The bankruptcy filing of Redmond-based Olympic Boat Centers underscores the problems rocking the world of pleasure-boat retailers and manufacturers.
Look out at Lake Union or Lake Washington on any reasonably sunny day, and you can see dozens of boats zipping through the water.
Boats — building them, working on them, relaxing on them and trading them — are woven deep in the Puget Sound region’s social fabric. But the busy maritime social scene doesn’t reflect the boating industry’s troubled state.
“It’s very challenging out there,” said Michael Campbell, president of the Northwest Marine Trade Association, which organizes the annual Seattle Boat Show. “Many of our dealers are in a position where they really need to move merchandise, so it’s an incredibly great time to buy a boat.”
The boat industry’s woes were spotlighted by last week’s bankruptcy-reorganization filing by the parent company of Redmond-based Olympic Boat Centers, one of the largest boat dealers on the West Coast, and several of its affiliates.
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Rik Tokuno, Olympic’s chief executive, said he would issue a public statement today on the Chapter 11 filing. The filing, which enables the company to stay in business while it negotiates with its creditors, said the assets of parent company OBC Holdings are between $10 million and $50 million, while its debts are between $50 million and $100 million.
But whatever the specific circumstances of Olympic’s situation — one employee, who declined to give his name for publication, claimed management expanded the company too fast and failed to close underperforming stores — it’s clear that locally and nationally, this is not a good time to be in the business of selling pleasure boats.
The soaring price of gasoline and diesel fuel has made it more expensive to take a boat out for a cruise, while the deflated housing market and wobbly job picture has sapped demand for new boats.
Even Campbell, who said boating is “a very important part of who I am and how I define myself,” conceded that a boat is “a discretionary item — it’s not like oxygen and water and food.”
Brunswick, arguably the world’s largest maker of pleasurecraft, said last month it would close four more manufacturing plants by the end of 2009, on top of the eight it had already closed or identified for closing.
The company, headquartered outside Chicago, had 29 plants as of the end of 2007; the only one in Washington state, in Arlington, builds Meridian yachts and does research, development and marketing work for Bayliner boats.
Dan Kubera, a Brunswick spokesman, said the company hasn’t yet identified whether the Arlington factory will be among the ones closed. However, that plant — along with most of the rest of Brunswick’s fiberglass-boat business — will go on furlough for the month of August in an effort to clear out the pipeline of unsold boats.
“Consumers are being very cautious with their spending, and with good reason,” Kubera said. “They have an awful lot of economic pressures biting at their wallets.”
The decline is accelerating, according to the National Marine Manufacturers Association. New powerboat sales were down 6.9 percent last year compared with 2006; in the first quarter of this year, sales were estimated to be 20 percent below the same quarter last year.
Closer to home, fewer Washington state boaters appear to be taking out licenses for their craft. According to the state Department of Licensing, so far this year 234,029 boating licenses have been issued; for all of last year, 272,737 licenses were issued.
Olympic Boat Centers was founded in 1955. Its Web site lists 18 retail locations on the West Coast, from Nanaimo, B.C., in the north to San Diego in the south.
The company is majority owned by The Riverside Co., a Cleveland-based private-equity firm, and according to the bankruptcy filing Brunswick owns a 12 percent stake. Riverside bought Olympic in 1998.
Last year, Olympic agreed to settle a class-action suit brought in state court in Orange County, Calif. The suit alleged that Olympic didn’t pay its salespeople overtime and was not paying sales commissions properly; Olympic did not admit any wrongdoing but agreed to pay $833,000 to settle the suit.
Drew DeSilver: 206-464-3145 or firstname.lastname@example.org