Receivers cut one third of workforce at luxury boat company as founder considers bid

The receivers and managers of collapsed luxury boat company Riviera have slashed 157 employees, or about a third of the company’s workforce, as they try and trade out of trouble and get the company ready for sale.

Receivers Chris Campbell, Vaughan Strawbridge and Richard Hughes of accounting firm Deloitte told staff of their fate yesterday. Employee entitlements will not be paid due to a lack of funds in the business.

“Riviera will now be in better shape to weather the current economic conditions and to meet the ongoing demand for quality Riviera products,” Campbell said in a statement.

“Under the new structure, production and ongoing trade with suppliers will continue, including the orders placed during last week’s Sanctuary Cove Boat Show.”

The boat show, held last week, appeared to be a success for the stricken company, with reports suggesting it sold $17 million worth of products at the show.

Riviera collapsed in early May with debts of around $190 million. The receivers plan to restructure the business and keep it trading in an attempt to get a better return than would be available under a quick sale. 

One potential buyer is Bill Barry-Cotter, the founder of Riviera who sold his stake in the business to management buyout in 2002, pocketing around $140 million in the deal. 

He says he would be interested in buying the business and folding its production facility in with his own luxury boat operation, Maritimo.

But the sticking point is likely to be around price.

“The real problem is that have this perception of what they it’s worth, they are talking about $300 million, and that’s 10 times more than I believe its worth.”

Amazingly, Barry-Cotter has history of buying back businesses he founded. In the late 1970s he sold his first boat company for $3.5 million, only to buy it back 10 years later for the princely sum of $12.