Interview - Man on a Mission
When Riviera officially announced on March 8 that a sale had been completed, allowing the company to officially exit receivership and move forward under private ownership, the news ended nearly four years of speculation, rumour and uncertainty for the iconic Australian boatyard.
The company entered Voluntary Administration on May 8, 2009, at the height of the GFC, one of the greatest periods of economic instability in living memory. It has operated continuously since then, first in Administration and later in Receivership building 20 different models from 36 to 75 feet. Riviera currently builds around 70 boats per year, 30 per cent of which are exported, a testament to the brand and to the people who have kept the organisation together, essentially as it was when it was first sold to private equity group Gresham, in 2003.
LONGHURST DREAM
Queensland-based investment company Longhurst Marine Holdings Pty Ltd, run by Rodney Longhurst, (son of Dreamworld creator John Longhurst), has purchased the Riviera assets, work in progress and associated companies for an undisclosed amount. Three-hundred-and-forty of the nearly 450 staff and contractors have been retained and the company has entered into a long-term lease of Riviera’s 14-hectare state-of-the-art manufacturing facility at Coomera, with an option to purchase the site.
Wes Moxey returns to Riviera as CEO, a role he relinquished in 2008 after 26 years with the organisation. Moxey has, since leaving Riviera, established Belize Motor Yachts, which will now be offered through the Riviera network of 46 dealers in Australia and 66 countries around the world. Stephen Milne has been appointed Director of Brand and Sales. He was previously Riviera’s Director of Brand and Communications for the past nine years.
I spoke at length to both Wes Moxey and Stephen Milne on the first day of operation of the new Riviera. We discussed how the deal came about, their thoughts about where Riviera is at, what needs to be done and the vision going forward.
GETTING SERIOUS
Moxey, a long-time business associate of Rodney Longhurst, told me that while he and Longhurst had been discussing the purchase for a while, it was only at a meeting in late February that they decided to “get serious” and from there things moved quickly.
On Friday, March 2 an offer was made to the receivers and was accepted the next day. Contracts were prepared and signed at 4am on Tuesday, March 6 and settled the following Thursday. The whole process, from the time they decided to seriously engage to the time the deal was done, took nine days. Doing the deal quickly in this type of business is an important factor, due to the implications of work in progress, which is dynamic and can change dramatically in a matter of days.
Longhurst Marine Holdings and the Longhurst family have a long history in the marine industry, with an involvement in boatbuilding and as owners of The Boat Works (formerly the Gold Coast Marine Centre). Interestingly, the Longhurst group had also been in talks about purchasing Riviera in 1999 and again in 2002 prior to the company being sold the first time.
BRAND POWER
Rodney Longhurst said the inherent strength of Riviera in the face of recent global market forces was the key factor that drew his interest in acquiring the business.
“I have watched how the Riviera luxury boat brand has so emphatically endured the last four years of turbulent economic conditions,” said Longhurst.
“For the past two years and nine months the company has operated in receivership and during this period, local and international competition has also been particularly fierce.
“Yet throughout this unprecedented cycle, the Riviera brand has retained its integrity and has defied industry trends achieving significant results with new model releases and sales.
“The very strong loyalty that Riviera owners feel toward their boat and the company is truly to be admired. This culture cannot be created overnight and is the sum total of many contributing factors over the past 32 years.
“World-leading design, superior quality, technology innovation and a belief that Riviera owners are part of a family, not mere clients of the company, are some of the unique values that attracted me to Riviera,” Longhurst said.
That brand loyalty was highlighted in 2009, when Riviera announced it was going into Voluntary Administration. The company was inundated with calls, emails and letters from customers wishing them well. It was a great sentiment that turned into the “I Love Riv” marketing campaign at the Sanctuary Cove International Boat Show that year. The result was a staggering eight boats sold at the show by an organisation in administration, at the height of the GFC. Stephen Milne told me that when the recent sale was announced the company again received a deluge of positive emails from customers.
BOAT SHOWS
Riviera will display three models at Sanctuary Cove International Boat Show this year, the 5800 Sport Yacht, 5000 Sport Yacht and 43 Open Flybridge. Concurrently, Riviera will be conducting a four-day Riviera Festival at its 14-hectare site at Coomera. Plans for the Festival include a 17-boat display, including the world release of the Riviera 75 and a large number of Riviera brokerage boats ranging from $100,000 to $6.5m. There will be factory tours and 71 educational and social events over the four days of the festival that visitors can register for.
I asked Wes Moxey about his initial focus and he responded emphatically and passionately telling me that his first priority was to get the business back to profitability in what is still a tough market. “I can’t control the market, but I can control, the workforce, the quality of the product and the type of product coming down the line,” he says. “I can also offer better service and customer support than anyone else in the industry and that’s not just my focus, that’s from the whole team.”
In his view, good boats start with good design and Riviera has some of the best designers. The end result needs to be top quality and that’s not an issue, but in between, the boats need to be “buildable”. Moxey added that lately Riviera has built some really good boats that customers love and are selling well in a difficult market, but sometimes they’re not easy to build. What’s been missing are the “boatbuilding hands alongside the design hands to produce that sum balance”.
“Riviera has, up until the last four years had a boatbuilder at the top, first it was Bill (Rivera founder, Bill Barry-Cotter) and then me, but always a boatbuilder who made the ultimate call as to how it’s built,” Moxey explained.
As Riviera became more corporate, Moxey admitted some of that boatbuilding ethos was diluted and watered down. He thinks it’s paramount that when you’re building a premium product like Riviera, with high-quality and lots of high-technology, it’s imperative you have a boatbuilder in control.
“You have to be able to build in a repeatable quality and you still have to be able to make money, otherwise you’re no longer here,” Moxey told Trade-a-Boat.
That’s the vision, he continues, “to get back to the basics of ensuring the products we are focused on and building are coming down the line on time, on cost, at a consistent quality, and it’s sustainable.” Moxey says this was the reason why he appointed Chris Gilfoyle, an experienced boatbuilder at Riviera for 20 years, as Head of Manufacturing.
THE FUTURE
On the question of: Will we see changes to the type of boats coming out of Riviera now? Moxey says no, he feels the guys have done a good job coming out with some “radical stuff”, the new 43 and 53 flybridge boats along with the 5800 Sport Yacht have all sold really well. “They’re good products that tick all the boxes — full-width master, enclosed flybridge, internal staircase, nice cockpit, aft galley, connection between the two, joystick control, easy docking, good fuel economy, long range, it’s just tick, tick, tick, that’s what Australians want,” he said.
Stephen Milne said that between 30 and 35 per cent of all boats Riviera currently builds are exported, and, as the US market recovers, that number will grow. “You go somewhere like the (recently held) Miami Boat Show and Riviera sits proudly alongside all the major brands from around the world,” adds Milne. At the Miami show in February, Riviera sold six boats totalling $US10.4m, which helped the company achieve a six-month sales record for the month of February with the sale of 12 new boats.
In the better times Riviera was building more than 420 boats per year, with almost half of those exported. I asked Moxey if, in trying to increase sales, he was targeting any particular market. “Our priority is Australia and New Zealand; after all, we are an Aussie company and our home market is near and dear to us, so looking after the home market is number one,” he replied.
“Number two is that we are certainly seeing a recovery in the US, which has been a great market for us even though the USD is not favouring us at the moment. But that will change and we’ve invested much time, effort and money in the Riviera brand so we don’t want to desert that market just because things got a bit tough with the dollar,” Moxey said.
Europe is another region that Riviera has made inroads. While I was at the factory there was a Riviera 45 in the final stages of preparation to be exported there.
SABBATICAL RECHARGE
Throughout our discussion, the quietly spoken Moxey seemed relaxed, but obviously a man on a mission. Purposeful, passionate and enthusiastic, he told me that personally it had been good to step away for nearly four years, hard as that was. He said it gave him an opportunity to reflect and refresh and extend his career.
Moxey admitted that after 26 years, “you get a bit beaten up and tired.” Going to Asia during the development of the Belize also educated him on the positives and negatives of Asia and “how we can use that to make our future better,” he added.
“Focused back here, we live in the best country in the world; we have a great facility, a great work force, a great product and a wonderful brand,” he continues. “All we need to do is continue to do what we do best.”
Over the years Riviera has sold a total of 4956 boats, which means it has this incredible pool of feeder boats that get people into the brand, and as the lives and fortunes of owners progress, this is the core population that buy new Rivieras. They have a strong dealer network, set-up in some of the best locations and Riviera maintains a stake in all its dealers, which means they’re factory backed.
“I think we can do an even better job going forward than we did in the past, being wiser for the experience.” said Moxey. And his final words as we parted? “Watch this space.”
Footnote: Since the sale of Riviera, the company has taken orders for 10 new boats as of March 30. A remarkable achievement!
Top photo: Wes Moxey.
Friday, March 9, 2012. A day to remember for the Riviera team. Front row (L-R): Stephen Milne, Wes Moxey and Rodney Longhurst.
From Trade-a-Boat Issue 427, May-June, 2012.