John Ward joined Hatteras Yachts in 2011 as senior vice president of global sales and marketing and was promoted to president and CEO in March 2013. Though he had been at Brunswick Corp. for years, he was retained as Hatteras CEO through Brunswick’s high-profile sale of Hatteras to Philadelphia-based Versa Capital Management.
Ward says Versa has been an ideal partner, investing in the company to create new product and a new way of marketing the boats and showing them in ways that include the major boat shows around the world.
He talks about “experiential marketing,” which allows customers to get onto the boats during less-than-ideal sea conditions to see how they truly handle. Part of that will be through a new sales center that recently opened at Pier Sixty-Six in Fort Lauderdale.
And part of it will be through initiatives such as the Hatterascal (the GT70 is set to debut at the Fort Lauderdale International Boat Show this month) — christened as a combination “Hatteras” and “Rascal” in the mid-1960s; the vessel represented Hatteras at fishing tournaments, boat shows, owners’ rendezvous and special events for more than 40 years.
Prior to Hatteras, Ward was president and CEO of Boston Whaler for five years and president of the MerCruiser division of Mercury Marine for three years. Both are Brunswick-owned companies. He has spent almost 25 years in the marine industry.
Before his Brunswick career, Ward worked in sales management at Canon USA and Texas Instruments. He has a bachelor’s degree in engineering from the University of Mississippi in Oxford.
We asked Ward to talk about the new yachts and what’s ahead for the company.
Q: Hatteras has been making some new investments and realizing the results of some investments made after the acquisition by Versa. I know you have a product debut planned for the Fort Lauderdale International Boat Show. Can you talk about that?
A: We’re really excited about not only the Fort Lauderdale International Boat Show but everything that’s coming to fruition.
The Fort Lauderdale show is going to be a big one for a couple of reasons. One is we’re debuting our new 70 Motor Yacht. It’s been an exciting project for us in a segment that’s done very, very well and has traditionally been an important segment to Hatteras. It is retail-sold, so we’re expecting big things.
I think what’s exciting about it is it follows in the lines of the 100 RPH [Raised Pilot House] as we start to really build and solidify this family of motoryachts, which is something we’ve needed for a long time — a family of products in motoryachts from 60 up to 100 feet.
In addition to the 70 Motor Yacht, we’re also going to debut the new GT70 Hatterascal and we will run a full tour of the Hatterascal in 2016 that will kick off at the Fort Lauderdale show. It’s getting back to grassroots marketing by putting product out in the marketplace and allowing customers to see it and experience it. That marks a renewal of a longstanding tradition at Hatteras, and that’s really exciting.
Those are the two big product debuts in Fort Lauderdale. In addition to that we’ve got some other really exciting things. We’ve got all-new creative that we’ll be launching in Fort Lauderdale. We’ve got an all-new website, which will get partially launched at FLIBS and be fully up after the first of the year. We’ve got our new yacht center at Pier Sixty-Six that will open later this month, which will be a great place to showcase our products and give dealers an opportunity to bring in prospects and customers before or after the major boat shows.
A lot of exciting things are going on. Of course, behind this is more product. Our goal is to bring one to two new products to market each year and try to land those on the major boat shows of Fort Lauderdale and the Miami Yacht & Brokerage Show. There will be a couple of more new-product announcements made at Fort Lauderdale for 2016, which I can’t share with you.
Q: I can hear your enthusiasm, and I can imagine that after a bit of uncertainty, it’s great to have some reinvigorated excitement and funding for Hatteras.
A: Yes, absolutely. I think the drivers of that are we’ve got new owners who are excited about the investment, they’re excited about the brand and they’re excited about everything we’re doing. That can become contagious. We’re trying to share that not only internally, but externally, as well, with customers, dealers and the industry. We’ve gotten the business stabilized in the management team, and in our strategy, and that’s important. We’ve been able to do that because we have a great new owner that’s really investing in the business and in more than just product.
Q: We’ve heard lots of talk of Hatteras, but nothing on Cabo. What’s the plan for that brand?
A: Right now our focus is on the Hatteras brand. We believe the global opportunity for company growth is with the Hatteras brand, so our efforts and investment are focused on that. We are not building any Cabo product and have no immediate plans to bring that product back to market.
Q: How are the new Hatteras products being received?
A: The new products are being received extremely well. You measure product success by how many people buy it. When people like it and buy it, it’s successful. We’re seeing early successes with our new products, led by the 45 Express. That boat’s done extremely well. The new GT70 has done well. Our biggest challenge has been that we haven’t had new product to put into the marketplace.
One of the important things for our brand, like a lot of brands, is that experiential element. You’ve got to get people on your product to see and feel and experience how your product is different from everybody else’s. When you think about Hatteras, everybody knows Hatteras as being a quality product with great seakeeping capabilities.
You can see quality and touch quality, but you have to experience seakeeping capabilities. On nasty days I want to take people out on our GT70 and show them what that product will do when the environment isn’t overly friendly. So we’ve got to do more with that. We think that’s going to help us by giving customers and prospects the opportunity to experience what Hatteras is all about — not just on the convertible side, but on the 45 Express and for the motoryachts, as well. So we’ve got a lot of plans, and we’re making some significant investments in creating this venue in Fort Lauderdale with inventory that customers can come and see and experience.
Q: I know you were also at the Cannes Yachting Festival with a model debut. How did that go?
A: We just came out of the Cannes show, where we debuted the Hatteras 100 Raised Pilothouse Motor Yacht to our European customers. That was very well received. We got great leads, some great prospects, and it kind of reinforces that the Hatteras brand is truly this global, iconic brand. Everywhere you go, the brand is known. We’re selling boats into China, in the Middle East, into Europe, Latin America and of course the United States.
Q: Hatteras just signed a couple of international dealers. I believe one was in Tokyo?
A: Yes, we signed a new dealer in Japan, exactly. We also signed a new dealer in Panama. Earlier in the year or late last year we signed a dealer in the Seychelles. We’re signing dealers. And they’re not dealers in the traditional sense, in that, to become a Hatteras dealer, isn’t about who can buy a boat. Really the focus is finding representation that can sell our product. That’s different.
All it takes is money to buy product. It takes a lot more knowledge and expertise and passion to sell the product than it does to buy the product. We have really shifted gears and are aligning with representation in the marketplace that can sell our product. We’re chasing entities, whether it’s a dealer or broker or representative, in a market anywhere in the world that can represent us and sell our product.
We’ve taken a kind of a little different tack, and it seems to be working well. We’ve aligned with some very successful and powerful dealers and representatives.
Q: Tell me more about what has changed on the creative side.
A: We’ve transitioned our business to a new agency that’s doing all of our creative, so you’re going to see a new look with collateral, which means everything from our catalogs to business cards will reflect our new look.
We will be launching a whole new website and will have all new sales materials and product data sheets. The logo will be simplified by removing the football on the left side.
We’ve taken a different tack on the creative side of things and you’ll start seeing that in some of our materials when we get down to Lauderdale.
And a big part of the marketing side isn’t just those things, it’s this experiential realm that we’re pursuing — getting our product in front of people in the very elementary means, like fishing tournaments, open houses, as well as shows, and in addition to Pier Sixty-Six.
You’re going to see that not just with Hatterascal, but we also have a 70 Motor Yacht demo boat making its debut in Miami, and then it will make the circuit. It will be at Pier Sixty-Six, as well as other venues up and down the East Coast in 2016.
We’ve got to get our product out in front of customers. Not everybody goes to Fort Lauderdale, Miami, Palm Beach or Genoa, Cannes or Singapore. So we’ve got to be able to get the models in front of customers so they can see and experience them.
We’re making a significant investment in our inventory to be able to move it around and put it in different venues, whether it’s a dealer venue, a fishing tournament, another boat show, an open house, a customer event — whatever it is, we’re going to be doing a lot of that. We know that when customers see and feel and touch and experience the brand, we see favorable results.
And the shows remain an important facet of that. Miami, we are going to have a presence on Collins Avenue. We’ll have our new display there with all of our new products. What we see in Lauderdale we will showcase again in Miami, as well as reinforce some product announcements we’ll be making in Fort Lauderdale.
Miami is a great follow-up venue to Lauderdale. And another show that’s becoming a major show for us, and that we’re going to have a significant investment in, is Palm Beach. That’s becoming a really nice show. We went into Palm Beach with a factory display this year, and next year we’ll have both of the 70s on display, along with a 45 and I’m not sure what beyond that. But that’s a really nice event, in addition to Lauderdale and Miami.
Q: You touched on your distribution model. Has it changed much since the sale? Do the dealers that represented Hatteras under Brunswick still carry the brand?
AI think most of them do, yes. We’ve made some tweaks here and there. We’ve added some dealers and representation, not just in the U.S., but globally. But generally, those that were Hatteras dealers when it was owned by Brunswick are generally still today. There hasn’t been a lot of change in that regard from a representation standpoint. We have enhanced some things, we’ve changed out some things, but generally it’s been minimal. And that was done a year and a half ago. We haven’t done anything really recently other than adding dealers where we had some open markets.
Q: And do dealers carry Hatteras inventory? Or are they just built for orders?
A: The way we’re kind of looking at it is, we’ll keep inventory at Pier Sixty-Six, four to six boats, depending on the timing. We’ll have backup or reserve product that’s partially built in New Bern [North Carolina], and then we’ll be building to order for retail sold boats. That’s how the model will work.
And all of our dealers worldwide do have the ability to come to the yacht center and bring clients and prospects and give them an opportunity to see the product, whether it’s a static review or an invitation to join us for a fishing tournament or do a test.
So we’re trying to create that environment, but you’ve got to have the product there. You’ve got to have a great venue and environment, but you have got to have the product there. So we’re making a pretty significant investment not only in the inventory, but also in the venue itself. We’re taking over and creating some offices in Pier Sixty-Six; we are leasing space in the marina to have product there year-round. Outside of the Fort Lauderdale Boat Show, that product will be there at the Bahia Mar year-round.
Q: And I’m assuming that gives you the ability to offer sea trials at the Fort Lauderdale show.
A: Absolutely. That’s going to be one of the neat things coming out of Lauderdale. We’ll have plenty of time for customers to come experience the product. It’s one thing to see the product in a static environment like the boat show; it’s another thing to be able to say, hey, let’s go for a sea trial. And let’s go out when it’s kind of snotty out and see what the boat is like at sea, whether it’s a motoryacht or a convertible. We’re really excited about that. Customers want to have that experience. It’s awfully difficult to sell boats from a drawing or catalogs. We think that’s going to bode well for us.
Q: Private equity buyouts can look a whole variety of different ways. This seems like a good fit, though.
A: Yes, it has been. I think there are two parts of the relationship with Versa that’s exciting. Number one, they believe in the brand, they believe in what Hatteras can be. And second, they continue to invest in it to support our strategy and to drive that. It’s not a one-year turnaround for them. This is a longer-term project for them, which is kind of the nature of their investments. That’s exciting. We’ve made some progress to date. We’ve got a lot to do and lot of heavy lifting in front of us, but I think our strategy is paying off and we’re starting to see some good results.
Q: You’re operating in two pretty different segments, competition-wise.
A: Yes. We’re in the convertible sportfishing segment, and we’ve got great competition there, and that’s good. I love competition. I think it makes everybody stronger and better. With that comes great opportunity. So that segment is great.
And the motoryacht segment is very different — a lot bigger, a lot more players. I think what we can bring to the table is differentiated product. Our motoryacht product isn’t like anybody else’s motoryacht product, and I think we’re able to differentiate ourselves from all of the other players on the motoryacht side. You’ve got to be unique and different than your competition. It’s a little more challenging on the convertible side because the styling differences between all the custom guys and Viking and Hatteras are not all that significant, as compared to motoryachts. Those are wildly different from a styling standpoint.
That’s why you have to drive hard the things that are beyond the profile — performance, seakeeping capabilities, quality. Things that everybody likes to tout. Both segments are significant, and they’re significant globally. A large percentage of our sales are due to international customers.
Q: Speaking of international business, is that harder now, given the strength of the U.S. dollar?
A: We’re battling it like every U.S. manufacturer when you go against the euro and other markets. Europe has been a challenge over the years with the strength of the dollar, but we seem to make up for it in other parts of the world, whether it’s the Middle East or China or other Asian markets.
When you look at our brand and our volumes, we build and sell these things one at a time. Finding one here and finding two there is kind of how we operate. We don’t build 100 boats or 500 boats or 1,000. We’re a much smaller unit standpoint, so the economies can be bad, but when you’re selling to ultra-high-net-worth customers, they still have the money. The challenge is, will they part with it to purchase your product, and that’s always a challenge.
Q: Anything you want to add, any big-picture industry trends? Or anything else?
A: I read everything about the industry. You read these titles about this company being up this percentage, and I think most marine manufacturers and specifically boatbuilders are enjoying robust sales and their businesses are doing well. You’ve got to take advantage of that while things are good, and we’re trying to do that and continuing to stay steadfast with our strategy execution and getting great new products to market because that’s the driver of growth — great new products, great marketing and all the things that support it. I don’t want to talk about the downside. But we’ve all got to think about [how] things won’t just continue to grow and grow and grow. There’s got to be a peak, and we’re going to be on the back side of this at some point in time, so it’s important to do things right now while business is good and prepare yourself for when things get challenging again.
I think as you grow, if you’re smart about growth and you leverage your investment and try to get good leverage on that incremental volume, you’re going to be fine. If you continue to just add a lot of cost, you’re going to have some serious challenges when things get soft.
This article originally appeared in the November 2015 issue.
