Brett McGill has been a part of MarineMax since the company’s formation in 1998, coming on board his family’s company as director of information services. Since then, he’s worked in nearly all of its divisions, leading to the company’s board appointing him president and chief operations officer in 2016. As part of a two-year succession plan, he replaced his father as chief executive officer in 2018.
Since that time, the country’s largest recreational marine retailer has made several significant acquisitions, from Fraser Yachts and Northrop & Johnson in the superyacht sector to last year’s addition — the largest-ever acquisition for MarineMax — of Silver Seas Yachts and its affiliate, SkipperBud’s.
MarineMax is now coming off several record quarters, having seen its highest revenue and earnings in company history in fiscal 2020. In May, MarineMax announced that it had acquired Oconto, Wis.-based KCS International, the parent company of Cruisers Yachts. MarineMax paid $63 million for the 68-year-old builder in a deal that included the former Carver and Marquis facility: a 216,000-square-foot, purpose-built manufacturing space that will significantly expand production capabilities.
The Cruisers purchase was a big surprise. What drove the deal?
I think Cruisers shocked everybody. Within the industry, when Sea Ray left the sport yachts and yacht business, at that time we were actively looking at should we jump in and purchase Sea Ray? And that probably wasn’t public knowledge. But of course, we were looking at it, because it was such a big part of our business over all those years. We needed something right here in the U.S. It just really made sense for us. And in the grand scheme of MarineMax, our size, this is a nice piece that fits into the puzzle.
When we had SkipperBud’s and Silver Seas join us, all the stuff we say in our press release, but literally that was it. All of a sudden, we said, “Wow, OK. Cruisers is a great company. They’re a big part of Silver Seas and Skipper’s business.” We got to know them. And then we had heard that the owner was thinking of selling. We got to know him, and guess what? He wanted to sell it to put it in the right hands. He bought the company to save the town, really. Saved the town’s a little strong; he bought the company because he was passionate about Oconto and he wanted to keep those people working and keep that factory doing well.
What do you see for that brand going forward?
When we met them to talk about purchasing Cruisers, they had shared the plans that they were looking to expand the [Oconto] plant and buy the Carver/Marquis Pulaski plant. Of course, that influenced our ability to say, “Hmm, does this make sense, more sense, less sense?” It actually made more sense, because when we make an acquisition, we look at what’s the upside. Of course, it’s a good, functioning business, you get that business, but then can it grow? And boy, I mean, that made a lot of growth sense for how long they could grow. Doubling capacity is a pretty good thing.
Will new models be developed?
Just like with all our manufacturers, one of the great things we have is tight collaboration. And we always say our different manufacturers all have a lane on the highway that fills a customer need. There’s some overlap, but for the most part, these brands fill the right lane. So that’s the first thing you do, is you look at a great company building great boats and we say, “We want to keep them doing that.” And we like the lane they fit in, that’s why we did it, so keep developing in that lane.
And when they brought the Cantius product [flybridge and express models from 42 to 60 feet] to market, I mean, it made a big impact. Sea Ray was trying to compete against that back in the day. We think they have great product there. They already had this on the planning board, but you’ll see more models there. But as we both know, the outboard segment, that 42 and the smaller 34 that’s coming out, they’re great products. [With] Mercury engines, they’re selling like crazy. So, both of those segments are very important to us.
How does the acquisition complement your other builder relationships, such as Aquila, Azimut and Galeon?
Back to those lanes and the incremental growth. With all my investors looking at what we do, everything we do really has to be incremental, or it’s not good for our investors. If we take on a brand to get rid of a brand, however that might be necessary at some point in the future, I can’t imagine why you might have to do that. But for the most part, we have to make it incremental for our investors [as] it gives us incremental growth.
Our job is to not allow Galeon to try to become an Azimut. Azimut has its luxurious play, Galeon’s a great play. We were missing that American-built sport yacht and yacht. Just from a business standpoint, it’s nice to have a U.S.-based company that we don’t have to necessarily worry about tariffs, the euro [exchange rate] and various things like that. It’s a balance that it brought us. So yes, it’ll be incremental, it brings a balance to our product portfolio, and we don’t think there’s any overlap at all with those brands.
How are those manufacturer relationships today, considering record demand, low inventory and continued supply-chain issues?
One thing we’ve always practiced is we give our manufacturers a long view of a forecast. We’ll commit to boats for the next year — we’ve always done that. And then, of course, we talk monthly, and we adjust model mix. And not everybody does that. We make a commitment on the full year, so that they can plan and build, and then we communicate weekly. When you do that, when the inventory gets clean, we have those slots available to us, and we don’t necessarily maybe lose a product.
But we also don’t put any pressure on our manufacturers to do anything unfair to another dealer. If we committed to something, we want them to fulfill that. And of course, if they have some extra boats, we’ll take those too. The manufacturer has to be healthy, we have to be healthy, and candidly, other dealers have to be as well. Taking everything from them isn’t great for the industry either.
Last year, MarineMax made several big acquisitions. What are the goals and plans for the marina portfolio?
Ten years ago, we made a real shift to bring in more marinas and storage revenue, whether that’s a lot to store some boats in the winter up north to a high-and-dry rack in Fort Myers to slips in the water, we’ll continue to evaluate those. I would say we’re not highly focused on just going to buy marinas. We’re looking for full-service locations where you can sell fuel, sell boats, service customers, maybe there’s a restaurant. It’s a great place to go.
We might develop some marinas if that’s possible; we may go make an acquisition. We may look at other boat dealers that have that higher-margin storage revenue. It’s still a big part of our business [and] we’ll continue and invest there.
When times are good, you enjoy it, but if times change a little, and they will one day, I want to have a real strong company for our investors. We’ve always prided ourselves that we made it through tough times. If things change again, we want that recurring revenue, those customers [who] are still going to go boating. Maybe some new boats don’t sell as much, but we’ll weather that storm.
Is acquiring marina and storage operations more critical than acquiring boatbuilders to enhance the portfolio?
It’s a balanced approach. We haven’t suddenly changed to a new strategy of buying boatbuilders, by no stretch. Of course, if an opportunity arises and it makes sense for MarineMax — like the Cruisers acquisition made sense — we’ll look at it. But I would say that’s not our thrust. There’s still great boat dealers out there that have marinas that need to become part of the family. We’re going to continue to grow with our brands. If you just look at the growth we can have with our brands that we carry, including Sea Ray and Whaler, and then the other brands you mentioned like Galeon and Cruisers and others, there’s a lot of growth just in and of itself. [And] Aviara, they’re just getting that factory in Florida up to speed.
How about your international footprint? The Northrop & Johnson and Fraser acquisitions suggest a goal of expanding internationally.
There’s not a clear, “OK, we’re going to go do this” [strategy]. I don’t want to call it opportunistic if some opportunities arise. We feel like we can expand the superyacht side of the business by those two companies growing, maybe there’s some additional types of things we can add on to that, maybe there’s another company. We do think there’s growth in that superyacht segment. Our strength with Aquila is in international sales. We’ve set up almost 20 dealers across the world that sell the Aquila product. It’s not [the biggest] part of our business, but it’s impressive how much we sell internationally.
Let’s talk about Boatyard, which was also acquired last year. What should we expect to see?
All our systems and technology have really been on the back end. Then you have the website, which is good for customers to find you and inquire. But Boatyard really was there to create a better customer experience. We said, “What are we trying to solve with our MarineMax app?” Better customer experience, quicker service and simpler, easier communications. Well, Boatyard was doing that well, so we said, “Let’s go get Boatyard to help us with the MarineMax app.”
Boatyard is growing [with] dealers that have signed up to use it as a platform for their customer service communications. We’ll grow it as a piece of a business outside of MarineMax, as a technology company, and it’ll provide technology to MarineMax, mostly on the service side and the customer-experience side. And of course, it will include connectivity information within that: When you pull up your Boatyard app or your MarineMax app, it should talk to you about your boat, and you should be able to get service [and] do other things within that app. Maybe it’s time to renew your insurance. We’ll have that all built into our app.
The company posted record results the past several quarters. How do you keep the momentum going after 2020’s foundational shift and record numbers of new buyers?
We’re very blessed that business is good, and we understand that the demand is record. The neat part that you mentioned is all the new people coming into boating. When we look at everything from our leads that we’re getting on the website, how many of those are brand-new to our database, and it’s kind of hard right out of the gate to determine how new they are to boating. But they’re new to us, and we have a 20-plus-year-old database.
Whenever we get somebody new in, they tell another friend. It just gets exponential. They’re going to probably look to upgrade down the road, because they said, “Geez, now that we understand boating, we want to overnight.” They’re going to upgrade, on average, we know the data, right? Get somebody into boating, and odds are they’re going to buy something else.
How do we keep them there? Service. And it’s the hardest thing to do. Our MarineMax app and Boatyard make it easier for people to get service. We have a saying internally: “Teach me, service me, show me how to have fun.” It’s that last piece that has been the culture and the marketing for our whole company. We call it getaways and events, but get people out on the water and enjoy time. That’s how you keep them into boating.
It sounds maybe a little silly that I would say that, but we are going to service them, we’re going to do our best. And we’ll have some ups and downs, but if we don’t get them out boating and show them where else, then they might say, “Boy, that was a great summer and we had time with the family,” but they’re going to get distracted with other things. If you get them out and you take them to places they haven’t been and they meet other friends, they’re hooked. So, we’re pushing the events and getaways.
Are these new customers looking for something — connected technology, ease of use — that will change how you cater to and approach them?
I’ll always go back to, we’re showing them how to have fun. If we paint that picture in our sales process, they’re going to get into boating. But innovation from these manufacturers definitely helps. Innovation is driving things — joystick docking, the quieter engines, improved safety in boats, all those things.
But I wouldn’t say there’s a massive shift. I think that maybe this go around, people are kind of getting reenergized about boating. It’s easier for them to feel that way now. First, their shopping experience online is better than it was 10 years ago. Their ability to learn about the products, envision themselves, it’s all better. They didn’t have to visit the stores as much. And then when they came in, the products are simpler. They’re very high tech, but those technologies made sense to their family. [The customer] is not going to be worried about docking the boat at the end of the day. So that just made it easier when before, 10, 15 years ago, you were still fighting the uphill battle, boating.
You don’t have to teach the customer to hook up Bluetooth. They’re doing it as you’re sitting there trying to teach them about their new boat. Those things make a difference for people.
Can you discuss the charter business? I’d imagine operations are getting back to normal following a challenging 2020.
Yeah. The team down there [British Virgin Islands] has been through heck. It’s been really tough in that country, but it’s opened back up to a degree. It’s been open for a little while … with certain restrictions [and] I’m hearing it’s going well. We’re just getting a few weeks under our belt, and I’ll get a recap, but it’s open. I’d say starting to trail off the season, right? The summer’s good down there, but with hurricanes, some people, they don’t always plan it. Really when the season kicks in is October, mid-October, and our bookings are full, full, full. It’s people that had to cancel last year, they just rebooked. We saw very little fallout because if you’ve been there, you want to go again.
What are you most excited about for MarineMax? What do you see as the biggest challenges?
I’m excited for our team. We’ve been working hard to get to these levels and the growth that we’ve had — that’s exciting for us and our team. For our customers, the products that are coming out, the brands that we’ve worked hard to develop the right relationships with, we feel we have what everybody needs. The growth can propel us a long way, and we’ll look to grow beyond that. That’s a good feeling to be in that position as a company, that all these relationships, all these brands that are just getting going, the upside is really big.
The challenge for the next year is the demand. Even if demand tapers off a little, the backlog is so robust it’s going to be hard to figure out, “Well, what’s really going on out there?”
Barring outside things we can’t control, it should be good because people are going to upgrade, the used market will continue to be strong, the brokerage market’s strong, our charter business when it opens back up in the Med for Fraser and N&J, that’ll be very strong, and it looks like that’s headed towards an opening. So it’s exciting.
This article was originally published in the July 2021 issue.
