British luxury sail yacht builder Oyster Yachts saw its first profits this year since Richard Hadida bought the company in 2018 for £6.7M, beating around 30 other investors to the helm. He is now owner and chief executive officer of the 40-year-old brand and has surrounded himself with a team equally as passionate about the business as he is.
Hadida, along with chief commercial officer Paul Adamson, who has some serious sailing credentials under his belt, is bringing Oyster back to the top of its game which for the first time last year saw record unit sales.
Driving the uptick, with no doubt in either leaders’ mind, is the trust that has been reimbued in the company. “Oyster had lost its way and had lost touch with its core values”, says Adamson.
The company’s fall into administration after its Dutch investors bailed out in February 2018 caused the already troubled business to collapse. This subsequently led to a significant loss of trust in the brand, Adamson adds.
Part of Hadida’s and Adamson’s plan was to bring that trust back by ensuring customers had the best experience possible, and importantly they knew the yachts they bought were a good investment. “One quick solution was to design and build the yachts to comply with Lloyds Register SSC Rules which gives peace of mind to the design and also that every build leaving the yard is 100% safe,” Adamson says.
“If you think of our customers, they’re highly successful entrepreneurs and businesspeople who are change makers in their industry – they understand how business works. We needed to focus on earning their trust so they would be prepared to commit to building their new dream yacht with us.” Adamson says.
Purchases of superyachts powered predominantly by sail have not been smooth over the last two decades, but in recent years BOAT Pro data suggests change is afoot. In 2000, 51 sailing yachts 24m or over were sold, followed by a sharp drop the following year and then more peaks and troughs.
A record was set in 2004 when 63 units were sold, but after 2009’s sales of 54 yachts, the sector saw a steep decline to a low of 20 deliveries in 2015. The tide turned, however, in 2020 and this year sales so far stand at 40, with 2022 and 2023 orders also looking strong.
Brokerage sales of motor yachts outstripped sail in the first quarter of this year, with the total number of pre-owned yachts changing hands up 46% in 2021.
Oyster sells yachts in all sizes, including the 24m-plus range. BOAT Pro data shows the yard delivered two yachts in the 24m-plus range in 2018, one in 2019 and has another on order for next year.
“We’ve sold 23 boats [of various sizes] in the last year which is a record year,” says Hadida. “40% of our customers are from UK, 30% from Europe and 30% from rest of the world. They’re looking for bluewater, go anywhere in comfort and luxury and safety and that’s what Oyster owns, we own that space. People say Oyster Yachts are the Bentleys of the seas.”
It hasn’t been easy or cheap raising sales to this level though, with Hadida pumping over £26M of his own money into the firm and seeing significant losses over the past three years. In 2020, Oyster made £20M in sales with a pre-tax loss of £10M and for the year ending 31 March 2021, £30M was made with a lower pre-tax loss of £3M.
This financial year, however, Hadida predicts sales of £60M with a certainty of profit and is adamant the coming years will see more positive figures. As the pair have already outlined, customers now trust the company, which has helped boost sales, but the other factor not yet discussed is how Oyster fits into the global warming conversation.
“I don’t know how motorboats post-2030 will be sustainable because I can’t see technology improving to the point where they’ll be able to travel long distance on only a battery,” Hadida says.
Adamson’s view is similar: “I am so glad we’re a sailing yacht manufacturer because sailing by its very nature is hybrid, it’s the world’s oldest form of transport. There’s less of an impact on the environment [with sailing]. You may be burning some generator fuel on the larger sailing yachts, but it’s a lot less [than motor-powered]. I think the market will pivot to sail.”
He continues: “I think sailing yachts will track up and there’ll be less motorboats built, I believe people will pivot more to sail, because if you think about a person building their new dream yacht, their kids will be influencing them to take care of the planet. I think you’ll find the same number [of yachts overall] built in the future, but more sailing in total.”
These don’t appear to be empty words; you only need to look at the growth in staff at Oyster Yachts over the short three years Hadida has owned the company. All 27 bays across the business’s three yards are full, which has resulted in the need for more employees.
Some 420 new staff have been hired and there are plans to build in and sustain skilled workers through an apprenticeship scheme. There is also an expectation employee numbers will reach close to 500 once Oyster’s new Hythe facility near its Southampton yard is fully operational.
“We have a great number of skills required when building boats and we’ve gone out there and managed to already fill hundreds of positions, and we’re now aggressively setting up an apprentice academy, so every year we’ll take on 25 apprentices and that’ll be as a four-year course,” explains Hadida.
The Oyster Academy apprenticeship scheme will allow the company to scale its operation, he adds. “We can take on these young people and they’re working on boats, earning real skills in the real world which they can keep with them and I’m really proud of that.”
Hadida cites the recruitment problems faced by many other industries as one of the reasons for setting up the Oyster Academy, including a finite pool of skills as well as the location of his operations. “People have options for jobs elsewhere in other industries, but we’ve filled all of the posts in Southampton and Wroxham,” he says. “We’ve taken on a site in Hythe and we’re starting to fill those roles. You’ve got to be able to find the people to build the boats.”
The number employed by Oyster Yachts is an indication of both its growth potential as well as how serious Hadida is about its future. Currently there are four premises, including the main yard in Southampton as well as a new sister site over the water in Hythe where 70 staff have already been recruited. While its site in Wroxham, Norfolk, close to Oyster’s technology centre in Ashmanhaugh, also continues to grow with plans to build new vessels there.
In three years Hadida has turned a lossmaking business into one that has the potential to employ over 500 people and make good profits along the way. Its success is a result of many factors, including trust, a better customer experiences and awareness of climate change, But there’s one other component too.
“There’s no question that we’ve sold boats on the back of this [pandemic],” Hadida says. “People don’t want to be in a situation where they can’t escape in a bad situation, yachts are like villas and I believe the pandemic has made people revaluate where they want to spend their time. You can go from country to country to be in a safe space.”
Success also comes from a deep passion for sailing and Oyster Yachts that is embedded within both Hadida and Adamson. The former owns an Oyster 885 called Lush that he once co-owned with Eddie Jordan, which Adamson previously skippered around the world in the inaugural Oyster World Rally.
The pair are business-savvy and have a deeper understanding of the market and their customer base that is hard to achieve with a private equity owner. They also know that to ensure the brand remains it must be profitable and so they are focussed on sustainable growth. A new three-year strategy is in place which is intended to see Oyster Yachts grow further.
“Over the next three years we’ll focus on consolidating what we’ve achieved and at the same time continue to grow Oyster for the long term.” says Adamson.
“The growth battle for us is won and lost in production and that’s the truth. It’s all about how to increase the capacity of the business to cope with demand and maintain the values of quality, passion and craftmanship.”
And the environment plays a big part in the future of Oyster Yachts too, with both Hadida and Adamson clear on the fact they produce sail yachts won’t always be a strong enough eco message for the brand.
“We need to innovate the boats continuously, we’re looking in depth at sustainability and it’s very easy to greenwash. Therefore we will only design systems into the boats that make a real difference as opposed to being trendy,” Adamson adds.
But their prediction that sailing yachts will one day outsell motors remains to be seen, especially in the superyacht segment where makers are investing heavily in alternative fuels including battery power, but also hydrogen and other areas. It is, however, clear something is going right at Oyster Yachts.