GrandCraft Picks Up Speed
The company will produce a record number of the Chris-Craft-inspired boats this year, with lead times for standard models extending beyond 12 months. If growth continues as expected going into its "30 for 30" anniversary campaign next year, the 27-year-old firm will almost certainly be in the market for a new manufacturing facility, according to company chairman Tim Masek.
Masek led the 2005 acquisition of Grand-Craft from longtime owner Richard Sligh as then-managing director of Chicago-based TMB Industries. Although a departure from the private equity firm's normal acquisition strategy — it was primarily a turnaround specialist — Masek believed Grand-Craft could achieve some immediate and significant growth with an increase in capital and marketing efforts.
"This is an exciting business," said Masek, who left TMB in December and now owns the $10 million Grand-Craft outright. "It's a company that's now moving to the proverbial next level."
Its office already adorned with autographed photos of Robert Redford, Kid Rock, Jennifer Lopez and George Clooney, among other famous clients, Grand-Craft had become a couture brand with extremely limited marketing efforts. It rarely exhibits at boat shows, advertises in a handful of luxury magazines — including the Robb Report, which recently ran a four-page review of the Grand-Craft line — and until last year had no salesmen or dealers.
From his acquisition of the company in 1985 until Masek's hiring of a salesman last fall, Sligh, of the Sligh Furniture family, personally sold, designed and delivered every boat made by the company. He knew the owner and location of every single Grand-Craft boat in the market. Upon delivery, he spent time with the new owners — many times this would be their first boat — until they were comfortable driving it. On one occasion, Sligh spent three full days with a new owner.
"It was truly a craftsman-oriented company," said vice president of sales and marketing Corey Koopmans. "Dick was most interested in building great boats. It takes a different eye to look at where you might be able to find more value."
Under the new ownership, Sligh is now able to devote his full attention to building the brand. Koopmans now manages the company's sales efforts and deliveries. Masek has assumed the financial burden.
"I really don't want to retire," said the 77-year-old Sligh. "I'm just not sure how long I'm going to live."
Grand-Craft was launched by a group of retirees from the Holland Chris-Craft plant in 1979. The first boat, purchased by a Grand Haven man, came off the production floor in 1980 — it was the only one made that year. Chris Smith, grandson of Chris-Craft founder Christopher Columbus Smith, designed the company's first three boats. His son, Larry Smith, worked for the company for 13 years before his untimely death.
Grand-Craft boats are inspired by the mahogany runabouts, sometimes called water taxis, made famous by Chris-Craft on the
Power tools are the most advanced piece of manufacturing equipment on the factory floor. All vessels are crafted by hand from Philippine mahogany, requiring thousands of hours in addition to a month or longer in the finishing room. The
Since wood absorbs sound and vibrations, wood boats are a smoother and quieter ride than fiberglass boats. They are easier to maintain, requiring little or no wax and only a light sanding and coat of varnish every two to three years. And they are fast, with speeds of up to 55 miles per hour.
The higher quality comes at a significant price. A standard 20-foot Grand-Sport starts at $69,000. The Commuter and custom models can reach seven figures. Sligh expects the bigger boats to become a larger part of the company's business in the coming years.
Purchases have often proved an investment for owners.
"One of the real neat things about our boats is that, because they are so strong and well-made, with few exceptions we can sell them for more than what the customer paid for it," said Sligh.
There is no secondary market for Grand-Craft boats. The company brokers the majority of re-sales on behalf of its customers. On the day the Business Journal toured the facility, two boats that initially had been purchased by the same owner were awaiting touch-ups. The smaller of the two was purchased in 2001 for $225,000; Koopmans recently sold it for $340,000. The other boat, the owner's third Grand-Craft purchase, came off the production floor at a price of nearly $700,000.
"If he were to sell it now, he would get $60,000 more for it," Koopmans said. He estimates that the average Grand-Craft boat increases in value 8 percent to 10 percent from the time it is purchased to delivery. If a boat were purchased today, it would be delivered in the summer of 2008.
If, as expected, an increase in marketing and sales efforts further stresses Grand-Craft's ability to meet demand, the company will likely expand its 30-employee manufacturing facility at
In celebration of its 30th anniversary in 2009, Grand-Craft will produce a line of 30 30-foot boats inspired by 1930s Chris-Craft designs. Production on those models will begin later this year.
Sixty percent of Grand-Craft sales are currently word-of-mouth, Koopmans said. He hopes to leverage this network of customers to drive additional growth.
"We're trying to build a culture. We're not just selling boats," he said. "The trick is educating the customer. … It's like owning a Harley; your purchase is an entry into a lifestyle."
Koopmans sees particular opportunity in luxury waterfront communities such as The Cliffs condominium and resort communities in North and
"When we get one boat on the water in one of these communities, we take orders for another four or five," he said.