Coming in From the Storm
Flashback to Rodriguez story.
On a sunny afternoon in early June, a group of gatecrashers interrupted a party aboard the luxury yacht “Atlas,” berthed at Golfe-Juan, near Marseille.
The uninvited guests were police officers, armed with search and arrest warrants. Acting on information gathered in a two-year investigation into allegations of money laundering and slot machine trafficking, they detained the host, Alexander Rodriguez, then chairman of the Rodriguez Group, a Cannes-based luxury yacht dealer, and some 20 guests.
Mr. Rodriguez, 39, was charged with a laundering offense under gambling and extortion laws, harboring criminals and misuse of corporate assets, said Philippe Dorcet, a judge in the special organized crime unit handling the case in Marseille. Mr. Rodriguez has since been released on bail but remains under investigation, Mr. Dorcet said, responding to questions by telephone.
Among others arrested in the raid were Bernard Barresi, a fugitive sentenced in absentia in 1994 to 20 years in prison for his part in a 1990 armed robbery of an armored vehicle; Gérald Campanella, another fugitive, convicted in 2005 on a charge of organized fraud and sentenced to five years in prison; and his brother Michel Campanella, a nightclub owner in Marseille and Miami, suspected of involvement in organized crime activities.
Mr. Rodriguez resigned as chairman of the Rodriguez Group while in detention, handing management back to his father, Gérard Rodriguez, who founded the business in 1972.
Representatives of the company and the Rodriguez family declined to respond to requests for comment on the affair, which shook the clubby Côte d’Azur world of luxury yachting in the run-up to the Cannes and Monaco yacht shows this month.
The Rodriguez Group is one of the leading businesses in international yachting, providing premium yacht brokerage, charter, maintenance and management services. For years, it had exclusive representation of the Mangusta and Leopard lines of sleek Italian-built motor yachts.
In 2001, it bought Camper & Nicholsons International, specializing in the sale, charter and construction of high-end yachts, one of the best-known names in the sailing universe and heir to a tradition of bespoke boat building stretching back to the mid-19th century.
Neither the company nor any of its units is under investigation. Still, the resignation of Mr. Rodriguez as chairman left a company already buffeted by recession in even more troubled waters.
“The group was a leader in the sport-boat market. When the market was high, they were a force to be reckoned with,” said Jonathan Beckett, chief executive of Burgess, a leading brokerage and all-service luxury yachting company in London. “But they were badly hit in the financial crisis. Now with this arrest, they are just a player.”
Legend has it that the elder Mr. Rodriguez, a Spanish yacht captain, migrated to France in the early 1970s with just 300 pesetas — then worth about $5 — in his pocket, and built up the company from modest beginnings as a maritime sales and consulting agency.
A publicly traded company since 1998, Rodriguez shares on the Euronext market closed last week at €5.46 a share, valuing the company at €68.3 million, or $89 million.
While still substantial for a family-run business, that compared with a peak value of €80 a share in 2001.
When the financial crisis struck in 2008, “the market for sports boats was hardest hit, because that product appealed to nouveau-riche bankers with big bonuses, those who could afford a $2-to-10-million exotic playboy-type boat,” Mr. Beckett said.
“Like in the automobile business, there was increased capacity in the yachting business for an almost insatiable demand,” he added. “Then suddenly the bottom dropped out of the market.”
In April 2009, with sales at a near standstill, debts mounting and the company’s stock sliding below €3 a share, the Rodriguez Group filed for protection under French receivership laws.
“At the time of the filing, the value of the group’s unsold inventory was €120 million, with about €200 million in bank debt,” said Jean-Paul Poulain, a lawyer in Paris retained by the company to represent its interests in the receivership proceedings.
The restructuring took a year. But in April this year, the company’s restructuring plan won court approval and the group started to claw its way back to normal business.
Then came the arrest of Mr. Rodriguez, and the company’s stock market value slumped again, losing almost 10 percent of its value overnight.
Still, the tide may finally have turned. While the company has lost its exclusive sales rights to the Mangusta and Leopard yacht designs, business has started to tick higher as memories of the recession recede.
The company last month reported revenue of €24.8 million for the three months to the end of June, up 17.7 percent from a year earlier, with yacht sales rising 20.8 percent to €15.7 million, and services revenue rising 12.7 percent to €9.1 million.
“We feel a market comeback. We have requests for sea trials once again. People are reconsidering the group as able to sign new contracts,” Mr. Poulain said. “Since last April, the strategy of the group was to sell off existing inventory. Today, new orders are coming in.”
Mr. Beckett, of Burgess, said that for the luxury yacht market as a whole, “the crisis is not over, but it is no longer in free fall.”
“People are spending again — but they are much more price sensitive,” he added.
While Mr. Rodriguez focuses on overcoming his legal troubles, the company is banking on the economic rebound to help it sell its newest design.
“The group’s new Ital Yacht is the model we hope will rescue the company out of the crisis,” Mr. Poulain said.
Meanwhile, on the management front, “the group plans to launch a recruitment campaign to fill the presidency from outside,” he said.
Source: The New York Times
Category: Brokerage News
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