In Part I, we saw how Lewmar, the British leisure marine equipment supplier who designs, manufactures and distributes a wide range of products including anchors, winches, windlasses, hatches, hardware, rigging, steering and thrusters, had not long ago had its back up against the wall.
One of the major stakeholders in the company, as it was, installed Peter Tierney as the new CEO and he set about deploying his 20 years of experience as a Corporate Doctor to turn the company and the iconic brand around – quickly!
Significant re-grouping, restructuring and reinvestment programs have yielded great results with an impressive new items being released in time for the 2010 METS (Marine Equipment Trade Show) event in Amsterdam last month.
In the second part of this interview we discover how Lewmar’s business spans three main market sectors; Original Equipment Manufacturer (Production Boats) 40%, Super Yachts (Custom) 30% and Aftermarket, the remaining 30%.
The latter is important, for this is the one that has allowed Lewmar to keep going in the difficult times.
It remains a strong percentage of the overall market, albeit that it is not quite at the same levels that it was prior to the downturn.
Peter Tierney - .. .
‘This part of our business has remained strong throughout the world. The logic is incredibly simple, people stopped buying new boats. However, people who owned boats decided they would spend a few bucks topping off what they had. So they bought new winches, hardware and gear like that’, Peter informed us. Peter has actually sailed from well before he arrived at Lewmar, so he sees a lot of things from the point of view of the average boat owner.
‘I was down at the Southern shores of England and I saw a shelf at a local retailer.
‘On that shelf was an anchor and above it was a sign that said, Delta style anchor, yet the item was clearly not ours.
‘Two things were very clear to me. Firstly, we had obviously not sent the right message out to our distribution network about imitation products using our Intellectual Property, such as Delta and two, I looked at it as a practical boat owner.
‘I thought I can buy a Delta anchor for my 200,000 pound pride and joy (second only to my wife) or I can buy something that doesn’t have the design or the proven technology and save myself 40 Pounds. You see if I am going to buy an anchor, I want an anchor that works. Buying a copy of Lewmar’s proven design of unknown origin and manufacturing to save 40 Pounds and then to hang 200,000 Pounds off the end of it just doesn’t make sense to me.
‘Our product range may have grown significantly, yet every product we engineer and market - from steering and anchoring systems to winches, hatches, hardware, and bow thrusters - is focused on empowering boaters with a greater sense of control over their craft’, Peter added.
The OEM side has always been a significant part of Lewmar but this is the very sector that did not just slow down, it bound shut.
Whilst it has certainly recovered it has not recovered back to where it was say three or four years ago, when it was at the top of its game.
It is probably something like 50% now. This is a sector very much driven by the USA. The USA was the powerhouse of powerboats and they are just not building them. Overall the US boat market is quiet and the US sailboat market is coming back, but much, much slower than the market in Europe.
The powerhouse of OEM building is now in Continental Europe – Germany, France and the Scandinavian countries. ‘This is good for us moving forward’, said Peter. ‘If you aggregate everything that the owners and directors of these companies tell you, they are predicting somewhere between 5 and 7 or 5 and 8 percent growth p.a.
‘True, it is not a significant growth, but I think what we have to do is to try and follow that sensibly. We can’t think that we are going to grow at a 20% rate, because we are not. I know that if this business is profitable and grew its profits 5 to 8 percent year after year for the next five years, then I will be delighted.’
The final sector Lewmar operates in is the Super Yacht scene. Not surprisingly, this is a market that has remained pretty buoyant. ‘I don’t really project a huge amount of growth within that sector, it is solid and will continue to do well. We don’t really wave our flag high here, but we’ve just been at the Monaco Super Yacht show where we featured our CAT systems onboard one of the vessels’ Peter explained. Lewmar is also in the design or building phases for several others in this high-end, custom sector.
In terms of new products the retail and OEM markets will get both see some of the action. Between September and Christmas one of the things Lewmar has been doing is inviting some of their OEM distribution clients in to be part of the R&D process. ‘I think everybody was kind of excited.
We have built a new showroom at our headquarters, which ironically is something we had never had. I guess it is a by-product of having downsized the organisation. Customers can view all of our products, view videos of our development and what we are working on. We can do this from an audience of one to five or six in a private anteroom or seat 200 in the main theatre. We are really quite proud that we are bringing customers, press and distributors to the facility and allow them to engage in what we are doing’, Peter concluded.
As a result of the restructuring programs, reinvigorating of the esprit de corps and reinvesting in new R&D, new products were revealed at METS 2010.
When it is all said and done, if you need new marine hardware, then you must see what a renewed Lewmar has to offer at lewmar.com or email email@example.com