Strategy & Finance

FRANCE | GRAND LARGE YACHTING

59 International Boat Industry | FEBRUARY MARCH 2014 www.ibi-plus.com
SPOTTING AN OPENING IN THE MARKET FOR ALUMINIUM SAILING CRUISERS, TWO
ENTREPRENEURS EMBARKED ON SETTING UP THEIR OWN BOATBUILDING OPERATION. A
DECADE ON AND GRAND LARGE YACHTING COMPRISES FOUR BRANDS, ALL IN GROWTH MODE
WORDS: OLIVIER VOITURIEZ
Full speed ahead
G
rand Large Yachting is proof that even in
these tough times a shipyard can start up
from scratch in Europe, and in a relatively
short period become a success story. Founded
under the Allures Yachting brand in 2003 by Stphan
Constance and Xavier Desmarest, the Groupe is
expecting consolidated turnover to hit $14m for 2013
after year-on-year growth of 40%. Today Allures is
joined by three other yards Outremer, Garcia and
Alumarine making up a Grand Large portfolio of
cruising boats offered in sail and motor, mono and
multihull, and in aluminium and composite.
It was a chance to sail the globe during
a sabbatical year from their jobs as strategy
consultants at Boston Consulting Group, that the
seeds for Grand Large were sown in the minds of
Constance and Desmarest, two fellow graduates
and friends from Ecole Centrale in Lyon. The two
engineers looked at all the boats that would t their
specic needs but found nothing that suited.
They noted that they were not alone. Their
frustration was shared by many leisure boat sailors
and ocean travellers. Ever the consultants, the two
men spotted a business opportunity to develop the
ultimate sailing cruiser.
They sat down at their desks. They needed to dene
a product, it would be an aluminium centreboarder.
The lengthy process then began of bringing on board
the right specialists and sub-contractors that could
turn the dream into a reality.
ALLURES YACHTING
Constance and Desmarest contacted CMN
(Constructions Mcaniques de Normandie) in
Cherbourg, Normandy. The boatyard, run by Jean-
Pierre Balmer, had a staff of 400 and since 1945 had
built over 350 boats and luxury yachts. Now the
yard was on hand to help the young entrepreneurs
launch their project. CMN took them under their
wing, made the aluminium hull, assembled the rst
Allures 45, found and managed the subcontractors:
2B composite for the deck and James for the cabinet
work. In exchange, CMN was charging for hours in
architecture and the manufacture of the hulls.
We were extremely lucky at the outset to have
been helped by a boatyard of the stature of CMN.
They took us in hand, explained how to make a boat,
remembers Stphan Constance. The fact that they
were behind us reassured the customers. We were
able to use the CMN Alliance partnership to full
advantage. But the clock was ticking and it would
take a mammoth effort to present the rst prototype
at Septembers Grand Pavois de La Rochelle, just
eight months after the brand was ofcially launched.
They made it, just, and the boat was sold.
Allures was born from scratch. There was nothing at
the beginning. Not a product, nor a tool, nor the funds.
But our success proves that an industrial start-up was
possible in France in the year 2000, adds Constance. To
start off the two entrepreneurs put down $20,000 and
raised $2m in venture capital from their families, friends
and business contacts, as well as love money from
business angels who believed in the project.
Reaction to the boat was good. The two
entrepreneurs rmly believed that there was a place
for a new product in the under-exploited market of
C
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Grand Large
Yachtings
founders Stphan
Constance (left)
and Xavier
Desmarest
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60 FEBRUARY MARCH 2014 | International Boat Industry www.ibi-plus.com
Strategy & Finance
FRANCE | GROUPE GRAND LARGE YACHTING
aluminium centerboarders. The
key to Allures success was to
associate the freedom offered
by this type of boat, the safety
guaranteed by aluminium
hulls, the performance of
composite superstructures
and a good level of comfort
for on-board living. The
coupling of an aluminium hull
with a composite deck was
not new in naval architecture,
but what was innovative was
using the technology CMN had for superyachts on
smaller leisure boats. We wondered why this procedure
hadnt been used before for sailing boats, says Xavier
Desmarest, attributing this to the cottage-industry way
of building of yachts, where one boatyard specialised in
one type of product and a standard size. We patented the
technological procedure of assembling hull and deck.
With its offer of boats that were better thought out,
and less expensive than the others,
Allures saw rapid growth. Three sailing
boats were sold in 2004, six in 2005 and
12 in 2006, when the company moved
to its own workshops in Tourlaville, near
Cherbourg. Twenty units were marketed
in 2007. From nothing, the turnover
of the boatyard had reached $6m.
And then... Lehmann Brothers threw a
spanner in the works.
CAT CHALLENGE
Although Allures suffered from the downturn in the
market, the crisis was offset by an opportunity for
growth elsewhere. In October 2007, Constance and
Desmarest bought out the Outremer boatyard that was
in receivership at the Commercial courts of Montpellier.
Outremer, founded in 1984 at La Grande Motte (on the
Mediterranean coast), specialised in large composite
cruising cats from 45ft-60ft. The company had had
nancial difculties following a difcult handover and
poor management. We very quickly saw Outremers
potential and the good drivers it had for growth. The
boatyard was similar to ours. They had the same problems
as us (aftersales servicing, tools, etc), says Constance.
It was intrepid on our part, a challenge, but it was an
opportunity for us to enter the catamaran market which
was then very promising. In 2000 it was a niche market,
today its a market full stop.
Allures managers attribute the catamaran boom to a
new generation of sailing enthusiasts who like this type of
boat, and this new generation included women. Their role
and choices were also important. As was the rental
market which was introducing the boat to a much larger
public. Outremer was to benet from this niche market,
a rare growth sector in yachting. When the company
changed hands in 2007, the boatyards turnover was
$1.7m. It has since grown fourfold and in 2013 reached
$8.5m. The workforce has doubled over the same
period, from a staff of 30 to the present 60. It is largely
thanks to Outremers success they have built over 200
catamarans since 1984 that Grand Large has had such
strong overall growth.
PROFITABLE SINCE 2006
At the time of Outremers acquisition, Allures
Yachting had to cut back its own production on
account of the downturn. But our prots went up
during the contraction, Desmarest points out. The
boatyard has been protable since 2006. Small
prots, thats life in the nautical world. Allures had
a staff of 30 and a turnover of $4.3m in 2013. Five
models the Allures 44, 40, 51, 45 and this years
Allures 39.9 have been launched;
a total of 100 boats have been built
by the Norman yard.
Since the boatyard started in
2003, all prots have been ploughed
back, giving the Group a strong equity
of approximately $2m.
Astute management has
produced an average and
approximate 40% annual growth
since 2004. The two founders hold
the majority of the ownership of the group, together
with patient shareholders who have received no
dividends on their initial investment. Our investors
are able to both take risks and wait 10 to 20 years
before getting anything back, as reasonable capitalism
dictates, Constance acknowledges.
NEW GROWTH WITH GARCIA
A new opportunity for external growth came in spring
2010 in the form of Garcia boatyard. It was another
good brand, also in receivership. Specialising in 50-
110ft aluminium custom-built sailing cruisers, the
Normandy boatyard had carved a strong reputation
for itself since 1974. When Grand Large took over,
they re-launched production, and came up with the
new Garcia Trawler 54, the groups rst motorboat,
diversifying its product base still further. They will
soon be launching the Garcia Exploration, a 45ft
sailing cruiser made for global sailor Jimmy Cornell.
Garcia boatyard is located at Cond-sur-Noireau
in Normandy, and is now an integral part of Groupe
It is madness
to start up a
boatyard in France
today. We were so lucky
with Allures...
Grand Large
is forecasting
sales of 14 in
2013
61 International Boat Industry | FEBRUARY MARCH 2014 www.ibi-plus.com
Staff: 125 people
Turnover 2013: 14m (estimate)
Allures Yachting, run by Stphan Constance, is
based in Tourlaville, near Cherbourg. It builds ocean-
going aluminium centerboard monohulls from 40ft-52ft.
Outremer Yachting, directed by Xavier Desmarest,
is based at La Grande Motte (Languedoc). It has
specialised in ocean-going catamarans for almost
30 years, with a range from 45ft-59ft.
Garcia Yachting, directed by Benot Lebizay, builds
45ft-115ft custom aluminium boats. The boatyard is
located in Cond-sur-Noireau.
Alumarine Shipyard in Couron, near Nantes, has
been building commericial boats and aluminium
ocean-going catamarans since 1986.
Grand Large Services handles aftersales,
maintenance, repair, ret, delivery, training,
brokerage and other services for Groupe Grand
Large Yachtings customers.
Grand Large. The yards builds 15-20 aluminium hulls
a year for Allures models from 40-50ft. We gave
our orders to Garcia as our usual provider had to be
replaced at exactly that time, says Constance, who
conrms that he is totally committed to the boatyard
and its remaining staff who turned their backs on
advantageous redundancy packages during the
receivership period and preferred to work and earn
their living with dignity. To meet new orders, 10 new
welders were hired. The turnover of the boatyard run
by Benot Le Bizay with a staff of 15 is expected to be
$1.5-$2m next year.
Constance acknowledges in hindsight that it is
much easier to take over a boatyard than to start from
scratch. Its madness to start up a boatyard in France
today. We were so lucky with Allures. At the time, we
never dreamt of expanding externally.
The acquisition of Outremer and then of Garcia
were unexpected, but as things worked well, the
entrepreneurs started looking at other available
companies. But with a golden rule: existing teams at
the yards should be favourable to re-structuring plans
put forward by Grand Large. In 2010, the group made
a bid for the Alliage boatyard that was rejected in
favour of one from Alubat. They were the two French
builders specialising in aluminium sailing cruisers.
Alliage subsequently went bankrupt in 2011. Alubat,
in receivership in autumn 2013, was acquired by a
private investor at the end of the year.
COMPLETE PRODUCT RANGE
Grand Larges last push for external growth was
in October 2013 with the successful acquisition
of AluMarine, a Nantes boatyard focusing on
aluminium work and leisure boats. The yard was also
in receivership. Synergy and common equipment
between Grand Large and AluMarine meant we were
interested in making a bid, Desmarest explains.
AluMarine builds large (40ft-100ft) custom leisure
power and sailing cats, as well as commercial barges
and service vessels. The rescue plan ensured jobs
for 14 of the staff of 20 and turnover for next year is
expected to be between $1.5 and $2m.
CAREFUL ORGANISATION
Desmarest and Constance put extremely careful
organisation and a focus on immediate protability
as core to their success. An Enterprise Resource
Planning and computer assisted production
management tool is shared by all the yards and is
the pilot for all departments, including production.
All the boat models are designed on this ERP, which
manages building, timing and traceability.
Controlling quality of production methods is also
vital. Grand Large has control tools that were designed
by a former quality manager at the Institut Pasteur.
Computer Aided Design (CAD) means production
issues are resolved at design stage and not on the
prototype. These are very expensive tools that soon
pay their way, and they are vital. They mean that teams
in the different boatyards can work at the same time on
cross-Group projects, says Constance. Sharing common
tools means that the design teams at the four boatyards
can back each other up for rush jobs, and it also means
rigorous cost control and global accounting.
EXPORT MARKETS
Seventy per cent of Grand Large Yachtings
production is for the export market. There is an
active international sales team in some 15 countries,
including Northern Europe, the US and New Zealand.
Each brand has its own territory; Allures the colder
climes, Outremer the warm seas.
With its undisputed industrial and commercial
success, service is the new focus of strategic
development for this very dynamic group who feel
that they should offer more than one product.
Describing themselves as a one stop shop, Grand Large
Services wants to be the portal for ocean-going vessels,
global project management for the Groups customers,
from aftersales service to brokerage, and including ret,
coaching and boat delivery.
At a glance: Grand Large Yachting