Back to the Basics

By Hannah Wallace February 29, 2004

In the mid-1960s, seven-year-old Steve Heese watched as a boat with a gleaming mahogany hull pulled a water skier down the Hillsborough River. As that Chris-Craft runabout cut smoothly through the water Heese thought, "Wow, I want one of those." Eventually Heese would not only own a Chris-Craft but also save the boat company from sinking.

Chris-Craft started out in 1874 in Algonac, Mich., and became known for building beautiful yachts for the Vanderbilts, Roosevelts, Fords, Firestones and other prominent families. The family-owned and run boat company was sold for the first time to a group of investors in 1960s; eventually, Chris-Craft would go through a number of owners and business plans.

In the '60s, for example, one of those owners started buying television stations under the umbrella of Chris-Craft Industries. In 1966, that owner sold the boat manufacturing side of the business and kept the brand name Chris-Craft Television for his TV stations. This put the new owners of the boat company, who also wanted the Chris-Craft name, in an awkward position: They now had to pay a license fee to use the name that had always been synonymous with pleasure boats.

Chris-Craft eventually found its way to Manatee County in 1979. G. Dale Murray bought the company in 1981 and began to manufacture smaller "go fast" boats rather than its signature yachts. In 1989, Murray sold Chris-Craft to Outboard Marine Corporation (OMC).

OMC was dragged down by its Evinrude and Johnson motor divisions, which were struggling with competition with Japanese outboards and new emission standards; OMC filed for bankruptcy in December 2000, closed the Manatee plant and laid off more than 300 workers. OMC sold off its assets to Genmar Holdings in March 2001.

Enter Heese and his college pal Stephen Julius. The men had been at Harvard together earning their MBAs, and they eventually went into business together, reviving the classic boat brand in Italy called Riva Marine.

Heese's pulse quickened when he saw that Chris-Craft was up for bid, and on March 8, 2001, Julius and Heese bought the129-year-old company from Genmar. Their idea was take a strong position in the luxury boat niche and reclaim Chris-Craft's historical territory.

"It was a natural," says Heese. "Stephen had done a number of bankruptcy investments, and I had done a couple of them, and this was a lining up of the stars as far as our wants and desires, skills and experience, with an opportunity. We were fortunate in being able to seize that opportunity."

While they were bidding on the boat company, Rupert Murdock's News Corporation went after Chris-Craft Television. Heese and Julius went to Murdock's news division while the FTC was approving the TV deal and negotiated to buy the brand name Chris-Craft outright, bringing the classic boat and its name back together again in August 2001. "We did something historic, reuniting a product with its brand name after almost 40 years," says Heese. "It was a long shot to pull off these two deals [the purchase of the name and the company] but it was a prize worth the time and energy."

Heese would not reveal how much they paid for the boat company at auction. (Genmar bought OMC's two failing boat divisions, Bombardier and Chris-Craft for $95 million, and Chris-Craft had been a solvent division and was considered the jewel in OMC's treasure chest.) Four months after the sale, with Julius as chair and Heese as president, the 250,000-square-foot factory at 8161 15th St. E. in Manatee County reopened. There are now 220 workers, about 150 of them former employees, and Chris-Craft is turning a profit once again.

Expert boat builder Michael Peters was contracted to undertake the redesigning and resurrection of Chris-Craft's popular 1955 Roamer model and the Launch model, a boat that traces its lineage back to the boats the company manufactured for the landing at Normandy. Julius dropped all the models OMC had produced for the mass market except the Express Cruiser, a vintage Chris-Craft 30-foot luxury yacht. Peters has emphasized a retro look with deep red wood and shining steel for all of Chris-Craft's models.

"Outboard Marine Corporation was trying to compete on a "me too" basis [by offering] a product that looked like everything else on the market," Heese says. The partners intend to develop new models as well as reproduce some of the classics.

Today Chris-Craft has 11 models that range from 22 to 43 feet and cost between $54,000 and $600,000. They are limiting manufacturing to 500 boats a year. The plant can now turn out a 33-foot Express Cruiser in seven or eight weeks and a 25-foot Launch in three. Although the company would not reveal current revenues, spokesperson Valerie Misa says that the production schedule is full. Assuming 500 boat sales a year, the company would gross between $27 million to $300 million in revenue.

Chris-Craft has 40 dealerships throughout the United States and Europe and a sales office at Regatta Pointe in Palmetto.

"Being from Harvard I'd like to tell you we did a lot of market research, but we didn't. We thought that people would recognize and buy quality," said Heese. "We are united to build the best boat on the market. We feel that a brand is a promise, and we are living up to the promise of our brand name."

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