Chapter 11 Filing "A Good Thing" for Hunter
Posted by Darrell Nicholson at 03:41PM - Comments: (9)
May 1, 2012
I had a near picture-perfect test sail last Thursday aboard the new Hunter 33 on the Manatee River, just north of our offices in Sarasota, Fla. All in all, the boat was very well behaved in the 12 to 14 knots of breeze, almost ideal conditions for this family coastal cruiser. Little did I know that days later, the parent company of Hunter, one of the cornerstones of production sailboat building in America, would file for Chapter 11 bankruptcy.
So today, I woke up asking myself: Was there something so wrong with these boats? The short answer, is no.
Sure, there were things I didn’t like. The test boat, supplied by Massey Yacht Sales, the local broker for Hunter, Catalina and Island Packet, had an in-mast furling mainsail. I’m not a big fan of in-mast furling, particularly on boats this small, but most Hunter buyers would rather cut off their arm than part with this feature, as it makes great sense for the weekend sailor. Hunter’s backstay-less B&R rig allows for a nice “fathead” mainsail with plenty of roach, so that is an option for stick-in-the-muds like me.
Designer Glenn Henderson has performed some nifty magic with the Hunter 33 performance-wise, as he has with previous Hunter designs. (PS has reviewed more than a dozen different models). Except for a brief period in its history, when Hunter’s Child launched the water-ballasted HC 50, Hunter never seriously set its sights on the performance racing market. Nevertheless, Henderson has managed to eke a nice turn of speed out of some of their newest cruising hulls, some of which offer more creature comforts than my first apartment.
And all the while, Hunter has been trying to recover ground lost to market leader Beneteau, whose dominance in the charterboat market give it an edge in pricing. Of course, both builders also must compete with Catalina Yachts, but Catalina’s brave decision to stick with expensive construction details like a lead keel and a conventional drive train (the new Hunter 33 has an iron keel and a sail-drive) lifts its boats into a slightly higher price category. And then there is Jeanneau, which has been rapidly sneaking up from behind in the U.S. market.
Timing for the Hunter 33 seems prescient. Neither Catalina nor Beneteau have a comparable boat that slides into that size/price slot. According to Hunter’s U.S. Sales Director, Greg Emerson, the company took 66 orders on the boat since it was introduced in October. When Massey told me the price of his boat, under $160,000 fully equipped (until summer only), the boat’s success made perfect sense.
And then the bomb dropped. Three days after stepping off the new Hunter 33 for a test sail, I learned that the Luhrs Marine Group, the parent company for Hunter and three powerboat brands (Luhrs, Mainship, and Silverton), was filing for Chapter 11 bankruptcy in New Jersey. According to the filing, estimated liabilities are between $1 million and $10 million.
How will the filing affect Hunter? In the short term, I expect the brand will suffer a knock on the chin, but no one at Hunter seems concerned that the sailboat-building company is in jeopardy. According to Emerson, Hunter was holding its own while the debts were piled up on the powerboat side. The filing helped Hunter “shed some baggage.”
“They have been weighing us down for quite some time now,” Emerson said. “This restructuring will allow us to finally break free and concentrate on building sailboats.” Emerson said several potential buyers have lined up with offers to buy the company, of which Warren Luhrs is the primary shareholder. Emerson expects the restructuring process to be sorted out by the end of June. “This is a good thing.”
While the powerboat factories in New Jersey shut down in January, Hunter has secured interim financing from Bank of America to keep its factory in St. Augustine, Fla., open. According to Emerson, the new funds are dedicated solely for use by Hunter Marine.
“We have very strong orders and a great dealer network,” he said. “We’re introducing a new model in Annapolis in October and have two more new designs coming out. Now, I’ll be able to do some of the marketing I’ve wanted to do and start getting some market share back.”
As far as customer service and warranty support, Emerson said that nothing has changed. “We’ve got a new spring promotion, and we’re honoring all our warranties.”
In the coming months, we can expect some speculation on prospective buyers. (Warren Luhrs will likely retain a large, if not controlling interest in the company.) Emerson isn’t saying who the buyers might be, except that, “a couple of them would be very good for us . . . and they aren’t the competition.”