Cavalier Yachts – Promising Start but Too Many Captains

Cavalier Yachts made history in New Zealand in the 1960s through the 1990s by Peter Smith and John Salthouse. Half a dozen or so production models were offered over that period, including the Cavalier 30, which featured an open transom. Cavalier Yachts made among the most production sailboats and yachts of any company in the Southern Hemisphere during its lifespan.

A Trail of Ownership

1966: Cavalier Yachts is founded by New Zealander Bruce Clarke.
1972: Clarke sells the company to local businessmen Bruce Farr and Mike Mahoney.
1982: Farr and Mahoney sell Cavalier Yachts to a group of investors led by Auckland businessman Bill Lloyd.
1985: Lloyd sells the company to a consortium of investors led by Auckland businessman David Broadhurst.
1989: Cavalier Yachts is acquired by New Zealand businessman Ron Copeland, who also owns yacht builder Lidgard Yachts.
1990: Copeland sells Cavalier Yachts to Australian yacht builder Northshore Yachts.
1991: Northshore Yachts goes bankrupt, and Cavalier Yachts is sold to New Zealand businessman Tony Wood.
1994: Wood shuts down Cavalier Yachts due to financial difficulties.

Why Did Cavalier Yachts Fail?

There are several factors that contributed to the eventual failure of the company:

Financial difficulties: Cavalier Yachts struggled with financial difficulties throughout its history. The company was highly leveraged and relied heavily on bank loans to finance its operations. When interest rates rose sharply in the early 1980s, Cavalier Yachts found it increasingly difficult to service its debt, which put a strain on its cash flow and limited its ability to invest in new product development.

Competition: Cavalier Yachts faced stiff competition from other yacht builders in New Zealand, such as Bruce Farr, Alan Wright, and Ron Holland. These companies were able to offer similar quality boats at lower prices, which put pressure on Cavalier Yachts to reduce its prices and margins.

Changing market conditions: The global yacht market underwent significant changes in the 1980s and 1990s, with a shift towards larger, more luxurious boats. Cavalier Yachts, however, continued to focus on smaller, more affordable boats, which limited its appeal to a growing segment of the market. Perhaps Cavalier suffered a similar fate – being overtaken by newer models – as Watarah from neighboring Australia.

Management issues: Cavalier Yachts had a history of management instability, with a number of changes in ownership and leadership over the years. This led to a lack of continuity in the company’s strategic direction and a failure to invest in new product development.

In 1979, the New Zealand government instituted a 20% sales tax on boat builders. The resulting prices Cavalier Yachts had to charge made their products less competitive than international rivals, and also contributed to the demise of the company.