8/19/08 Article

That's one of the biggest problems for any privately held company... The succession of the company when the owner wants to retire or cut back on the 100 hour weeks that they need to put in to the company out of their passion for it.

True, but I don't think this company came to the table to succeed the owner. Looks to my skeptical eye like they came with cash that allows the owner to retire from the business.

They had to have taken a giant bath with the whole Cobalt Yachts fiasco.

Beat me to it Capn. I was just going to post this. I agree Indy, The Yacht deal was a big cash cow. They tooled up a whole plant and made a few hundred hires they lost tons of cash. The article said it took two years to finalize. You know it took that long to decide to bring Yachts to Neodesha.

With a 1/3 partner I hope they stay focused on world class quality and service. The branding aspect is secondary to quality. Constant never ending improvement is key.

The same group brought the Under Armor Brand to where it is now. Which is where? A very expensive brand of longjohns and tight shirts that look totally riduculous on anyone the is not below 5% body fat. If they can get a guy like me to buy their stuff (hint: if your a LG buy XXXLG), then maybe they can do big things for Cobalt. They have the high price point thing down pat.

I forget the exact number, but the percentage of family businesses that are passed onto the third generation is something like 15%. The ones that survive are the exception not the rule.

Good for them. Great and quality folks.

Best wishes to them...

What I don't understand is that since it was a family run business, why not keep it that way?? They build the best boats under 26' and why not keep it in the family??

I know that only a few people know HOW much the yacht thing killed them in the pockets, but also believe that's not what they do best in Kansas. It's going to take them a long time to show the industry they can compete in the 37+ range of boats/yachts.

The yacht deal had to have been a huge cash drain. Combine this with the distractions of the yacht product, factor in runabouts designed over a year ago without the usual detailed oversight...model mishaps are bound to occur.

Allow me some modest speculation here . The new 33% owners are Bay Area equity investors specializing in consumer brand building backed by some known wealthy Lake Tahoe vacation home owners / boaters ( and which probably raised their awareness of the brand in the first place )and where it's obvious that Cobalt reigns supreme in sales due to it's solid Mercedes/Lexus like reputation and a top notch dealership but loses style points to the increasing numbers of new Chris Crafts around with their " spicier " Jaguar -like trim features . So...I wouldn't be surprised to see coming Cobalts (via input from Rosewood Capital's three board members ) to incorporate designer options pkgs /special editions with their very high profit margins even as they cut basic build costs in " stuff we hope buyers won't notice " while still keeping each boat model a bit less expensive than a competing size Chris Craft who they see as a real threat , esp at their biggest market , Lake Tahoe .

And for those wondering where the trend for browner/yellower Cobalt interiors is coming from , here's a new 2009 Chris Craft with a cool optional ( profitable ) gel coated matching deck :

Interesting analysis.

Interesting information. I don't think skimping on build quality is a good strategy in the long run though.

That Chris Craft is a striking boat. I can see why Cobalt is worried.

That Chris craft is really "retro". I think the market would be somewhat limited. Many people are looking for function over form, spending money on usable space rather than looks.

My point is most builders , other than Chris Craft , are building ever " bulgier" boats because today's buyers want their boats to hold as much as their SUVs . Look at how much more freeboard the newer Cobalts have- they are moving away from sleek in the water to " bleach bottle " like everyone else. Just look at a new 252 side by side in the water with the classic 262. My point was that the new partners may want to differentiate Cobalt as a " premium" brand by having some "luxury" trim packages that may alone return as much profit as the basic boat itself.
I.e., the looks of a Chris Craft if desired , with teak/trims,stainless,gel coats,unique interior color combos ,etc but the functionality demanded of a modern boat with Cobalt's quality reputation . They would be unique in the market , IMO , and I for one , as a Lake Tahoe boater would be first in line to order such a package , as I do admit and so do most of my fellow Tahoe boaters that the Chris Crafts are gorgeous and if the Warns ever sold their three Cobalt dealerships ( whose long time repeat customers are rightfully so loyal ) , I predict you'd see a stampede to Chris Craft ( where Tahoe is also their largest market ) like you wouldn't believe on that lake because of the wealth there. That would be a major problem for Cobalt as this is their biggest market where they currently hold probably a 75% share . It sure seems that way just counting boats .