Alberto Galassi: my parents quarrelled over Riva

Mr Galassi, what challenges were you facing when you took over the company in 2014, and have you managed to meet them?

“To stop the bleeding,” restore profitability, and bring the company back to its rightful place among the elite of the yachting industry. When I was appointed CEO of Ferretti Group, the company was losing money. In 2014 losses amounted to €40 million, and in 2015 to €29 million. Yet by 2016 we had already achieved a net profit of €14 million PAT (profit after tax). The Group recorded a profit for the first time since 2008, thus accomplishing our second objective: returning to profitability. Last year we reported revenue growth of more than 10 percent, the financial value of our production rose to €623 million, and profit reached €24 million. In the first eight months of 2018, production amounted to €420 million in financial terms, which is 22% higher than in the same period of 2017. In 2018 we expect to bring this figure to €704 million. To achieve the third goal — placing FG among the industry leaders — we had to invest in new models, people, and production capacity. Above all, we needed to invest in people. The resources we had simply were not suited to the new challenges. The model range had not been refreshed for a long time; some models were five years old or more. This made it impossible to compete on equal terms. We invested over €80 million to launch 20 new models within two years. The results are already visible. At the recent Cannes Yachting Festival we unveiled five new yachts: Riva 110 Dolcevita, Custom Line Navetta 42, Custom Line 120, Ferretti Yachts 670 and Riva 66 Ribelle, and also announced the new Ferretti Yachts 720. In Monaco we presented the new 50-meter CRN Latona and shared details of major upcoming projects, including Pershing 140, Riva 50 m, and several collaborations with leading international designers.

In 2012 Ferretti Group came under the control of the Chinese holding company Weichai. The results of this acquisition are clear, but what did the new owners bring to the company besides €500 million in investment?

Weichai brought structure and discipline. These vital elements for the survival of any large corporation were not among Ferretti Group’s strongest qualities in its previous era. Today, for example, we are required to produce a 100-page report every month. In addition, we must secure a minimum annual budget of €30 million solely for the development of new models, research into new materials, and the introduction of new technologies. At the same time, our main shareholder does not interfere in either the creative process or our strategic decisions — in this respect, we retain full independence.

Speaking of strategy, most of the projects presented at the Cannes and Monaco shows are superyachts. Moreover, brands such as Pershing and Riva — traditionally associated with production boats — are now entering this segment…

From a strategic standpoint, the Group is placing ever greater emphasis on superyachts. Between 2015 and 2018, the Group introduced eight new yacht projects over 30 meters in length; between 2019 and 2021, we plan to present 13 new superyachts. In total, over the next three years the Group intends to build 66 hulls in the super- and maxi-yacht segment. At present, five new yachts are under construction in Ancona and will be launched in 2019: two Pershing 140s, a Riva 50 m, the 62-meter CRN 137, and the 79-meter CRN 135. We are committed to making our yachts larger, more modern, and better. Our strategy is to develop each brand independently while preserving its DNA. Over many years and multiple ownership changes, Ferretti Group was forced to reduce investment in new model development; yachts across different brands were effectively designed by the same team, making it extremely difficult to ensure design differentiation and avoid the dilution of brand identity. Today we apply a completely different, decentralized development approach and engage new designers. Our aim is for each designer to work with only one brand, ensuring that the aesthetics and philosophy of each marque remain distinct.

Within the Group, Riva’s move into the superyacht segment appears the most unexpected. Is the 50-meter Riva intended to keep clients “within the family,” so that when they decide to move up in size they do not look elsewhere?

If our aim were simply to keep clients within the Riva family, the journey from a Dolcevita 110 to a 50-meter superyacht would take far too long. The reason behind the creation of the Riva Superyacht Division is different: there are clients who want the Riva style on a much larger scale. We asked ourselves why not build a Riva with a steel hull, just as Carlo Riva did in the 1960s with Atlantique and Caravelle. There is clear demand for such yachts. One has already been sold, and negotiations are underway for a second. The Riva range can now extend from the small Riva Iseo all the way to a 90-meter megayacht with a gross tonnage of 3,000 GT.

Doesn’t this create internal competition between Riva and, for example, CRN?

CRN is about exclusivity. It works with the very best designers — for example Igor Lobanov, with whom we are developing a 75-meter project, as well as Espen Øino and Francesco Paszkowski. Riva is a completely different story. People who buy a Riva do not want another designer; they want design by Riva. It is more classical than innovative: mahogany, traditional bow and stern lines. Riva is a classic — a yacht you can recognize among hundreds of others. That is exactly what Riva clients are looking for.

What, in your view, attracts clients to Ferretti Group?

Style, beauty, financial stability, reputation, consistency, and outstanding after-sales service. We stay close to our clients and respond to their requests very quickly. Clients value this approach highly. They appreciate our style, they appreciate us — but above all, they trust us.

Can you recall the fastest and the longest yacht sale of your career?

The fastest deal was with a client from Russia. It took him just one hour to purchase a yacht in Ancona and shake my hand. The longest was in China, where negotiations with a client lasted more than a year. At the same time, I have an Italian friend whom I have been trying to convince to buy a yacht for a year and a half. With him, however, we simply enjoy discussing the purchase itself — which may never actually happen.

Does this mean clients from different countries require different approaches? What would you say, for instance, about Russian buyers?

They know what they want. They are experienced, and most of them are not buying their first yacht. Honestly, they are not very different from clients in other countries.

Are exclusive annual client events like the Private Preview a more effective promotional tool than traditional boat shows?

We need both, but I would say yes. These events are very private, very elegant, and very exclusive. We have a long waiting list of existing and prospective clients who want to attend. We host the preview at the Yacht Club de Monaco, which for that period is entirely at our disposal — only Ferretti Group yachts are allowed to berth at the quay. We do not use the event primarily as a sales tool; it is more of a gathering for friends, creating a sense of belonging and the feeling of being part of a large, close-knit family. In 2016 Elton John performed for us, in 2017 it was Duran Duran, and in 2018 we welcomed Sting.

Do the artists who perform at the Private Preview own boats themselves?

Elton John owns a Riva. Sting has a vintage Riva. Simon Le Bon [lead singer of Duran Duran — ed.] also owns a Riva. In the 1980s, Duran Duran filmed a beautiful music video for the song Rio aboard a sailing yacht. All our guests share a genuine passion for boats, but that is not why we choose them. We simply invite the very best.

Please tell us about your yacht, the Navetta 33 Telli. Why did you choose this model?

I previously owned a 33-meter displacement yacht, and there were many aspects I wanted to improve. Together with specialists from our development department, we therefore sat down and designed the Custom Line Navetta 33. Telli, the first hull of this series, embodies my vision of the ideal yacht of this size. And you know what? We got it right. Since the debut of this model, 12 hulls have already been sold. We have never had a more successful yacht. It is an outstanding calling card for FG.

What would you say are its most distinctive features?

An upper-deck salon with opening windows, and a “floating” floor that provides excellent noise and vibration insulation. It also offers a market-leading balance of size, volume, and onboard space for its price.

I’ve heard that when you were a child, your parents argued over a boat…

In 1974 my father bought a Riva boat. I was only ten years old, but I vividly remember the argument my mother started. With a house on the Adriatic coast, why buy a boat? My father patiently explained that with this boat our family holidays would be completely different. And that is exactly what happened. It was then that I realized how differently a boat can be perceived on paper and in real life. If you look at it purely in numerical terms, buying a boat or a yacht makes no sense at all. But once you experience it firsthand, everything changes. The pleasure we felt and the freedom the boat gave us were worth far more than the cost, and my mother eventually gave in. Forty-four years later, Riva is still part of our family.

What lies ahead?

Over the next five years, Ferretti Group will undergo major changes. We will open a new production facility that will allow us to increase capacity and build even larger yachts. At present, we have reached the limits of our capabilities, and to continue growing we need more space. Our goal is to achieve annual revenues of €1 billion. To reach this target, we will invest heavily in the engineering and design of new models, which will grow in size and reflect the latest technologies and design trends. We are constantly exploring new opportunities. Over the next five years, we will introduce a new brand — perhaps even two. Next year alone, we will launch eight new models.

What are your views on emerging technologies such as electric yachts or hybrid propulsion? Does Ferretti Group have plans in this area?

I do not believe in fully electric yachts, but I do believe in hybrids. From a technical standpoint, the issue of sufficiently advanced batteries has yet to be solved — they simply do not exist. The automotive industry faces the same challenge. Clients are not willing to compromise on comfort; on the contrary, they require more powerful generators to supply the many onboard systems, and we will not be able to eliminate diesel fuel entirely in the near future. Hybrid propulsion systems are a different matter. This technology will have a significant impact on the industry, and Ferretti Group will present its own hybrid solution in the near future. I am also confident that, in the foreseeable future, new materials will emerge that will allow us to build yachts that are lighter and quieter.