Brunswick Sells Sea Ray Boats

Brunswick Corporation, one of the largest boat engine makers in the US, acquired Ray Industries, a leading maker of fibreglass pleasure boats, for $350 million in 1986. In 2017, Brunswick announced it would sell its Sea Ray brand of boats, but in 2018, the company decided not to sell and instead focus on reinventing the brand. Brunswick will discontinue its Florida-built yachts and close those facilities, while retaining and revitalising the Sea Ray brand to focus on sport boats and cruisers.

Brunswick Corp. announced it will retain the Sea Ray brand

Brunswick Corp. has announced that it will retain the Sea Ray brand, reversing its previous decision to sell the boatmaker. In late June 2018, Brunswick stated that it would take Sea Ray off the market as the offers received failed to reflect the appropriate value of the brand. The company plans to reinvent Sea Ray by discontinuing its yacht and sport yacht segments and instead emphasizing outboard-powered models ranging from 24 to 40 feet.

The decision to retain the brand came after a thorough sale process that aimed to generate the highest value for shareholders. Although there was interest in the business, Brunswick Chairman and CEO Mark Schwabero stated that the offers did not meet their expectations. The weak financial performance of the yacht product category was cited as a reason for the lower value of the brand. By retaining Sea Ray, Brunswick aims to maximize value by refocusing on sport boats and cruisers.

The company will wind down yacht production, resulting in the closure of its Palm Coast factory in Florida and impacting up to 825 jobs. The Sykes Creek site in Florida will remain operational to support customer service, warranty obligations, and other operational requirements. Sea Ray's engineering facility will be combined with the Boston Whaler engineering location, now called the Brunswick Fiberglass Boat Technology Center, where Sea Ray product development will continue.

Sea Ray, founded in 1959, was acquired by Brunswick in 1986 for $350 million. At the time, Sea Ray sold 28,000 boats annually and had annual sales of approximately $400 million. However, in recent years, Sea Ray's sales have declined, selling only about a tenth of their peak sales. The brand has also faced challenges with quality issues, competition, and the impact of the Great Recession in 2008.

Despite these difficulties, Brunswick's decision to retain the Sea Ray brand has been supported by analysts and industry players. MarineMax, the largest retailer of Sea Ray boats, expressed disappointment in the discontinuation of sport yachts and yachts but excitement for the future focus on sport boats and cruisers. Sea Ray remains a premium and aspirational brand in the recreational boat market, and Brunswick's commitment to revitalizing the brand is expected to leverage growth opportunities in the sport boat and cruiser product categories.

Sea Ray's Florida-built yachts will be discontinued

Sea Ray Boats is an American manufacturer of recreational motorboats, operating as part of the Brunswick Boat Group, a division of Brunswick Corporation. Brunswick has decided to discontinue Sea Ray's Florida-built yachts, closing its Palm Coast and Sykes Creek factories in Florida. This decision was made after the company's attempt to sell the Sea Ray brand fell through as the offers did not reflect the "appropriate value" for the premium brand.

The Decision to Discontinue

In 2017, Brunswick Corporation, which has owned Sea Ray since 1986, announced its intention to sell the Sea Ray brand. However, in June 2018, Brunswick reversed its decision and stated that it would retain and reinvent the Sea Ray brand. The company's chairman and CEO, Mark Schwabero, explained that the offers received during the sale process did not meet their expectations for the premium brand. He attributed the lower value to the weak financial performance of the yacht product category. As a result, Brunswick decided to focus on the sport boat and cruiser product portfolio, discontinuing the yacht and sport yacht models.

Impact on Operations and Jobs

The discontinuation of the Florida-built yachts will result in the closure of Sea Ray's Palm Coast facility in Flagler Beach, Florida, and the partial closure of its Sykes Creek plant on Merritt Island, Florida. The Sykes Creek site will continue to operate to handle customer service, warranty obligations, and other operational requirements. The closures will result in the loss of approximately 825 jobs, with net cash expenditures to institute these actions estimated between $10 million and $20 million.

Future Focus

Sea Ray will increase its emphasis on outboard-powered boats under 40 feet. The company's Tennessee plant, which produces Sea Rays between 24 and 40 feet, will continue to operate, with plans to simplify the business. Brunswick's decision to retain and reinvent the Sea Ray brand is expected to create a revitalized brand that complements its existing portfolio. The company will continue to pursue acquisition targets in the boat business while concentrating its primary efforts on expanding its parts and accessories business.

Sea Ray will focus on sport boats and cruisers

Sea Ray's sport yacht and yacht division has struggled financially, which has complicated and obscured the value of the rest of the brand. By discontinuing these operations, Brunswick aims to "maximize value" and refocus Sea Ray on its sport boat and cruiser product portfolio. This transformation is expected to create a revitalized Sea Ray, benefiting from synergies with the company's broader marine portfolio and targeted ongoing investments.

Sea Ray's sport boats are designed to offer an exciting and stylish experience for families, with every detail delivering the ultimate in performance and fun. The company's SDX® and SLX® family of luxury boats insist on extraordinary, providing an idyllic boating experience. Sea Ray's commitment to craftsmanship and performance has made it a leading creator of superior-quality pleasure boats for 60 years.

The decision to retain and reinvent the Sea Ray brand is a strategic shift for Brunswick, which initially believed that selling the business would generate the highest value for shareholders. However, the offers received did not reflect the appropriate value for the premium brand. By retaining Sea Ray and focusing on its sport boat and cruiser offerings, Brunswick aims to capitalize on growth opportunities in these product categories.

The discontinuation of Sea Ray's yacht and sport yacht segments will result in the loss of 825 jobs

In 2018, Brunswick Corp. announced that it would be discontinuing Sea Ray's yacht and sport yacht segments. This decision was made after the company's attempts to sell the Sea Ray brand fell through, with offers failing to reflect the "appropriate value" of the business. Instead, Brunswick decided to reinvent Sea Ray by discontinuing the yacht and sport yacht segments and focusing on outboard-powered models from 24 to 40 feet.

As a result of this decision, Brunswick expected the loss of approximately 825 jobs. The company planned to close its Palm Coast facility in Florida as soon as possible in 2018, while a portion of its Sykes Creek facility on Merritt Island would remain operational to support customer service, warranty obligations, and other operational requirements.

The discontinuation of the yacht and sport yacht segments was a disappointment to MarineMax, the largest retailer of Sea Ray boats, as they historically represented over 50% of Sea Ray's worldwide sales. However, MarineMax expressed optimism for the future of Sea Ray's focus on sport boats and cruisers.

The job losses at Sea Ray added to the economic woes of the local community in Flagler County, Florida, where the loss of the Sea Ray Boats manufacturing plant resulted in the loss of approximately 475 jobs. Local officials quickly organized a job fair for displaced Sea Ray employees, and about 70 employees from the Flagler plant were offered positions at Brunswick's Boston Whaler boat plant in Edgewater.

The closure of the Sea Ray plant on Merritt Island also resulted in the loss of about 200 jobs, further impacting the local economy. Despite the job losses, some facilities remained operational, including a product development center and a customer support center.

The Sykes Creek site will remain open to handle customer service and warranty issues

Brunswick Corporation, one of the largest boat engine makers in the US, acquired Ray Industries, a leading maker of fibreglass pleasure boats, in 1986. Ray Industries, based in Knoxville, Tennessee, was subsequently renamed Sea Ray and became a subsidiary of Brunswick.

In December 2017, Brunswick announced its intention to sell Sea Ray, along with several facilities, including its Palm Coast factory in Flagler Beach, Florida, and its Sykes Creek plant and Product Development & Engineering facility on Merritt Island, Florida. However, in June 2018, Brunswick reversed its decision and announced that it would retain and reinvent the Sea Ray brand, discontinuing its yacht production and emphasising sport boats and cruisers.

As part of this transformation, Brunswick closed its Palm Coast plant and most of the Merritt Island facility, resulting in the loss of around 825 jobs. However, a portion of the Sykes Creek site remains operational to handle customer service, warranty issues, and other operational requirements.

The Sykes Creek plant, established in 1990, has a long history of manufacturing yachts, producing over 2,000 yachts during its 28 years of production. Today, the plant, recently renamed the Brunswick Integrated Manufacturing Center, continues to play a crucial role in Brunswick's operations by manufacturing the Sea Ray Sundancer 350 and Sea Ray SLX 400 Outboard, as well as providing multiple manufacturing services for Brunswick brands.

By keeping the Sykes Creek site open, Brunswick demonstrates its commitment to providing ongoing support and service to Sea Ray dealers and customers, ensuring that the brand remains accessible and reliable for its customers. This decision aligns with Brunswick's strategy to revitalise the Sea Ray brand and capitalise on growth opportunities in the sport boat and cruiser product categories.

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