Fountain Powerboats Moving Forward
Despite the forever-changed market for go-fast boats, the iconic brand is still in the game.
June 29, 2014
In its heyday under company founder/industry icon Reggie Fountain, Fountain Powerboats built more than 300 boats a year between its sportboat and center-console offerings. This year, with its founder long gone and the Fountain brand under the same Baja Marine umbrella that covers Baja, Donzi, and Pro-Line, the Washington, N.C., boat builder will be lucky to produce 30 new Fountain models.
Though Fountain made its name on sportboats such as the 47’ Lightning above, center-consoles are leading the brand’s sales.
And most of those will be center-consoles, as sales of go-fast sportboats—the market segment on which Fountain built its considerable reputation—have dwindled.
That Fountain will be fortunate to build 10 percent of what it once did is not a dig on the company or its current management and owner. Far from it. The brand is still alive, a significant accomplishment given the economic beat-down of the past seven years, and is making moves to rebuild its market share.
But go-fast boat sales have declined dramatically across the board since 2006. As a price-point “production” brand—as opposed to a custom brand—that buyers frequently used home equity loans to finance, Fountain and its Baja and Donzi siblings were particularly vulnerable when the sub-prime housing market collapsed and banks tightened the reins on lending for such purchases to the point of stranglehold. The custom go-fast market certainly took a big hit, but that market had always been supported by buyers who didn’t need loans to buy their boats. The recession, combined with the lack of funding for production-built models, all but crushed the production side.
So in no small way, Fountain deserves a lot credit for simply surviving. The company is far from home free, but it has made moves to help ensure its long-term sustainability in a market that is beginning to make a painfully slow comeback. The most significant of these steps is that now all Fountain—and larger Donzi—models are being sold factory-direct. While the move certainly eliminates the complications and costs of rebuilding a dealer network (one that all but dried up during the recession), Johnny Walker, chief executive officer of Baja Marine, said it also gives Fountain an opportunity to better serve its boat-buying customers.
“That Fountain or Donzi customer, who could be spending as much as $500,000 for a boat, really wants to have a close relationship with the manufacturer,” said Walker “They want to come to the plant to see the boat being built. They want to talk to the builder about everything going into it.
"We will allow a certain amount of brokerage, so to speak, for our Baja and Pro-Line dealers," he continued. "They can broker Fountain and Donzi sales—that's a side benefit to being a Baja or Pro-Line dealer. As for the dealers we do have, they will still be able to broker Fountain and Donzi sales. They just won't have to carry inventory."
Earlier this year, sales of Fountain sportboats and center consoles became factory-direct.
While the company had orders for Fountain and Donzi models when it made the decision to go factory-direct with its sales earlier this year, it recently delivered its first Donzi 35 ZF center-console to a customer who came to the factory to take his new boat on its first sea trial on the Pamlico River, which runs by the plant, and then trailer it home. And according to Walker, he was in constant contact with the buyer during the ordering process.
"What happens in the process is a customer will call or email an inquiry, and we discuss their needs for everything from performance and engine packages to hull color and custom upholstery," said Walker. "Between myself and engineer David Hardison, we can answer all their questions. The customer also can come down for a factory tour and meet everyone in person."
In another move not just to help boost sales but to service existing Fountain sportboat and center-console owners, Walker and his team created Powerboat Headquarters. An addition to the company’s existing service facility in Washington, Powerboat Headquarters is the company's new in-house consignment and powerboat restoration department. Complete restoration services are offered to buyers and sellers of pre-owned models on consignment with the company. The goal is to make the buying and selling of pre-owned models easier for Fountain owners, which could in turn lead to new-model sales. That’s the hope, at least.
"Let's say you want to sell your boat but don't want to put a penny more into it, and there's a buyer for it but he wants the upholstery redone," Walker explained. "We can offer that service to the buyer at a reasonable price, and the entire transaction is easy because it happens in-house. Or maybe the buyer wants to restore the boat before he sells it. Our goal is to help complete the sale and transfer of that boat from one loving owner to another."
Another good sign for Fountain is that the company has begun aggressively advertising and marketing again—in a still-declining market segment, no brand is so dominant that it can expect consumers to remember it by reputation alone. The decision-makers at Fountain know the brand name, especially without a dealer network to help trumpet it, needs to be out there and amplified, and they’ve begun moving in that direction.
No one can predict whether or not Fountain’s most recent steps will be effective, much less work wonders. Most industry insiders agree that the bottom-line key to a revival of the production sportboat market is a revival of the consumer lending—at least in some form—that supported it. Plus, on the commercial lending side a lot of banks lost a lot of money on the sportboat segment when dealers closed their doors and Fountain, by contractual obligation with the lenders, had to take back the inventory and then couldn’t move it and repay those lenders. So when it comes to the consumer and industry lending sides, banks will remain cautious at best for the foreseeable future.
But in the meantime, Fountain has made some significant positive moves to get itself a good chance.
For more information, visit Fountain Powerboats.
