Shame on Malibu corp.

[Bill_AirJunky]

5) Bakes enjoyed exclusive rights to new Malibu sales for the entire state of Washington (a very strong boat market w/ lots of water and lots of rich people). So no other Malibu dealer can move in to compete with you. Anybody who wakes up in the entire state of Washington and realizes they want a new Malibu, is your customer. Period.

Um, there are as many as 4 other dealers who sell boats in WA state. .... if you count Active Watersports, High Output, SunDown Sport or Coeur d'Alene Yacht Club...... of which have very strong opinions with how this has played out.

Edited July 8, 2010 by Bill_AirJunky

[jeremyk]

While speculating on what happened between Bake and Malibu is fun, there is a different aspect to this that nobody has mentioned.

Why didn't any of you step up to buy this dealership? I'm asking both Bake's employees as well as Bu Crew enthusiasts (Seattle natives as well as out of towners).

Consider some facts:

1) Bakes has many many loyal followers (both customers and employees) who've expressed outrage at the way things have played out

2) Bake wanted to find a new owner that was passionate about Malibu and would continue the long tradition he'd established (people like those mentioned in 1).

3) Bakes had taken Malibu to #1 market share in the area. That means Bu was outselling MC, CC, SC, etc. etc.

4) The location of the shop is freeway convenient/visible, very close to the Sammamish ramp (quick access to demos is key to boat sales), and in the back yard of the richest real estate in the PNW and one of the biggest tech companies in the world!

5) Bakes enjoyed exclusive rights to new Malibu sales for the entire state of Washington (a very strong boat market w/ lots of water and lots of rich people). So no other Malibu dealer can move in to compete with you. Anybody who wakes up in the entire state of Washington and realizes they want a new Malibu, is your customer. Period.

6) The listing for the dealership clearly stated that Bake would provide "owner financing" and would stay on board for as long as it took to ramp up the new owner. That means cheap/easy financing (as compared to your typical bank's business loan requirements) and free training to ensure your succcess.

Conclustion: If you ever dreamed of being your own boss and working in a business you love, this was the one.

Seems to me like the ideal set of circumstances for any boating enthusiast who had a desire to run their own business: a long-time employee of Bakes, a loyal customer of Bakes, an employee of another dealership who dreams of owning his own place, a burned out corporate type who likes to wakeboard and is ready to go out on his own. All of these people and more should have been all over this opportunity. These are exactly the kinds of people I bet Bake was looking for and likely the type of person he'd agree to offer "owner financing" to. My guess is that all you'd need is 10% down and Bake would have let you pay off the rest over time using the profits of the business (assuming it was profitable). Even if you didn't have the $95K in cash, many of you could have borrowed from family, retirement, or found a silent investor. Maybe Bake would have done 100% financing. Who knows?

My point is... it's been 9 months since Bake posted his letter... didn't it ever cross any of your minds to buy this place? Running a Malibu store sounds like a dream come true for Bu Crew enthusiasts such as yourselves. Shoot, I don't live in Seattle and I don't own a Malibu, and even I've kicked the idea around, run some numbers, talked to some industry types, etc.

This was a turn-key business in an industry we spend our days and nights dreaming about. And nobody stepped up. To me it's tellng that Bake's own employees didn't or couldn't step up.

Perhaps this thread should be renamed: "Shame on Us"

Am I the only person wondering this?

It crossed my mind as I am sure it did many others. I can tell you that the red flag for me was that Malibu appears to be changing the rules on how they wanted Bakes to buy boats (buy more inventory up front to sit on the floor). It is no longer a turnkey business when you cant use the tried and true formula for success Bill has created. Owner financing aside, this would have been a major change in day to day operations. To be specific, you need to focus on selling what you have rather than selling what the customer really wants.

Just my 2 cents FWIW

[IXFE]

It crossed my mind as I am sure it did many others. I can tell you that the red flag for me was that Malibu appears to be changing the rules on how they wanted Bakes to buy boats (buy more inventory up front to sit on the floor). It is no longer a turnkey business when you cant use the tried and true formula for success Bill has created. Owner financing aside, this would have been a major change in day to day operations. To be specific, you need to focus on selling what you have rather than selling what the customer really wants.

Just my 2 cents FWIW

Okay, good point. But did you know about Malibu's new inventory requirements 9 months ago when the dealership went up for sale? Or is that just hindsight talking?

[jeremyk]

Okay, good point. But did you know about Malibu's new inventory requirements 9 months ago when the dealership went up for sale? Or is that just hindsight talking?

It would have most likely come up during the DD. That kind of decision doesn't happen over night.

[IXFE]

It would have most likely come up during the DD. That kind of decision doesn't happen over night.

Yeah, but you just proved my point. You said that buying the dealership crossed your mind, but the red flag was the Malibu inventory demands. But the truth is you didn't know about those new inventory demands until you read it on this thread.

I'm not trying to be argumentative. I'm just curious what the real red flag was for all you who considered buying Bakes, but ultimately didn't.

Edited July 9, 2010 by IXFE

[skyskier]

Yeah, but you just proved my point. You said that buying the dealership crossed your mind, but the red flag was the Malibu inventory demands. But the truth is you didn't know about those new inventory demands until you read it on this thread.

I'm not trying to be argumentative. I'm just curious what the real red fag was for all you who considered buying Bakes, but ultimately didn't.

I was going to say my real red flag is in my back pocket, but then I noticed the spelling error. Yikes!

[Bobby Light]

Yeah, but you just proved my point. You said that buying the dealership crossed your mind, but the red flag was the Malibu inventory demands. But the truth is you didn't know about those new inventory demands until you read it on this thread.

I'm not trying to be argumentative. I'm just curious what the real red fag was for all you who considered buying Bakes, but ultimately didn't.

How about the fact it isn't easy to get over 1 million in this economy from a bank, ever think about that one? Banks aren't lending jack for that type of investment right now without alot of collateral. Only pre-screened and qualified people were let into the data room for the particulars on the financials. It's not like any loyal customer can just walk in and take over. I think you're really over simplifying this.

By the way, update your boat to reflect your MB Sport in your avatar.

Edited July 8, 2010 by 06vlx

[Bobby Light]

I was going to say my real red flag is in my back pocket, but then I noticed the spelling error. Yikes!

Maybe he has other intentions

[Chappy]

Yeah, but you just proved my point. You said that buying the dealership crossed your mind, but the red flag was the Malibu inventory demands. But the truth is you didn't know about those new inventory demands until you read it on this thread.

I'm not trying to be argumentative. I'm just curious what the real red fag was for all you who considered buying Bakes, but ultimately didn't.

I like this guy!

I agree this would be a dream come true. Myself and few others (I know of one employee who was very interested) considered it very briefly and I will preface this and say we didn't dig deep into the numbers but on the surface the numbers didn't add up. The $950K was for the dealership only and no real estate. Also it was unreasonable to assume that Malibu would let a new owner with no history in the boat business play by the same rules as Bill with a 20+ year track record of success. (I would be willing to bet Bakes was one of the few dealers in the country without a quota) Our other red flag was the changes banks made regarding flooring financing specifically for boats. Unless you had lots of cash and were willing to stick your neck out it was going to be tough to stock boats. This one of the reasons Bill quit pre-ordering boats. If you were looking to transition out of the business would you drop big $ on inventory?

Finally, it has been said numerous times Bakes almost exclusively did custom boats. This is true the last couple of years but has not always been the case. Of the roughly 100+ boats they sold in 2008 close to half were preordered.

Edited July 9, 2010 by Chappy

[jeremyk]

Yeah, but you just proved my point. You said that buying the dealership crossed your mind, but the red flag was the Malibu inventory demands. But the truth is you didn't know about those new inventory demands until you read it on this thread.

I'm not trying to be argumentative. I'm just curious what the real red fag was for all you who considered buying Bakes, but ultimately didn't.

Well for me personally, it's not enough to just go by a business. And I had to be sure I would be passionate about it. Part of that includes being an owner. That was the first step. By the time that happened, all this other stuff started happening and coming to light. Add that to the economy and you have a sure sign that seas ahead won't be easy. So continue down a path that is full of gotchas coming up left and right. I like my boat but I don't want to end up living on it.

[MalibuTime]

While speculating on what happened between Bake and Malibu is fun, there is a different aspect to this that nobody has mentioned.

Why didn't any of you step up to buy this dealership? I'm asking both Bake's employees as well as Bu Crew enthusiasts (Seattle natives as well as out of towners).

Consider some facts:

1) Bakes has many many loyal followers (both customers and employees) who've expressed outrage at the way things have played out

2) Bake wanted to find a new owner that was passionate about Malibu and would continue the long tradition he'd established (people like those mentioned in 1).

3) Bakes had taken Malibu to #1 market share in the area. That means Bu was outselling MC, CC, SC, etc. etc.

4) The location of the shop is freeway convenient/visible, very close to the Sammamish ramp (quick access to demos is key to boat sales), and in the back yard of the richest real estate in the PNW and one of the biggest tech companies in the world!

5) Bakes enjoyed exclusive rights to new Malibu sales for the entire state of Washington (a very strong boat market w/ lots of water and lots of rich people). So no other Malibu dealer can move in to compete with you. Anybody who wakes up in the entire state of Washington and realizes they want a new Malibu, is your customer. Period.

6) The listing for the dealership clearly stated that Bake would provide "owner financing" and would stay on board for as long as it took to ramp up the new owner. That means cheap/easy financing (as compared to your typical bank's business loan requirements) and free training to ensure your succcess.

Conclustion: If you ever dreamed of being your own boss and working in a business you love, this was the one.

Seems to me like the ideal set of circumstances for any boating enthusiast who had a desire to run their own business: a long-time employee of Bakes, a loyal customer of Bakes, an employee of another dealership who dreams of owning his own place, a burned out corporate type who likes to wakeboard and is ready to go out on his own. All of these people and more should have been all over this opportunity. These are exactly the kinds of people I bet Bake was looking for and likely the type of person he'd agree to offer "owner financing" to. My guess is that all you'd need is 10% down and Bake would have let you pay off the rest over time using the profits of the business (assuming it was profitable). Even if you didn't have the $95K in cash, many of you could have borrowed from family, retirement, or found a silent investor. Maybe Bake would have done 100% financing. Who knows?

My point is... it's been 9 months since Bake posted his letter... didn't it ever cross any of your minds to buy this place? Running a Malibu store sounds like a dream come true for Bu Crew enthusiasts such as yourselves. Shoot, I don't live in Seattle and I don't own a Malibu, and even I've kicked the idea around, run some numbers, talked to some industry types, etc.

This was a turn-key business in an industry we spend our days and nights dreaming about. And nobody stepped up. To me it's tellng that Bake's own employees didn't or couldn't step up.

Perhaps this thread should be renamed: "Shame on Us"

Am I the only person wondering this?

Well, more than one of us has looked into it, that does not mean it penciled out for any one's particular situation.

Edit- which is obvious if I had read the rest of the new posts before I commented.

Edited July 9, 2010 by MalibuTime

[IXFE]

How about the fact it isn't easy to get over 1 million in this economy from a bank, ever think about that one? Banks aren't lending jack for that type of investment right now without alot of collateral. Only pre-screened and qualified people were let into the data room for the particulars on the financials. It's not like any loyal customer can just walk in and take over. I think you're really over simplifying this.

By the way, update your boat to reflect your MB Sport in your avatar.

Sorry I haven't updated my profile. I don't visit this forum often... haven't posted since last year when I was boat shopping. I came back because I was very interested in the Bakes story and figured you all would have some insights into what happened. Like many of you, I think it's a shame.

06vlx, I sense a little hostility in your post. Like I said, I didn't mean to offend anybody and I recognize I'm a guest on your board. I dream of owning a boat dealership some day. I've run the numbers over and over again. As many of you stated, it didn't pencil out... or at least my conclusion was that it was way too close for comfort. It just doesn't feel like a business for a person in my stage of life (middle aged with a family). I'm impressed that Bake made it work all these years and raised his kids this way. What a cool childhood... having a dad who owns the coolest boat store in town. I guess times have changed.

I know it's next to impossible to get $1M from a bank. That's why I was so intrigued by Bake's offer to finance it himself and train the new owner. I think that could have made it a little more possible for the right person with the right passion and tollerance for risk to make a go at it, even if they didn't have $1M sitting around. Yes, I was over simplifiying it... it's a message board and there's only so long a post should get. You have to admit though... if you were going to ever take a run at a dealership it's hard to imagine a scenario more attractive than this one.

Many of you stated that the numbers don't pencil out. I came to the same conclusion... I just think that this is a sad commentary on what's happened to the industry. If you can't support ONE owner and a handful of employees with a Tier 1 dealer in a great boat market with an exclusive territory, what does that say?

Anyway, thanks for entertaining my thought. And you'll be glad to know, I fixed that unfortunate typo.

[Lgndracer]

The Seattle market for tournament boats has been in turmoil for quite some time now. As someone mentioned early, in the last few years all of the dealerships have changed hands with the exception of Pacific Nautiques and Bakes, until now.

While I love my Mailbu, I am quite sure I would love having a MC or a SAN equally. While everyone wants to argue on the forums which is better, at the end of the day they are three great manufactures building best in class products.

So why did I buy a Malibu? One reason, Bakes. After looking at every boat possible I narrowed the boats to an X2, SV211 and a VLX. I quickly ruled out the X2 due to the attitude of the team at Copes. The decision between the SV211 and VLX was not quite so easy. Here is Seattle the only other dealer I would say is in the same league as Bakes is Pacific Nautiques. PN is also minutes from my house, where as Bakes is an hour drive in traffic, both ways.

I am also friends with both dealers, both on a personal and a business level (I sell products to both), and both were willing to give me a very fair price on what I was looking at. At the end of the day, I chose the Malibu and have not been disappointed in any way, with either the boat or the support.

Paul has always gone above and beyond the call of duty (like running about 20 $25 gift cards I had gotten in a contest to pay for part of an invoice, after hours!), or taking calls on his cell phone after hours to answer questions (How does this come apart?) or to research a wacky idea (can I get an extra pylon bushing to press up from the bottom of the sleeve for a “special project?”).

As for SBS, I wish them the best of luck. When the time comes where I don’t wakeboard or surf any longer, I will definitely buy a Cobalt from them. But am I going to take my Malibu there for service? Unfortunately for them, no. While I am sure they are more than competent to service it, I want a place “bred” with the passion for a tournament boat. Everyone that I am aware of at Bakes skis, wakeboards, wakeskates, or surfs. Does everyone at SBS?

No one needs one of these boats. They are truly a luxury item that the owners have a passion for, not a boat a non-enthusiast would own. I want to deal with someone who has that passion.

If Bakes is no longer going to sell a tournament boat, when I am ready to replace my Mailbu it will be with a Nautique. I will do it for exactly the same reason I bought my Malibu, the people.

To Bill and Paul, I wish the both of you the best. Your commitment to both your local customers, and the support and help you give for free on this forum, is the kind of service that for the most part has gone the way of the dinosaur. Both of you, and the rest of the crew at Bakes, are what has made the dealership a success, not the Malibu brand. Malibu has been lucky to have such an outstanding partner here for the last 20 years. Because of your values, and the way you go about treating others, both of you will be successful in whatever path you end up following.

You can be assured, as long as you are still servicing tournament boats, you will always have my business.

Your friend,

Mike Munger

[The Bake]

I like this guy!

I agree this would be a dream come true. Myself and few others (I know of one employee who was very interested) considered it very briefly and I will preface this and say we didn't dig deep into the numbers but on the surface the numbers didn't add up. The $950K was for the dealership only and no real estate. Also it was unreasonable to assume that Malibu would let a new owner with no history in the boat business play by the same rules as Bill with a 20+ year track record of success. (I would be willing to bet Bakes was one of the few dealers in the country without a quota) Our other red flag was the changes banks made regarding flooring financing specifically for boats. Unless you had lots of cash and were willing to stick your neck out it was going to be tough to stock boats. This one of the reasons Bill quit pre-ordering boats. If you were looking to transition out of the business would you drop big $ on inventory?

Finally, it has been said numerous times Bakes almost exclusively did custom boats. This is true the last couple of years but has not always been the case. Of the roughly 100+ boats they sold in 2008 close to half were preordered.

I feel compelled to address this one recurring issue. The price was never $950K. The price listed was $750K plus whatever inventory the new owner wanted. This was MSRP for the national ad. Any of you pay MSRP? I also said that the profits of the business would pay for the business in 5 years or less which is why I was willing to carry it. I believe anyone buying a business should use that standard. If the business won't pay in 3 to 5 years it is overpriced. The funny part is that someone buying between February and June would have had 10 pre-sales. As it is now, service and on-line is brisk and we are doing great. We only have the Corvette boat left and I will use that for the summer. Anyone who wants to go for a spin can give me a call. B.

[Chappy]

I feel compelled to address this one recurring issue. The price was never $950K. The price listed was $750K plus whatever inventory the new owner wanted. This was MSRP for the national ad. Any of you pay MSRP? I also said that the profits of the business would pay for the business in 5 years or less which is why I was willing to carry it. I believe anyone buying a business should use that standard. If the business won't pay in 3 to 5 years it is overpriced. The funny part is that someone buying between February and June would have had 10 pre-sales. As it is now, service and on-line is brisk and we are doing great. We only have the Corvette boat left and I will use that for the summer. Anyone who wants to go for a spin can give me a call. B.

My apologies Bill for misquoting the price.