Chapter 11 Filing "A Good Thing" for Hunter

Posted by Darrell Nicholson at 03:41PM - Comments: (9)

May 1, 2012

The Hunter 33 has found a niche in the new boat market and is selling well. (Photo courtesy of Hunter Marine)


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. 

Ed Massey cranks down the dinette table for sleeping on the new Hunter 33.

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.”

 

 

Comments (9)

My sister and brother in-law (from australia) bought a top of the range 50 ft hunter in late 2011 and when they went to receive it they had some many warranty and quality problems.

This delayed them many months in sailing.

This is suppossed to be a a premium yacht and has been far from it.

They are still not happy.

The GFC took out the Belgium brand Etap for 2 years ( problems in parent company not he boat yard, the boat yard had 200 order when the parent companies credit line dried up)) and they had owned a 37ft they were super happy with and raced every weekend for 8 years.

3-4 months after they arrived to receive the hunter, etap said they could take orders again. If they had their time over again and the etap and hunter were both available they would not have the hunter.

This was suppossed to be a boat from a premium manufacturer and from they have experienced it has not been. So many basic things were wrong on their boat.

My brother in-law is a true master tradesman, (top 1-2%) and he was surprised by how many things were done.

They bought a fair few options and its not been a good experience for a boat they have spent much more than usd 550k on. Its nowhere as good as the European made Etap 37 they had.

If you make things like this and doing loss of corrections it wont help you cash flow and maybe that's why chapter 11 occured.

Posted by: thomas M | March 7, 2013 8:02 PM    Report this comment

My sister and brother in-law (from australia) bought a top of the range 50 ft hunter in late 2011 and when they went to receive it they had some many warranty and quality problems.

This delayed them many months in sailing.

This is suppossed to be a a premium yacht and has been far from it.

They are still not happy.

The GFC took out the Belgium brand Etap for 2 years ( problems in parent company not he boat yard, the boat yard had 200 order when the parent companies credit line dried up)) and they had owned a 37ft they were super happy with and raced every weekend for 8 years.

3-4 months after they arrived to receive the hunter, etap said they could take orders again. If they had their time over again and the etap and hunter were both available they would not have the hunter.

This was suppossed to be a boat from a premium manufacturer and from they have experienced it has not been. So many basic things were wrong on their boat.

My brother in-law is a true master tradesman, (top 1-2%) and he was surprised by how many things were done.

They bought a fair few options and its not been a good experience for a boat they have spent much more than usd 550k on. Its nowhere as good as the European made Etap 37 they had.

If you make things like this and doing loss of corrections it wont help you cash flow and maybe that's why chapter 11 occured.

Posted by: Unknown | March 7, 2013 8:02 PM    Report this comment

Nice boat!

Posted by: JERRY R | May 5, 2012 2:59 AM    Report this comment

Laura Hershfeld, President of Gemini Catamarans told PS this:

"The reorganization of Hunter should not have any affect on the production of Gemini. I was personally down at the factory on Monday to see the production line and ensure all parts are in stock."

Posted by: DARRELL N | May 3, 2012 1:43 PM    Report this comment

We are now enjoying our third Hunter. I have now been actively sailing for 45 years and couldn't ask for a better boat for my needs. I'm glad the company will be around and continue to be successful. Erich Homolka 2001 Hunter 410

Posted by: Erich H | May 2, 2012 2:26 PM    Report this comment

We are now enjoying our third Hunter. I have now been actively sailing for 45 years and couldn't ask for a better boat for my needs. I'm glad the company will be around and continue to be successful. Erich Homolka 2001 Hunter 410

Posted by: Erich H | May 2, 2012 2:26 PM    Report this comment

Would like to hear what this means for Gemini as Tom above has posted?

Posted by: Jamie B | May 2, 2012 1:15 PM    Report this comment

How will this affect the Gemini catamarans as a subsiderary of Hunter/Luhrs?

Posted by: Tom E | May 2, 2012 12:38 PM    Report this comment

There were many that thought Hunter made a mistake by getting into the power-boat business. And - so they found out. Long live Hunter as the best sailboat maker for the money! Capt Bill Robb on STARGAZER

Posted by: William R | May 2, 2012 10:36 AM    Report this comment


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