The sort of person who owns a Ferretti yacht appreciates Old World sensibilities and the latest technology, according the legendary Italian company’s CEO Fulvio Dodich. They are also the sort of person who carries more in their back pocket than sunblock and a strip of seasickness tablets. They might not necessarily be as rich as Saudi real estate and oil magnate Mohammed Hussein Al Amoudi, who paid US$17m for a 112-footer to float around Sweden’s Lake Mälaren, but they must at least be able to rustle up the US$1.5m for an entry-level craft.
“An indulgence, yes, but once a successful person has the Bentley or the Aston Martin and the villa, a Ferretti yacht is the logical next step,” reasons Dodich. “What can you buy after a home with the most amazing view but a beautiful ‘floating home’ which has endless different amazing views? Our customers are not simply buying another luxury item — they are buying into a lifestyle.”
The Ferretti lifestyle, as glamorously portrayed by customers such as Brigitte Bardot and Richard Burton and, more recently, P. Diddy and J-Lo, is increasingly enrapturing the growing number of self-made millionaires propelled by bonus bonanzas and hedge fund windfalls. The luxury super yacht — as cruisers longer than 24 metres are known — is now the fastest growing sector of world’s boat building industry and Italy’s manufacturers are leading the way. While Italian shipbuilding is expanding at a rate of 1% a year, super yachts are powering ahead at 9%.
And Ferretti is in pole position. Not only was it Italy’s top company in 2006 in terms of growth (and the 28th out of all European companies), but it found itself the subject of a bidding war last October which dramatically scuppered long-standing London flotation plans. UK private equity house Candover Partners finally trumped French rival PA Partners, by paying US$2.2bn for a 60% stake in Ferretti, a deal that, according to chairman Norberto Ferretti, will enable the brand to expand farther and faster. The belief was that Ferretti was considering an additional listing on the Dubai International Financial Exchange, underlining the importance of the Gulf to the luxury industry, when Candover swooped.
Permira had already listed the over-performing company in 2000 but took it private again two years later, when the stock market was being unduly jittery about the demand for expensive boats in the wake of the terrorist attacks in New York.
Norberto Ferretti and his brother Alberto started out selling high-end yachts in the 1960s, but quickly they branched out manufacturing their own luxury vessels; their first, the Khamsin, was a fishing boat refitted as a cruiser. They later made the Altura 33, the world’s first motor sailer to be made from fibreglass.
Over the next decade Ferretti Group ramped up its yacht building operations, launching in 1989 a research and development division, specialising in engineering, to give their shipyards an edge. 15 years on, the engineering division, together with the Advanced Yacht Technology centre, located in Forlì at the group headquarters, employs more than 100 specialised engineers and is one of the world’s most modern research and naval design centres. The engineers, explains Dodich, collaborate with 54 external designers and architects, and he attributes Ferretti’s continuous success to attention to design and exclusivity, combined with constant technical innovation and progression.
Ferretti has already gobbled up other yacht makers, such as the dolphin-cute Riva line, Pershing — which makes 90-footers with padded decks and bridges for sunbathers who have US$9m to spend — and the personalised Custom Line. Meanwhile, Ferretti’s Mochi Craft, with its stitched leather upholstery and teak fixtures, is a snip at US$3.9m. Last year the company’s combined sales rose 18% to US$1.1bn while net profit rocketed 118.8% to US$33.7m.
“Boating is in an Italian person’s blood,” says Dodich. “Our country extends into the Mediterranean and we have a long history of marinas and a love of boats. Obviously the beauty of Italian design is also very well-known around the world but while we may make the Ferrari, we also make cars in Italy that are not so good!
Italian yachts, on the other hand, capture centuries of skills on the technological side and incorporate stylishness. Ferretti yachts are particularly sought after because we have always tried to make boats to be used not simply shown off in marinas. A lot of work goes into the design but we have been incredibly selective about the materials and the components we use. We have been developing engines for more than 40 years. The workings of the vessels are technologically very advanced."
Perhaps not surprisingly, the majority of Ferretti boats are bought by people living in the Mediterranean countries (27%), with 22% of customers in Europe and 12% in the US. South America, the Middle East and Asia-Pacific account for the other buyers.
One can certainly see why the water looked so inviting for the discreetly acquisitive Candover. While the global luxury yacht market is currently worth around US$14.3bn, there are more than 900,000 people worldwide earning more than US$5m a year — realistically, the minimum requirement to enjoy the Ferretti lifestyle. Moreover, according to Merrill Lynch, the number of people worldwide with US$1m or more to spend a year on premium luxury goods is rising by 7% annually. The analyst firm predicts that by 2009 there will be around US$2.2bn sloshing around to buy the sort of status symbols that make Cartier watches look like mere trinkets.
Demand for super yachts is growing in the “under exploited” US, Russia, China — where Ferretti hopes to double its sales in 2007 — and India. Last year Mumbai-based Drishti Marine Solutions, which represents Ferretti among other brands, sold 15 super yachts with reports that bigger deals for 2007 are on the verge of closing.
Aashim Mongia, founder of Mumbai’s West Coast Marine, says that with many more corporates coming on board, the forecast is even brighter. “After you’re done with a palatial mansion, a car, a private plane — naturally, the next choice is a yacht. A private yacht that has an element of fantasy.”
Unsurprisingly, Dubai — where, for many high-spending consumers, fantasies come true — has propelled the Middle East into one of the world’s fastest growing leisure boating markets. Here, developers have launched a host of innovative projects and waterside developments and the emirate has taken advantage of its strategic location between Europe and Asia, to become a crucial port of call for the global maritime industry.
Dubai Maritime City, the man-made 227-hectare peninsula that aims to become an iconic hub for the global maritime industry, will benefit from the relocation of Jadaf Dubai, the oldest ship repair yard in the Arabian Gulf region. When completed, Jadaf Dubai will be a one-stop shop for repairs and maintenance, yacht manufacturing and services. It is envisaged by developers that the move will usher in a new golden nautical era for a glittering environment.
Meanwhile, the nearby Dubai Marina will eventually provide nearly 1000 extra berths. The offshore island projects, including Nakheel’s Palm Islands and the World, will incorporate several marinas with more than 10,000 berths, and Dubai Festival City will include a large marina. An important factor in the development of the Gulf marinas is their link with the new lifestyle now evident in the Gulf of shopping malls, restaurants and boardwalk shops. Many new marina developments in Kuwait and the UAE incorporate these features and mirror the latest trends in the US and Europe.
Although 30% of the world’s mega yachts are owned by Gulf Arabs, according to marine industry analyst Mike Derrett, most boats are moored in the Mediterranean. The new lifestyle marinas, however, are expected to bring an increasing number of leisure boats to the market to be enjoyed at home.
Indeed the first Duboats Beneteau Regatta took place last year at the Dubai Offshore Sailing Club (DOSC), bringing together owners of 22 Beneteau sailing boats from throughout the Gulf to participate in a race. Companies sponsoring the event included the Bin Zayed Group, DOSC, Jotun, Lamborghini, Boursin and the UAE Sailing Association. The Duboats’ team was led by Christophe Vanek, one of the most seasoned sailors in the UAE, with three America’s Cup campaigns and the inaugural Maktoum Trophy under his belt.
Duboats, which boasts a trade in head-swiveling luxury yachts as well as smaller powerboats and sailboats, was launched in January 2003 by HH Sheikh Khalid Bin Zayed Al Nahyan, fuelled by his own passion for sailing. As well as Ferretti and Beneteau, it handles three other leading brands: Lagoon, Pershing and Bertram.
Significantly, Maritime City is the gold sponsor of the Dubai International Boat Show, which will be held March 13-17 at the Dubai International Marine Club in the Mina Seyahi hotel. The 15th DIBS is set to be the largest ever, attracting exhibitors and visitors from around the world. Dubai World Trade Centre, the organiser, reports an increase of more than 35% in the number of boats, external displays and increased exhibition space for equipment manufacturers and suppliers. The 2006 event also saw record numbers of visitors from Kuwait, Qatar, Bahrain and Saudi Arabia, plus high numbers from India, Russia and Pakistan.
The March show also promises to be the most international event yet, with four of the world’s leading global boat groups — the British Marine Federation, Mauritius Marine, The National Marine Manufacturers America and UBI France, debuting in addition to regulars such as AIMEX from Australia; DBSV from Germany; UCINA & ICE from Italy; HISWA from The Netherlands; NZ Marine from New Zealand; and the Isle of Wight Chamber of Commerce from the UK.
“It is always a golden age for high-end business,” Dodich laughs. “When business is good for many of our clients, they buy a yacht to celebrate and when business is not so good, they buy to cheer themselves up.” He says that while the sweep of Ferretti’s customers has grown, their profile has not changed at all. “Around 95% are businessmen or industrialists — and they usually are men — who look for the best quality in everything they buy, and want everything to fit in with their lifestyle. Often our customers collect old cars: Bentley, Aston Martin, Ferrari; there’s normally one Mercedes S-class in the family. When we started off we assumed that the boat’s performance was the major draw but it was the ambiance and the finish. We then had to educate people to appreciate all the technical capabilities.”
Dodich, who drives a black Porsche Cayenne, attends a few boat shows a year — this year’s DIBS will be an important event for Ferretti — and hosts a few ‘privilege days’ in Monte Carlo or Cannes in the South of France for dealers and a handful of particularly high-rollers. Little is spent on advertising because, as Dodich puts it “What can we show? We’re not selling a product. We’re selling lifestyle”. He also estimates that there are only four million potential customers in any year and there is a three-year waiting list for the boats.
Says Dodich: “Dubai has become more important for us over the last five years — we introduced a new dealership there in 2005 — but the Middle East is quite different from Europe in the sense that some buyers see the boat shows as a place to negotiate over price. The majority of the boats we sell to Middle Eastern clients are kept in Europe.”
But surely the sort of person who owns a Ferretti is used to simply snapping his fingers, and getting what he wants instantly? “That’s the beauty of luxury yachts,” Dodich confides. “The buyers are not used to waiting for anything so the pleasure is heightened.
When the big day arrives and people finally get their first boat it is the start of an era for them: They enter another world. The Ferretti experience goes beyond mere ownership; it is a shared lifestyle, a passion for new experiences. As soon as people get delivery of their boat they start to think about their next one. And of course the next one is always bigger.”
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