Chandlery Buyout with Future Alliance Contract
By Mary Swift-Swan
Published: January, 2003
West Marine’s extensive growth in the 1990s has supplied the push to topple its fiercest discount marine supply competitor, BoatU.S. West Marine purchased 62 stores, equipment inventories, and mail-order catalog sales of BoatU.S. for $72 million in cash and assumption of certain liabilities. This move also swells their marine chandlery chain to 320 stores. Exiting BoatU.S. stores will retain their good name and 700 employees nationwide for now.
In announcing the new partnership, BoatU.S. founder and chairman Richard Schwartz said, "This strategic alliance with West Marine will accelerate BoatU.S. membership growth and will allow BoatU.S. to concentrate its resources on what we do best--marine insurance, BoatU.S. Magazine, government representation, consumer advocacy, towing, boat financing--and working to make the waterways safer and cleaner for recreational boaters throughout the United States."
BoatU.S. was launched in 1966 without retail marine centers. It contracted with employee-owned Boat America Corporation in 1977 to open its first retail marine center in order to deliver marine gear at discount prices to its members, who frequently had to pay high retail prices at small chandleries. "The market for marine gear has changed markedly in the past two decades," noted Schwartz. "Discount marine outlets are now readily available around the country and over the Internet. West Marine, whose primary focus is the sale and merchandising of boating supplies, has proven its ability to deliver quality merchandise at competitive prices while sustaining an impressive growth rate of stores. The time is right for us to partner with West Marine and to serve the boating public to the best of our respective abilities," he added.
Since the beginning, BoatU.S. has had the tiger by the tail. It has grown in many directions at the demand of members. Equipment supply that developed due to customer demand for products at affordable prices through volume purchase power was running on such tight margins the company was not making progress in this area of their business. "This is a very positive move for us. One we feel our members will benefit by," said Michael Sciulla, head of PR for BoatU.S. The current membership of 535,000 does make significant contributions for state and federal government advocacy, being heard on issues of waterway legislation, conservation, and safety, which are concerns to both recreational and commercial boaters.
West Marine CEO John Edmondson applauded the contract for alliance with BoatU.S. saying, "West Marine shares BoatU.S.’s commitment to service and representation for boaters. By partnering with BoatU.S. to generate more members, we can contribute to the power of their work and that’s a big plus for the boating community." The alliance contract guarantees that West Marine will actively encourage membership growth for BoatU.S. through new and various means, primarily getting the message about BoatU.S. out to boaters through its 320 stores. A Platinum version of West Advantage is under consideration.
