A future boating industry Walmart?



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Founded on billiards and best-known for bowling, Brunswick Corp. is a
fast-expanding power in the boating business. From runabouts to cruisers to
$10 million yachts and the engines that power them, the company gained more
than 80 percent of its $5.2 billion in sales last year from boats and marine
engines.

What's really drawing attention lately, though, is Brunswick's aggressive
strategy as it tries to reshape an industry that has seen millions of
boaters quit the pastime since the 1990s.

The 160-year-old company, which didn't get into boating until the ripe age
of 115, has been buying up boat and engine brands and suppliers and trying
to extend its influence to all parts of the business.

In the past year, Brunswick has scooped up seven brands - including such
well-known names as Lund and Sea Pro - to leapfrog Genmar Holdings Inc. as
the world's largest manufacturer of recreational boats. Those acquisitions
followed the 2003 purchases of Land 'N' Sea and Attwood, top marine parts
suppliers.

More deals are envisioned as Brunswick, which makes more than 130,000 boats
a year, barrels ahead with an ambitious strategy it unabashedly calls "Cover
the waterfront."

"What that means is we want to be in engines and boats, we want to be in
related services, we want to be in marina management," Buckley said in an
interview. "We want to be essentially everywhere the consumer is spending
money."

But Brunswick's quest for dominance has perhaps inevitably thrown a scare
into independent builders and suppliers and made many dealers uneasy about
devoting their loyalties to a single company.

The United Marine Manufacturers Association, the largest organization of
independent boat builders, has urged its members to avoid buying the
company's products because "Brunswick intends to put you out of business."
Group president Kent Wooldridge likens the big manufacturer to Wal-Mart with
its growing presence and clout.

"We would have no issue with Brunswick if they would split off their power
(engine) company from their boat company and simply conduct business on a
level playing field," he said.

No one disputes Brunswick is on a roll. After being hurt by the recession
that damped consumer demand from 2000-03, the company outpaced the industry
last year with a 16 percent sales jump, excluding acquisitions. Profits
doubled to $270 million.

The gains came despite the fact the estimated number of 72 million U.S.
boaters is flat compared with 15 years ago and down more than 6 million from
its 1997 peak, according to the National Marine Manufacturers Association.
Sales are now climbing again as boats get bigger and fancier, thanks largely
to affluent baby boomers.

The average boater is 48 with an annual income of $71,000, and the resurgent
economy has helped some afford yachts outfitted with flat-screen plasma TVs
and staterooms. Sales of Hatteras yachts, Brunswick's most luxurious line,
soared at boat shows this winter.

http://www.mercurynews.com/mld/mercu...s/11052663.htm

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