply made Euro barges that you can scale and spew out en mass, like a developing country would a car to prop up its GDP.

Look at Hallberg Rassy, exclusive sailboats, very expensive, but they are smart, It is a family owned and run business with no debt, they also seem to understand that this is a marathon not a sprint! Which means they are in the boat building business for all the right reasons IMO, I generally don't like their boats very much but credit where credit is due.

If you buy an exclusive sailboat company with the intent to make huge profits you're eventually going to kill it. Not to say Oyster is dead yet, but it's not looking too good.

[CarlF]

This is just another example of private equity destroying a great company. These firms exist to do financial engineering. They reduc costs by cutting staff and quality — to increase cash flow. This inevitably leads to problems like keels falling off.

They also load the company balance sheet with bank debt to pay themselves a dividend to get their original investment back quickly. Then, if the company doesn’t perform as expected they “exit” (that’s really what they call it) by flipping it to another PE firm (as happened to Oyster a while back) or cutting off the cash and let it fold.

[Pete7]

Meanwhile the hard working staff with mortgages, a wife and kids are completely stuffed. A very unfair world.

Pete

[CarlF]

The one happy outcome is that it goes into bankruptcy wiping out the PE guys and their debt and is then bought “free and clear” for a very small sum by someone who loves Oyster - like Richard Matthews or a group of Oyster owners. In these situation the court cares more about getting the jobs back than showing sympathy to a Dutch PE firm.

[Suijin]

I suspect this is due in part to the hollowing out of the middle of wealth distribution in developed countries. One "semi-custom" production boat company after another has gone down over the last 8-10 years. There are customers for the lower end true production boats and there are customers for the higher custom end, but fewer in the middle, and those are retreating down market where there is more "bang for your buck."

May be just poor management, and I suspect they'll be reincarnated somewhere else on the market spectrum. Does suck for all those workers, that's for sure.

[valhalla360]

Originally Posted by Suijin

I suspect this is due in part to the hollowing out of the middle of wealth distribution in developed countries. One "semi-custom" production boat company after another has gone down over the last 8-10 years. There are customers for the lower end true production boats and there are customers for the higher custom end, but fewer in the middle, and those are retreating down market where there is more "bang for your buck."

May be just poor management, and I suspect they'll be reincarnated somewhere else on the market spectrum. Does suck for all those workers, that's for sure.

What was the target audience for Oyster?

I suspect, middle class buyers were never the target of their marketing.

Agreed, is sucks for the workers but I'd be shocked if most didn't see it coming.

[sailorboy1]

it will all work and the only people who will end up getting screwed are the current creditors and the people who have made deposits on ordered boats

[Suijin]

Originally Posted by valhalla360

What was the target audience for Oyster?

I suspect, middle class buyers were never the target of their marketing.

I never said middle class. The wealth gap has pushed up farther than that while the cost of this category of boats has gone up significantly during the same period.

American yacht builders of semi-custom boats have gone under for the same reason. Valiant, Island Packet, and Pacific Seacraft (who are back, for the time being) to name a few bought it, and while these were expensive boats they were within reach of upper middle class...and then they weren't. Part it was the cost, part of it was changing tastes and needs, but part of it was also just fewer buyers who could afford that category of boat.

[ontherocks83]

Sad to see but, I'd rather have an Outbound anyways.

[LLizzard]

Originally Posted by a64pilot

I was really thinking about the big production Cats myself, as a rich persons toy to impress and entertain friends at a party, they are likely more impressive.
I had a big new Lagoon blow past me as I was coming out of Ft Lauderdale last Summer, was really cooking, making I’d guess 10kts. That was what I was describing cause I saw the Women walking around in their Cocktail dresses carrying their glasses of white wine, in high heels I’m sure. They turned North just off the beach by a half mile, I went out just a little further into the Gulf Stream and put up my code zero and with the stream boost slowly began to catch them. Absolutely perfect day for sailing, beam reach of 10 to 15, but they had no interest in sailing, this wasn’t about sailing, it was about impressing your friends in their formal attire, not sailing.
I don’t really know who buys a new Oyster, at some point as the production numbers decline, and the fixed cost continue to rise, you can’t make money on even an “overpriced” boat, sort of an economy of scale issue. 80 Million book of business doesn’t do much good if it takes 81 Million to produce them.
Assumption is successful custom builders have fixed costs that are a fraction of Oysters for example and can continue building a boat every now and again and keep the doors open, but the Production boats are giving what new Boat owners want, lots of flash for the least money.

Yep, women in cocktail dresses and heals while drinking wine and going 10 kts... THE HORROR!

[sailorboy1]

Originally Posted by ontherocks83

Sad to see but, I'd rather have an Outbound anyways.

Not really in the customer market as Oyster anyway

[frozenhawaiian]

Originally Posted by Kristoff21

Something clearly hasn't been right for a while at Oyster. The business was sold for £70m by its founder in 2008, then sold again a few years later for £15m and then..... bump.

I think that keel incident really, really, hurt them. The fallout from that made it look like the new owners were building boats under the Oyster name, rather than building boats to the Oyster standard. That boat did't hit anything, it wasn't grounded, the keel just fell off due to poor design and construction. They tried to hush it up but the pics spoke for themselves. Did you also see the sate of the extra tone of ballast that was literally dumped in the bow too? Looked seriously shoddy.

I see lots of Oysters around the south coast of the UK and in the med, always think they look great. Shame this has happened to the workforce.

The business must have sad serious problems though, I mean boat sales generally are quite healthy and interest rates in the UK have never been lower. The mini-rich are getting richer at the moment. If Oyster have gone under now, they'd have stood no chance at all in a more "normal" economic period.

I think you're right, that keel failure really hurt them, and in the world of yachts it doesn't take much to tarnish a good reputation. I've worked on oysters and I've always liked them, they sail well and the quality always seemed good on par with other high end semi custom builders.

[robert sailor]

Originally Posted by frozenhawaiian

I think you're right, that keel failure really hurt them, and in the world of yachts it doesn't take much to tarnish a good reputation. I've worked on oysters and I've always liked them, they sail well and the quality always seemed good on par with other high end semi custom builders.

Keels falling off does not instill confidence in the quality of the build but they fell off Beneteaus and Bavaria's..rudder failures on Beneteaus also happened but that hasn't stopped people from buying them so I'm not so sure that this is what is behind their failure but as others have said..boat builders come and go..not an easy business..

[wagsea6b]

Originally Posted by CarlF

This is just another example of private equity destroying a great company. These firms exist to do financial engineering. They reduc costs by cutting staff and quality — to increase cash flow. This inevitably leads to problems like keels falling off.

They also load the company balance sheet with bank debt to pay themselves a dividend to get their original investment back quickly. Then, if the company doesn’t perform as expected they “exit” (that’s really what they call it) by flipping it to another PE firm (as happened to Oyster a while back) or cutting off the cash and let it fold.

This.

[shadow]

I would hate to hear, but most likely, the execs will get their golden parachutes and the ones that actually did the work, and great work at that, are going to get screwed as always?!? I hate seeing good people with amazing years of experience lose jobs. I hope they can go to another local boat yard like Southerly and/or Discovery.. Perhaps even Spirit yachts if they are excellent in wood, etc..

I think I did read somewhere, where it stated that their annual was 45 - 65 mil, and their overall profit was something like, 100K?!?! When I read that, I thought it was a typo?!?! How can any company run on 100K annual profit.. I really do hope it works out because I've always loved Oysters and loved being on them and sailing them.. I want good people with excellent skills to build excellent boats that people love to purchase.. Good luck to them all..