Back in early 2010, after a few grueling years of trying to get business out of the hole and back up on plane, Legendary Marine had encouraging news to report: The Destin, Fla.-based sales and service company had reduced its inventory of new boats to $6.5 million from the $20 million it started with in early 2009, and only one boat, worth less than $120,000, was over a year old.
It was an impressive accomplishment, particularly during a period when most dealers had pulled out every last strand of hair just trying to develop clear goals for inventory. The company was ready to throttle ahead and hoped to put its recession-related worries in its wake. But a few months later, the BP oil spill in the Gulf of Mexico terrorized businesses along the Panhandle, including all four of Legendary’s locations.
“We were in the cross hairs of that spill, and it hurt us a great deal,” says Fred Pace, managing partner at Legendary. “That, coupled with the recession and the hurricanes we’d seen in this area a few years before, got us wondering if maybe someone was just picking on us.”
Although confronted with incredible obstacles, Legendary also entered the boat rental business in late May with the launch of MidBay Powerboat Rentals. Instead, the company spent this past year developing new strategies to bolster its bottom line and foster growth in the future. To wit: Legendary has enhanced its existing profit centers and expanded into new, revenue-generating businesses. As a result, Legendary continues to prove itself as one of the most resilient players in the marine industry.
The valley theory
At the core of the recent business decisions was the goal to level out what Pace calls “the valleys” in Legendary’s operations. “By that I mean those mornings when you come to work and the phone isn’t ringing,” he explains.
Legendary’s locations (Destin, Panama City, Fort Walton Beach, Fla., Gulf Shores, Ala. and Atlanta) are in temperate areas, but the winters are cool, so business is seasonal.
To put the profit-raising props in motion, one of the things Legendary did in the fall of 2010 was sign on as a “premier demonstration dealer” for Four Winns. As such, Legendary’s Destin location became a place where dealers of the Four Winns cruiser line could send prospects for on-the-water demonstrations with a product specialist. With Legendary as a partner, Four Winns was able to ease floor-planning challenges for its dealers and reduce the need for these businesses to stock a lot of boat models.
“The current marine environment dictates a new business model for the sale of new boats and Four Winns stepped up to the challenge,” says Pace. “We have the facilities and resources needed to sell boats year-round, and although another Four Winns dealer may be credited with the sale, we participate in delivering a positive experience for customers. The program has yet to develop the horsepower we hope to see, but it’s a great one, and I think it will gain traction as the industry comes out of recession.”
This past spring, Legendary made another tactical decision: to launch a new high-performance division for the service, repair and repower of fast boats. The performance boat market isn’t foreign territory to this company. Legendary sold the Fountain brand early on, although it let the business go after Fountain filed for bankruptcy. Legendary was acquainted with these unique customers, many of whom kept their boats in the dealer’s stowage barn.
“Although the high-performance market is smaller today, the boat owners who are out there are an avid group who love to be on the water,” says Pace.
Realizing potential for additional revenue beyond boat sales, Legendary hired two industry race veterans to lead the new venture, Scott Childs and Jeff Hopper. Former employees of Mercury Racing who earned their full-throttle stripes in the proving grounds of Lake X and the X-Site in Panama City, the men brought strong credentials in high-performance service and racing to the new division. They also had a number of loyal customers. According to Pace, the team brought new business to Legendary within 45 days of their hiring.
“We’ve serviced boats that were brought to us from as far away as Texas. The reputations of Scott and Jeff have helped us make huge inroads to a market we had not previously pursued,” he explains.
This type of venture was a good fit for Legendary for a number of reasons, including the fact that it further reduced the company’s dependence on new boat sales.
So did Legendary’s decision to get more involved in the business of managing distressed marinas.
Years ago, Legendary was approached by a few banks in need of a reputable company to manage challenged properties, but at the time, it just wasn’t a good fit. “We didn’t have the right people in place to oversee this type of business the way we feel it needs to be done. But after it seemed as if we had weathered the worst of recessionary storm, we saw this as an opportunity we wanted to pursue,” says Pace.
Legendary now manages three marinas and is close to finalizing agreements to manage two more. In addition, the company recently hired Pam Lendzion, a 30-year marine industry veteran, to oversee the division and accelerate its growth.
“We’ll never be a big marina management company because we want to focus on what we do best, which is service and stowage,” says Pace. “But this does give us an opportunity to expand our brand.”
Legendary also entered the boat rental business in late May with the launch of MidBay Powerboat Rentals.
Stimulating boat sales
Although establishing new profit centers has been a top priority in the past year, Legendary has also made strides to remain competitive on the sales front. Early in 2011, the company hired John Lane as a full-time sales trainer. The importance of sales training has never been lost on Legendary, or Pace for that matter, who spent eight years in the auto business running GM Cadillac dealerships. But when cash flow got tight in 2008, the company was forced to reduce expenses, and training was one of the line items struck from the budget.
“We know it’s critical to our success,” Pace says. “And John brings a nice twist to the sales process. He works hard to help customers see the fun in boating. “
That skill is particularly important today, as buyers seem to have more reasons to delay a purchase. It’s also an advantage with first-time buyers, who seem more prevalent these days.
“We’re encouraged by the increase in sales in the 18- to 26-foot range,” says Pace. “These newcomers are taking the plunge, so we work hard to help them feel comfortable with their boat. The orientation we offer them is similar to what we do with a yacht.”
Lane wasn’t the only new addition in early 2011. As part of Legendary Marine’s effort to stimulate sales, Wanda Kenton Smith of Kenton Smith Marketing in Orlando, Fla., was enlisted to serve as the dealership’s in-house director of marketing, overseeing marketing for the company’s four dealership locations and serving as marketing liaison to all of Legendary’s marine brands, vendors, and the regional media market.
As these new developments begin to take effect, Pace looks to the future with one very pressing goal. “I want to know that our  employees feel more secure, and I want to know that the management team and I have done our best to make their future bright.”