Morris Yachts seeing increased interest from potential customers
Photo / Courtesy Morris Yachts
Morris Yachts, which has experienced the ups and downs of the luxury yacht industry, is seeing an increase in interest in its boats. Pictured here is a 42-foot, M-Series sloop, rounding the Bear Island Lighthouse off of Mount Desert Island.
Photo / Laurie Schreiber
Morris Yachts CEO Pete Carroll, left, and owner Cuyler Morris at the company’s Northeast Harbor boatyard.
Sales of new boats at Morris Yachts plummeted when the recession hit in 2008.
But with a surge of customer interest and new contracts coming in, owner Cuyler Morris and new president Pete Carroll are optimistic about the future.
“Since Aug. 1, we've done 33 test sails,” Morris says. “That's more test sails than we've done in three years. I'll remain optimistic.”
Of course, when the economy sours, boats are among the first discretionary items consumers stop buying — and that was the case with the recession. In 2007, the Morris yard in Trenton produced 21 or 22 new boats. The company continued to build small numbers of boats in each of the following lean years, with production hitting a low of four boats in 2014. Staff levels fell from 130 in 2007 to about 25 today.
At the same time, the business of storage and service remained a steady source of revenue. Sites in Northeast Harbor, Tremont and Southwest Harbor have served a fleet of 120 to 130 boats. Morris has another site in development in Trenton. Like other builders that made it through the recession, Morris considers storage and service one of several elements that has kept the company solvent, along with maintenance of infrastructure work.
This past July saw several developments aimed at moving the company forward.
- The hiring of a new president, Pete Carroll, a retired Coast Guard commanding officer and engineer with an MBA from the University of Michigan.
- The sale of the Bass Harbor boatyard, which was also a storage and service facility.
- An agreement with Handy Boat Marina, a Falmouth boat yard founded in 1934. The deal made Handy a Morris Yacht Service Center both for Morris and non-Morris customers. The agreement allows Handy to license the Morris name for its service business, with Morris training Handy technicians for the particular type of care associated with the Morris brand. In return, Morris receives a percentage of revenues and has a presence in an area with a large boating population.
At the same time, Morris has been considering queries from potential investors and buyers.
“Because of the storied history of the company and the quality of the brand, we get inquiries from customers and groups all the time about investing in the company,” says Morris. “We've been exploring some avenues and opportunities.”
Investment in new product development is a top priority, he says.
“The product development required in order to stay relevant today is more fast-paced than ever,” Morris says. “And the resources required in order to stay current — new designs and tooling — 30 years ago cost a fraction of what it is these days. That's where some investment could fortify our ability to stay ahead.”
Morris Yachts is a well-known name in the world of high-end, luxury sailboats. It got its start in 1972, when founder Tom Morris, originally from Philadelphia, moved to Southwest Harbor, having spent childhood summers sailing in nearby Northeast Harbor. He started out finishing fiberglass friendship sloops. He eventually built a shop and began producing sailboats, ranging from 26 to 51 feet long, designed by naval architect Chuck Paine of Tenants Harbor. These included the Ocean Series — high-end performance cruisers that are still available — and so-called “heritage” yachts that are no longer in production.
Tom's son Cuyler joined the company in 1995. Together they expanded the service side and boatbuilding capacity. Cuyler became president of the company in 2001, while Tom served as company ambassador and delivery skipper until his death in 2008.
In 2004, the company partnered with naval architecture firm Sparkman & Stephens to introduce the M-Series sailboat — a “classic design with modern performance innovations” — designed both for day sailing and offshore cruising. The first, the M36, was launched that year and was followed by lengths from 29 to 52 feet. By 2008, the company had sold 73 M-Series yachts. But, as was true industry-wide, orders went into a steep decline and about half the workforce was laid off. Some were hired back in 2010, when the company won $7 million in contracts from the U.S. Coast Guard Academy in New London, Conn., to build eight Leadership 44 training vessels designed by Pedrick Yacht Designs in Newport, R.I. New orders for other boats were coming in as well, including four M36s delivered to Australia, Chicago, Islesboro and Bar Harbor. By 2011, the company hired its first CEO to run business operations and finances.
Today, as the sole owner of the company, Morris focuses on product development, customer relations and strategic initiatives. By 2014, that resulted in two new products. The X-Type package for the M-Series models offers the classic topside of the M-Series with a deeper keel and taller rig for people who like to race.
“We recently brought a 36X to the Newport boat show and had a tremendous number of people interested in that option,” Carroll says.
The Ocean Series 48 GT (Grande Touring) incorporates hundreds of innovations to the interior, rig and cockpit of the award-winning Ocean Series 48.
In 2014, the company built four boats. An M29 and M36 went to Mount Desert Island summer residents who hail from East Hampton, N.Y., and Philadelphia, respectively. The first M42X was built for a Southwest Harbor customer. And this past May, Hull No. 3 of the M52 line — built for a customer from California who plans to spend summers living on the boat in Newport, R.I. — was the company's most recent launch.
Altogether, the company has produced 126 M-Series boats in the 11 years since the series' debut, as well as 203 Ocean Series boats. Total production since the company's founding is 330 to 340 boats. Prices these days range from $200,000 to more than $1 million, with options adding as much as 50% of the base price.
For 2015-16 production schedule, the company recently started construction of an M36. Construction of an Ocean Series 52 is due to begin shortly, once planning for the interior is complete. A contract for an M46 was recently signed; construction will begin once the tooling is complete. At least two M29s and an M42 were considered likely sales. Launches are expected in the spring and summer of 2016. Most of these customers are from New England; one is from California. The Ocean Series 52 and the M36 customers are both from the Brooklin area; as long-experienced sailors, they always dreamed of having a Morris and, having reached retirement age, decided to make the jump, says Carroll.
Several people were laid off last January, but hiring is imminent for up to eight positions, including project manager, in-house engineer and electrician, says Carroll.
“This time period now is our peak as far as taking orders,” Carroll says. “Most people want to buy a boat now and have it ready for the following summer. My prediction is we'll have six boats on the production line this winter. And we plan to build back our workforce to match production. But we're going into this eyes wide open and not growing our overhead too quickly. We want to remain lean and mean.”
The upswing has been happening without any particular marketing push.
“In fact, because of the downturn we experienced in the past two years, we dialed back some of our marketing,” says Carroll. “It's purely word of mouth. They see a Morris in their harbor, or this is their final dreamboat, so to speak. So, interestingly, we've dialed back our marketing and increased our sales. That's not very scientific, but it's certainly fortuitous.”
Carroll, who retired earlier this year as commanding officer of the U.S. Coast Guard's Civil Engineering Unit in Cleveland after 20 years with the service, came to Morris on July 1. The Carroll and Morris families have been friends since Carroll's father bought one of Tom Morris's first Friendship sloops in 1978.
“We looked at a lot of people,” Morris says. “We were lucky to find somebody of Pete's caliber, with his skill set, in a relatively short period of time.”
Carroll started out by instituting a policy of transparency.
“I felt the employees may not have had a good idea of what's going on with the company, good or bad,” he says. “I think I've brought to them the realities of what we can do in the financial position we're in.”
What is the company's financial position?
“We're in a good state,” says Carroll, who declined to cite numbers but says the company is running in the black. Still, he says, “I would say we have a way to go to bring the company back to where it was.”
Morris expects that to happen.
“I think, financially, people are feeling more stable,” Morris says. “I think people are realizing, 'Let's get back on track.' I hope that's the case, because we love building boats. The last thing we like to do is shrink our business and let all these awesome people go.”
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