It appears the marine industry is facing some gale-force headwinds. OBC Holding Co., the Redmond, Wash.-based owner of boat dealership chain Olympic Boat Centers, filed for Chapter 11 on July 17 in the U.S. Bankruptcy Court for the Central District of California. A day later, custom boat builder and servicer Derecktor Shipyards Conn. LLC submitted a petition to the U.S. Bankruptcy Court for the District of Connecticut.
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Although neither company included a reason for its bankruptcy filing, a report on Olympic Boat in The Seattle Times says the marine industry is the latest to be hit by -- surprise -- high fuel prices, a weak housing market and a shaky economy. Let's face it, boats are a luxury item. And when times get tough, the first things consumers, even rich consumers, reassess is their discretionary purchases, such as boats.
Indeed, with so much economic uncertainty and the cost of operating boats increasing, customers are staying away. As a result, there may be more boat dealerships, makers and servicers sailing into bankruptcy in the near future. All the air and ground freight transporters, airlines, auto parts makers and other transportation companies already parked in Chapter 11 because of fuel costs had better move away from the bankruptcy dock. - David Elman
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Right now, it's a perfect storm for boat sellers. Hugh fuel prices and an uncertain economy dissuade new buyers; meanwhile sellers are offering fire-sale prices on lightly used boats. In Florida, particularly, owners of distressed businesses, particularly building contractors and subcontractors, and auto dealers, are trying to unload their toys before they lose their houses to lenders seeking to collect on personal guarantees. As more boats are offered into the market, the prices go down and down.