On the Riviera


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Since 1980, Aus­tralian-owned Riviera has been build­ing lux­ury yachts for the plea­sure of in­ter­na­tional sea­far­ers. For much of that time, CEO Wes Moxey has been in charge of op­er­a­tions.

Wes joined Riviera in 1982 as a ship­wright, just two years af­ter the com­pany was founded in 1980. He was later pro­moted to pro­duc­tion man­ager in 1987, gen­eral man­ager in 1989 and then man­ag­ing di­rec­tor in 1998. Wes over­saw the move to the com­pany’s 14-hectare state-of-the-art Coomera fa­cil­ity in 2000. His ex­ten­sive ma­rine ex­pe­ri­ence and boat build­ing knowl­edge fu­elled his rise to the chal­lenge of CEO, and in 2002 he led the pri­vate eq­uity backed man­age­ment buy­out of the busi­ness. In 2008, af­ter 6 years of pri­vate eq­uity own­er­ship, he took a three-year sab­bat­i­cal from Riviera dur­ing which he de­vel­oped the Belize Mo­to­ry­acht line be­fore re­turn­ing to the helm wiser, re­freshed and ready for the next chal­lenge.

Wes’s be­gin­nings were as hum­ble as they come.

“I grew up in a dairy farm in New­cas­tle and did an ap­pren­tice­ship at age 15. I did very well as a ship­wright; build­ing steel ships and then moved to Queens­land for life­style choices. I was 21 and didn’t re­ally know what I was go­ing to do, so I did var­i­ous jobs when I first ar­rived on the Gold Coast. I had an un­cle in boat build­ing. I had a brother, who was a me­chanic, and I mucked around with that for six months and then started work­ing for my­self as a boat builder just do­ing gen­eral re­pairs. I did that for about a year and things got a bit quiet, so I went and saw my un­cle and he told me Riviera was look­ing for people.”

In Au­gust 1982 Wes started at Riviera. He worked in new prod­uct de­vel­op­ment and quickly found him­self with 22 guys work­ing for him in the var­nish shop and fitout con­tracts. They were con­tract po­si­tions but be­ing an am­bi­tious young fel­low, Wes was up for the chal­lenge. He was in­ter­ested in driv­ing the new prod­uct ban­ner and de­vel­op­ing his craft in boat build­ing.

Af­ter the stock­mar­ket crash of 1987, a power strug­gle en­sued at Riviera and Wes found him­self in the po­si­tion of pro­duc­tion man­ager. Not too far down the track, he was ap­pointed gen­eral man­ager and then when the boss left to com­pete in a race in Europe he asked Wes to take on the man­ag­ing di­rec­tor role.

“Bill the owner said, ‘I want you to be man­ag­ing di­rec­tor’. I said what for? He said, ‘I’m ‘go­ing to’ race my boat in Europe and if any­thing hap­pens I want to know that the place is okay’.

“We agreed on some­thing that I was happy with and that I would do it my way with my team. Bill al­ways be­lieved that the cream al­ways rises to the top and if you want some­thing badly enough, you will take it. I guess that suited my style and at­ti­tude and I just worked hard.”

Since then Wes has seen ev­ery up and down a busi­ness can go through. He was in charge dur­ing the 1991 mar­ket crash, the rise of in­ter­est rates, the re­ces­sion we had to have and the US lux­ury tax. In 2000 he led the Coomera fa­cil­ity build and over­saw the con­struc­tion, while man­ag­ing what had be­come an $85 mil­lion com­pany.

The move to Coomera trans­formed Riviera.

“We were spread across three sites be­fore this; we had to truck a lot of stuff around. Mov­ing here was a huge feat though. First of all I had to build it, and I built ev­ery­thing so it was lit­er­ally sort­ing out where ev­ery power point went, how it was wired, what the spec was and mak­ing sure the builder didn’t rip us off. The chal­lenge was from the owner, he said ‘well, if you want it, you ‘gotta’ build it out of cash flow. I’m not go­ing to bor­row any money. So, that’s what we had to do. We had to grow the com­pany and build in cash flow and prof­its. I was for­tu­nate to have a great team that could drive the busi­ness to achieve this goal. We achieved it and went straight from an $85 mil­lion turnover to $125 mil­lion and that made our ex­port busi­ness very strong.”

Wes de­scribes Riviera as a big com­pany with a small mind. By that he means Riviera is not a cor­po­rate com­pany; it is very hands on in ev­ery facet of build­ing a yacht that people can take plea­sure in. As such they have won awards for train­ing and in­no­va­tion.

“We just know our craft well, how to build boats and do it ef­fi­ciently in a high cost area.”

Riviera is renowned for its qual­ity crafts­man­ship and it’s cus­tomer ser­vice.

“We en­gage with our people. Our cus­tomers are wealthy and they are time poor, and the time on their boat is pre­cious, so when that gets dis­turbed or they have a bad ex­pe­ri­ence they’re not happy. My job is to make sure that they are happy. That’s part of our people strat­egy, and you know, as we look for­ward in re­build­ing the com­pany that’s very much where my fo­cus is: prod­uct the people and the prof­its. The three Ps.”

An­other P that Wes had to learn to deal with was pri­vate eq­uity. The steep­est learn­ing curve Wes has faced is when pri­vate eq­uity came into the com­pany in Oc­to­ber 2002. Wes wanted to make it clear that be­fore they wrote the cheque, he wasn’t go­ing to be told how to build a boat.

“I said we are very, very good boat builders; we are very good at our craft and what we do, where we’re weak is in our fi­nan­cial sys­tems and pro­cesses. We need good fi­nan­cial foun­da­tions on which to grow if we want to con­tinue to grow. We don’t have a very big or strong fi­nan­cial team on site, that’s the area that needs bol­ster­ing not build­ing boats.”

Six CFOs in six years didn’t help the cause. How­ever Wes got a good look at what the CFOs were meant to do and he came to un­der­stand the ex­pec­ta­tions of pri­vate eq­uity groups. The sim­i­lar­ity to pub­lic own­er­ship when you have pri­vate eq­uity in­vest­ment is un­canny. So a bal­ance had to be reached be­tween the cor­po­rate gov­er­nance and fi­nan­cial reporting de­mands of the in­com­ing pri­vate eq­uity own­ers and the his­tor­i­cal way the busi­ness had been run from the en­tre­pre­neur­ial mind­set of Wes and Riviera’s out­go­ing owner, both of whom held sim­i­lar views.

“We come from sim­i­lar back­grounds. You work hand in glove and you can have a fairly short dis­cus­sion about what you are go­ing to do, and you just get on with it. There’s no pa­pers writ­ten or documents, we never had a busi­ness plan be­fore 2002. We were a $125 mil­lion dol­lar com­pany with a very strong bot­tom line and we had no busi­ness plan, be­cause we just knew what we were go­ing to do. That’s how it was, but pri­vate eq­uity comes in and of course that’s not tol­er­a­ble; you have to have a busi­ness plan, an HR depart­ment and you’ve got to have all these other things to be a mod­ern and saleable com­pany, be­cause all they worry about is an exit.”

Chang­ing from gen­eral man­ager to man­ag­ing di­rec­tor didn’t af­fect Wes, be­cause Riviera still had the same own­er­ship struc­ture. Chang­ing from man­ag­ing di­rec­tor to CEO with pri­vate eq­uity own­er­ship was a defin­ing mo­ment.

“It’s fair to say that re­al­is­ti­cally a

cheque was handed over and the busi­ness was born. The way we con­ducted our­selves from that day for­ward, for the next six years, be­fore I left in 2008, was far more of a cor­po­rate struc­ture, but we also grew the busi­ness in that six year pe­riod from a $125 mil­lion to a $410 mil­lion.”

Growth was spec­tac­u­lar, but Wes could see a change com­ing. There was go­ing to be a down­turn and he wanted to con­sol­i­date the com­pany’s po­si­tion rather than con­tinue on a growth strat­egy.

“I could see the writ­ing on the wall, that there was a crash com­ing well be­fore the GFC. I dis­agreed with the di­rec­tion and where we were headed and wanted to con­sol­i­date our po­si­tion rather than to keep grow­ing, but that doesn’t sit well with the pri­vate eq­uity group.”

So Wes left. In that time he had achieved a Na­tional Em­ployer of the Year award. He says his great­est achieve­ment was hav­ing 180 ap­pren­tices on site and their own train­ing fa­cil­ity.

“We had 14 high schools feed­ing us school-based ap­pren­tices, and we started that back in 1996 be­fore it be­came trendy and be­fore govern­ment un­der­stood it. We prob­a­bly broke all the rules to get it go­ing, but we started with four and we ended up with 180. We never put an ad in the paper for ap­pren­tices; we got them from school, so I would say that was our great­est achieve­ment. Not just train­ing them as boat builders, en­gi­neers, fiber glass tech­ni­cians, up­hol­ster­ers, you know we had all of the trades cov­ered, but not just in train­ing them, but two hours a month, we had a pro­gram de­vel­oped for them called Pro­pel and it was talk­ing to them about life skills: buy­ing a house, ne­go­ti­at­ing with the bank, trad­ing shares, bud­get­ing, plan­ning. Se­nior man­age­ment would spend two hours a month go­ing through a set pro­gram and talk­ing to these young ap­pren­tices about their life skills. See­ing those young people buy­ing houses at 20-21 years of age and see­ing them go on to be man­agers do­ing MBAs, do­ing cer­tifi­cates in man­age­ment, I’m quite happy. People say you train them and then they leave, but as an in­dus­try leader I felt a sense of re­spon­si­bil­ity to train and I do it again now.”

In the three years Wes spent out­side Riviera he bought a small 100-acre farm in north­ern New South Wales to give his two boys an un­der­stand­ing of where he grew up and what he did. He was tired and at the time and felt he had given as much to Riviera as he could. He went back to his roots and spent as much time as he could down on his farm with his wife and kids. His wife had also worked at Riviera. She was there be­fore Wes and has a strong un­der­stand­ing of what it takes here to be suc­cess­ful. So she clearly un­der­stood Wes’s need to find other roles.

AB Pat­ter­son Col­lege is where Wes went to school in Queens­land and they chased him to be on the Board, where he spent three years.

“That was a great thing as a drop off dad to get into. I came out with a broader un­der­stand­ing of ed­u­ca­tion, how com­plex it is to­day and how dif­fi­cult it is to run a pri­vate school from the busi­ness and the ed­u­ca­tional side. I en­joyed that a lot. I also joined the Grand Banks Board in Sin­ga­pore for about a year.”

Grand Banks is an­other fa­mous boat­ing com­pany and it stoked the fires in Wes’s heart to get back into build­ing.

“I could see that I couldn’t af­fect the change in Grand Banks quickly enough, and then my wife said, ‘you’ve got too much knowl­edge, you’re too young, why don’t you do it yourself ’.”

Wes formed a part­ner­ship with an­other vet­eran ship­builder Lee Dil­lon and the pair went about cre­at­ing a lux­ury mo­to­ry­acht brand.

“I didn’t want to com­pete with Riviera be­cause I still had a lot of friends there and I didn’t want to do what a lot of people do and build the same prod­uct, so we went out of our way to build a prod­uct that didn’t com­pete with Grand Banks or Riviera, but build some­thing that was to­tally dif­fer­ent to those prod­ucts.”

It was an ex­pres­sion of what Wes and Lee love in a boat: a blend of the old and the new. New be­ing the tech­nol­ogy, the fin­ishes and the qual­ity. Old be­ing the retro styling.

“If you look at all the car com­pa­nies like Masser­atti, Astin Martin, VW Bee­tle, all of those com­pa­nies have gone back to yes­ter­year for its in­spi­ra­tion to­day. And we wanted that same sort of thing. We didn’t want to be a cheap prod­uct, we wanted it to be an ex­pres­sion of who we are, what we are and what we love.”

The Riviera and Belize worlds merged into one when Riviera came out of re­ceiver­ship in 2012 and re­turned to pri­vate own­er­ship un­der the stew­ard­ship of Rod­ney Longhurst, the man­ag­ing di­rec­tor of Longhurst Ma­rine Hold­ings, and Rod­ney asked Wes to re­turn to Riviera as CEO.

Wes re­turned to Riviera through a sense of re­spon­si­bil­ity.

“It’s a tragedy when you put 26 years, more than half your life of blood, sweat, and tears, into some­thing and you see it fall. To come back and res­ur­rect a great brand, a great com­pany, sup­port great people and again grow and train is why I’m here. My re­spon­si­bil­ity this time around is very much

“Hav­ing built the com­pany through the 1990s and into the 2000s, I know the for­mula for suc­cess, how to be­have, how to op­er­ate, the style and how many people can be here.”

around en­sur­ing that the man­age­ment and the foun­da­tions are strong and the suc­ces­sion plan­ning is right.” Wes has gone back to ba­sics. “Hav­ing built the com­pany through the 1990s and into the 2000s, I know the for­mula for suc­cess, how to be­have, how to op­er­ate, the style and how many people can be here. To me it’s just in­tu­itive and easy. Whereas deal­ing in a pri­vate eq­uity world ver­sus a pri­vate own­er­ship world, was very, very dif­fer­ent. It’s like oil and wa­ter, they’ll never mix.”

Un­for­tu­nately on his the first day back in 2012 he had to let 80 people go. Since the takeover, an­other 70 have gone.

“We have to run lean, we’re in very un­cer­tain and dif­fi­cult times as the global econ­omy re­cov­ers. We need con­fi­dence in the econ­omy, we need con­fi­dence in the gov­ern­ments, we need con­fi­dence in lead­er­ship and I think that’s the thing that’s un­der­stated by the cur­rent govern­ment. The change of govern­ment brought con­fi­dence to the busi­ness com­mu­nity and this com­mu­nity gen­er­ates the wealth for oth­ers. And when you haven’t got that con­fi­dence it’s dif­fi­cult for us to sell boats, be­cause no one needs a boat. So people need con­fi­dence to spend. And that’s where we are at the mo­ment.”

De­spite this, the cul­ture is still strong and people are still com­mit­ted. They be­lieve in the brand and they be­lieve in Wes, whose vi­sion is to be in ex­cess of $100 mil­lion in rev­enue in the next three years. He also be­lieves they will be em­ploy­ing around 500 people. The com­pany is cur­rently in a growth phase, hir­ing people again and has re­in­stated the train­ing and ap­pren­tice­ship pro­gram.

“I have no de­sire to take it back to the boom of $400 mil­lion and 1300 people. That’s not my pas­sion to be the big­gest. The fo­cus is on build­ing a high qual­ity prod­uct. That’s what we did with Belize and that’s where we’ve taken Riviera. Since we’ve been back, we’ve re­ally pushed the qual­ity bound­aries rather than the size bound­aries. There’s noth­ing bet­ter than hav­ing a high qual­ity prod­uct that is sought af­ter and people are pre­pared to wait for it. I think that’s re­ally the driv­ing force for where we will be in the fu­ture.”

Wes Moxey

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