Stuart's Lentine Marine getting out of new boat business

By Ed Killer

Friday, September 26, 2008

STUART — One by one, sparkling new Pursuits and Hydra-Sports boats were
loaded by cranes onto flatbed trailers to be hauled away. Left in their
wake was a sign of the times.

Citing rising financing costs and lagging retail sales, longtime
Treasure Coast boat dealer Lentine Marine is shifting gears. No longer
will the retailer sell new boats. However, it will sell pre-owned boats
on consignment. Lentine Marine will also continue to service and repower
the full line of Yamaha Outboards and will begin carrying Suzuki Motors,
too.

The transition is a difficult one for Lou and Julie Lentine, owners of
one of the area’s best-known boat dealerships.

Lou Lentine said the floorplan financing arrangement with Textron
Financial Corp. became cost prohibitive. Floorplan is funding arranged
by a finance company or bank that loans a new boat to a dealer while it
sits in a showroom or on a lot.

“I’ve been in this business for 44 years and I’ve never seen it run this
way,” he said. “A year ago, we were paying our floorplanner prime rate
minus a quarter percentage point. But they got burned by a few dealers
and have been in a defensive mode since. Every month they have gone up a
percentage point or two. They were charging us 18-percent and were
talking about going to 20-percent.”

Lou Lentine said they chose to voluntarily have the boats removed from
their property on U.S. 1 and Gran Parkway in south Stuart. In May 2006,
Lentine opened its newly built sales and service center.

“It’s getting scary,” he said. “After watching the president’s speech
Wednesday night, it doesn’t look like it’s going to get better for
another year or more.”

President Bush addressed the nation Wednesday night on a $700 billion
bailout of the finance industry that would prevent a credit freeze on
mortgages and other types of lending.

Textron filed a lawsuit against Lentine Marine in July citing breach of
contract. Textron officials could not be reached for comment.

Lou Lentine said the slow economy is partly to blame for the change.

“We’ve lost a lot of our smaller boat buyers,” he said. “Masons,
electricians, plumbers — a lot of these guys are out of work and are not
buying boats.”

The Lentines are now banking on the consignment boat business and its
established reputation as a repowering center for Yamaha Outboards.Lou
Lentine said customers who have recently purchased a boat on consignment
have bought new motors, essentially making the boat new.

The couple admits their plans are a risk.

“I hope we made the right decision,” said Julie Lentine. “Time will tell.”

Lentine’s changes comes on the same day that KeyBank announced it is
pulling out of the marine lending business altogether. Considered one of
the world’s largest marine lenders, the Cleveland-based bank also said
it will no longer provide any recreational lending to dealers including
to the once-lucrative RV sector. KeyBank announced it will continue to
finance consumer purchases.

The news comes only a little more than a year after the banker announced
a loan volume growth of 100 percent in the first half of 2007. This
summer, Wachovia and Citizens Bank left the marine finance business and
GE Money stopped retail marine lending.

“Certainly if you look at the prospects for the (marine) industry over
the next 12 to 18 months, they aren’t very rosy,” Grant Skeens,
president and CEO of Key Recreation Lending, told Trade Only Today
marine industry online magazine. “Margins in retail continue to be thin
for lenders.”