Given the terrible state of the global economy, it’s hardly surprising that a luxury boat builder would collapse due to a lack of sales.
Riviera Group, which is based on the Gold Coast in the heart of Australia’s small luxury boating sector, has been on the skids for more than a year, as evidenced by a string of job cuts and the resignation of long-term chief executive Wes Moxley.
Moxley had been in charge of the company since 2002, when he led a $168 million management buyout from founder Bill Barry-Cotter. The deal was backed by two private equity firms, but it appears that the involvement of Gresham Private Equity and Ironbridge Capital caused friction at the top of Riviera.
Moxley, who has been silent since resigning in the middle of late last year, has now come out and declared that he quit because he couldn’t work with the private equity bean counters, who knew plenty about numbers but nothing about boats.
Barry-Cotter, who is reportedly worth well over $100 million, has also taken a shot at the way Riviera was run. “It was just a matter of time,” he said.
But Barry-Cotter can also sniff an opportunity, and has been very quick to announce that he wants to run the rule over his old company with a view to buying assets or the entire business – providing he can get a bargain basement price.
It’s a clever play. While Riviera’s value has been decimated in the last few years (one news report claims a recent audit valued the business at just $30 million) the widely-respected Barry-Cotter could be the best person to help restore the company’s reputation and brand.
If nothing else, Barry-Cotter might be able to pick up Riviera’s property assets for a song, which would allow him to consolidate this site and the site of his new boat building company Maritimo.
One day, the Riviera story will make a great business textbook case study. So far we’ve seen the founder bought out by his management team, the private equity investors swoop in and exert control, and a global financial crisis forcing the business into receivership.
If Barry-Cotter does manage to pull off a bargain, and even revive Riviera’s fortunes, it will be another gripping chapter in this luxury saga.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
