A trip to Sam's Club usually involves picking up 10 pounds of hamburger, a large bag of bell peppers, a gallon of olive oil and a few pair of jeans. But soon, Sam's customers may have a new buying opportunity as they troll down the big-box aisles–a chance to buy a boat from Genmar, the maker of Carver, Four Winns, Scarab and 10 other brands.
Earlier this month, Genmar's founder and chief executive, Irwin Jacob, told reporters gathered at the Fort Lauderdale International Boat Show that he is working to finalize a deal with Sam's Club that would allow the Wal-Mart division to market all of his company's boat brands. Jacob said the effort would target a relatively untapped market: People who don't currently own boats.
Sam's ClubSam's Club may sell Genmar boats if the deal goes through.
The arrangement would represent a radical departure for recreational boating manufacturers, who are increasingly desperate to counter the economic slowdown of the past two years. According to Jacob, the market segment represented by entry-level boats–all the way up to 30-foot cruisers–is shrinking. As a result, the dealer inventory and delivery pipelines are going through what he called "a purging process," with production having slowed and aggressive sales tactics in place at the retail level.
Jacob talked candidly, criticizing his industry for its incestuous marketing practices, which he said are contributing to falling boat sales among first-time owners. "We don't market to people" who aren't already boaters, Jacob said.
While it is unclear how consumers will react to the proposition of buying an expensive, high-quality boat from a "big box" chain, the result could be cost savings, at least in the deal's initial stages.
Under the proposed plan, Sam's Club would do the marketing in its 580 nationwide stores for Genmar-brand boats, with the final sales agreements finalized by local Genmar dealers, Jacob said. The carrot for Sam's Club customers is a 1 percent rebate of the final purchase price of the boat they buy. Jacob said the program would likely be rolled out in steps, as early as late this year, in several of "test markets" like Florida and Texas.
A spokesman for Genmar said that the agreement with Sam's Club was still in the finalization process and that officials would not comment on any additional details until the deal was complete.
During his press conference, Jacob said manufacturers have to make a much more substantial commitment to the service end of the business if they want to retain their customer base. He decried the lack of trained and experienced mechanics and said it is at the heart of existing service problem in the recreational boating industry.
GenmarGenmar's Seaswirl 2901 Walkaround
Jacob proposed a mechanics university, sponsored by the industry, to train service and support personnel. New, high-tech boat systems and power plants require more sophisticated training for service employees and Jacob's said the industry itself has to make the commitment to creating training opportunities.
Genmar Holdings, Inc. includes 13 well-known boat brands, from Marquis and Carver luxury cruisers to Seaswirl fishing boats and Ranger bass boats. Genmar officials maintain that the tournament fish boat business remains strong, in contrast to many other industry segments. The company's chief executive attributes that to the huge marketing investment Genmar makes in that segment. It's the Ranger bass boat brand that is the cornerstone of that marketing push–highlighted in the 240 fishing tournaments the company has sponsored or co-sponsored, with contest payouts of more than $45 million. Ranger currently makes 37 different models, ranging from 17-feet to 25-feet. Prices start at $15,000 and reach all the way to almost $60,000 for a top-of-the-line model.
At the top of the Genmar brand list is Marquis, which was spunoff from the upper end of the Carver line in 2003, and incorporates sleek new forms from the Italian naval design firm of Nuvolari-Lenard. It offers five models, ranging from a new Volvo-Penta IPS-powered 40 footer, to the current queen of the line, the Marquis 65, which offers room for six overnight guests in three staterooms and a hull that measures nearly 70 feet overall and weighs almost 95,000 pounds.
GenmarGenmar's Ranger Bass 188vs
The Marquis brand has been particularly successful for Genmar and is strong overseas, where the weak dollar has boosted the international sales of many boat builders. Some manufacturers are seeing international sales increases this year, as much as 15 percent over the same time last year.
Genmar's other brands include Triumph, Hydra-Sports, Champion, Stratos, Larson, Wellcraft (including Scarab), Windsor Craft, Glastron and Four Winns. Genmar also has a transportation division, Genmar Transportation, which brings raw materials to the factories and handles all boat deliveries to dealers.
There are approximately 1200 Genmar-brand dealerships in North America and another 200 international dealers in more than 40 countries. The company has approximately 5,000 employees in nine manufacturing centers, and its annual sales are reportedly more than $1 billion. As a private company, its earnings are not reported publically.