In the recently expanded Mayfair, London offices of the Group’s HQ, IBI caught up with Managing Director David Lewis and Sales Director Chris Head, the men spearheading a growth strategy underpinned by three core principles: to expand into new territories; to build on its online brokerage platform (sunseekerbrokerage.com); and with its increasing financial reserves, to control the stock of boats in the supply chain.
“We’ve been running the company very tight since its inception, which has made our cash flow strong, which is quite unusual in our industry,” says Lewis, who has been in the boating business since his late teens, and at 71 years of age, admits he has an eye on succession plans for the business he co-founded with 54-year-old Head in 1993. “We paid deposits a year ago for 2018 stock, at a fixed price and for a fixed delivery slot. We don’t get boats at the wrong time of year, we can control the stock,” he says. Control also extends to the business’s geographic footprint and has become another key driver of growth over the last couple of years.
Sunseeker London Group is now the financial and exclusive distributor for Sunseeker products for the UK and a major part of Europe and Africa, but it is specifically the Mediterranean where it has looked to expand its reach to create what Chris Head refers to as a “seamless solution” for clients. Last year the group took over the Sunseeker dealerships for the Adriatic region and Italy, adding to its already extensive network (see map), as well as opening a new office in Germany. Sharing a showroom in Düsseldorf with luxury German high-performance automotive specialists Brabus (the firm’s director is a Sunseeker fan) – the Group flags up its intent.
“We have a distributor in northern Germany selling 52ft-66ft boats into the Baltic market,” says Lewis, “but our thrust in the country is for clients that are doing their boating in the German strongholds of Mallorca and the Balearics. Düsseldorf is where the real money is in Germany.”
Chris Head expands on the philosophy: “If we sold a boat from the UK and had competition from Spain, we’d have to rely on another company for service and give them commission if the owner was using the boat there. Effectively that dealer would look after them. And the next time they come to buy a boat they’d buy from that dealer and we’d have lost a sale.”
It’s a simple strategy born out of experience, adds Lewis. “When we started in 1993 in London, we were a cold-water dealer – it didn’t work, so we reacted
by taking over France, with offices in La Napoule, Beaulieu, Monaco and Cannes.”
“It’s about offering a seamless opportunity for our clients,” Head concurs. “For instance, if a client is in France and they get fed up with the tax situation there, we can move them to Spain. All our service centers and offices are the same, they’re centralised. The majority of our clients tend to be quite nervous, require a lot of hand-holding. They need to know that if they want a berth somewhere we can provide it, or if their air-con goes down we can get it fixed the next day.”
Having centralised support networks and a team of engineers that go at the drop of a hat to customers Europe-wide has helped reduce service overheads. Dealing with one, rather than a variety of different distributors in an area makes life easier for the yard too, with the continuity of pricing helping to eradicate the thorny issue of discounting. Having a charter operation is also a major boon. “We can provide a route for owners,” Lewis continues. “We can tell them what they could expect as a return on chartering their 86-footer in France or Spain. We can even guarantee weeks of charter to make a sale happen.”
As one might expect, the brokerage side of the business has grown rapidly in step with new boat sales. “60% of our business is return customers, they’re normally trading up after 2-3 years,” says Head. “We take part-exchange at a high level – I’ll take in a 116 and do the deal when they move up to a 131 two years later,” he explains.
The Group’s online portal, Sunseekerbrokerage.com, is home to the biggest collection of Sunseekers on the market, and is a primary driver of new business. “Most of the clients that come through it we’ve never seen before,” claims Head. “We had a gentleman from New York recently enquiring about a 115 on there.” Little wonder that each of its 30-plus offices are contributing to list boats and to have access to sales leads, funds that go into a pot to ensure the site is continually maintained and developed. The Group is now selling approximately 130 used boats a year online.
With boat distribution and dealer networks traditionally fragmented, hostage to varying degrees of service and corporate governance, it’s the professionalisation of the Sunseeker London Group’s business that has been Lewis and Head’s ultimate goal.
“It used to be that one dealer would look entirely different from the other. Now we wear uniforms, the offices carry the same look,” says Lewis. “We have become very departmentalised – that’s to say, proper departments for HR, legal, compliance, nance, marketing, all with their own budgets. We are a corporation.” That said, both men are keenly aware that building relationships with clients is crucial.
“We wear uniforms but you can’t lose the one-to-one relationship – we know more about our clients than their business partners, even their family sometimes,” says Head. Sales sta are encouraged to live the customer lifestyle, to mine the same experiences. Head describes the Group as a “generous” employer, and knows that it must remunerate accordingly sta that need to immerse themselves in the lifestyle of the ultra-wealthy.
If getting close to clients is a prerequisite, as important is a proactive, positive relationship with the yard. Currently Sunseeker London Group is taking around 100 boats a year from Sunseeker and is already paying deposits on 2019 stock. “The reliability of our payments undoubtedly takes the pressure o the builder and helps with their cash flow. We expect them to be joined at the hip with us,” says Lewis. The two firms have monthly meetings where they discuss future trends and new product ideas, generating Excel spreadsheet actions to work on. “It’s not enough to have a good product nowadays,” Lewis comments, reiterating that selling the brand and lifestyle, as well as service and an ongoing commitment to the client, remain vital components.
Both men concede a recurring theme of their monthly meetings with Sunseeker is the need for ever-bigger yachts to satisfy client demand. “The next four 131s in build are ours, that’s a whole year of production,” says Head bullishly. He hints at a larger potential steel/aluminium project in the pipeline. “We’re buying most of the 131 and 116s,” he maintains. “We’re consistently selling three 40m boats a year, now we’re ready for the next step – the 50m-70m, creating an exclusive route to market.” Little wonder then talk of boating the business on the AIM market would give the business the sort of capital injection to allow for even more ambitious growth.
The duo also have their eye on European potential beyond the Med. The Balkans could be one growth area, Head predicts, the key he says, is to be reactive to the market: “You have to act quickly. Do we need a full-serviced office in Romania? Maybe not now, but in a year?” Bulgaria is also gaining traction.
Lewis brandishes a lever arch le containing an inch- thick wad of typed A4 pages. “We get a two-monthly report on all the countries we’re in – wealth analysis, economics, financials, the political situation, news on marina developments, the works,” he says. For instance, Head remarks, they have a dealership in a marina that is only accommodating 50ft-60ft boats. “We’re there, but do we really want to be there? In Turkey there are six new marinas – that amounts to 1,000 berths coming on-stream and we’ll ll 2%-5% of those, so we need to be present.” Poland is also on the radar. “There are so many offices being built there, it’s going to be a central hub in Eastern Europe, I’m convinced of it. We saw several Polish clients in Cannes,” he adds. Ultimately, Head says, “if something’s not right, don’t be afraid to change it.”
Though wholesale finance is not a problem for the firm, an ongoing challenge remains retail financing for clients. “It’s a major issue,” says Head. “No one seems to be offering an international solution. We had a blue-chip foreign client for a £10m boat. He had a deposit of £3m but couldn’t secure the £7m.” Another headwind, says Head, is the shortage of good sales staff, so much so that the sales director envisages one day setting up a Sunseeker London training programme that would guarantee a certain number of top students a job at the end of it.
The greatest challenge, however, is keeping in step with ownership trends as clients get younger. “The 30-year-olds of today are not loyal like the older generation,” rues Lewis. “They buy a Porsche, then a Ferrari, a Jaguar… we have to adapt to that internet world.” The car-buying allusion is fitting, Lewis and Head having been inspired to start Sunseeker London after witnessing the changing car- buying trends of the wealthy in the early ‘nineties.
“Boats take a little longer to sell, that impulsive ‘boat show sale’ is less and less now,” Head admits. “It’s now a process, you have to dangle the carrot a lot longer.”
The reference is timely and draws the interview to a close. Chris Head has an appointment at the house of a client on the hook for one of the larger superyachts. The visit is part social, part information gathering exercise
on the customer’s tastes and lifestyle, details that will no doubt inform the group’s ability to fine-tune its services going forward. David Lewis has lunch in Mayfair, with a Greek shipping magnet. Both men, it seems, live and breathe their craft. It’s a discipline they instill in their sta and their network at large; the soft skills to supplement the business acumen – fundamentals that have propelled the Group to where it is today.
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