Why the 'Cyclos III' auction worked
Sometimes, selling a yacht by blind bid auction makes sense, as was the case with the recent successful sale of the 42m Royal Huisman, 'Cyclos III', with Andrew Winch interiors, delivered in 1990.…
News arrived this week of the sale of the beautiful 42m Ron Holland-designed Royal Huisman ketch Cyclos III with an early suite of interiors by Andrew Winch Designs. This is a famous yacht that, when she was delivered in 1990, earned enormous praise for her combination of size, manually handled rig, and interiors, which were among Winch’s earliest yacht designs.
More than for the sale of the yacht itself, which was for an owner who is retiring from yachting after 35 years, SuperyachtNews.com's interest was piqued by the fact that she sold successfully via auction.
“Having done a number of them, we know it’s so important to understand how yacht auctions work,” says Mark Duncan, group commercial director at Yachting Partners International (YPI). “We know they’re not like car or property auctions; there’s a different momentum to them. And then sometimes an auction is for a seller who is desperate; for whom the sale is more important than the price. Banks for instance, use them occasionally to shift inventory they’ve been left holding as collateral. In those situations, boats get sold for next to nothing.”
But, Duncan says, there is a way to use an auction to sell a yacht successfully, and the auction for Cyclos III is an example of that. “What successful auctions do is focus people’s attention on a yacht,” he says. “Providing you have a decent reserve, and the seller is flexible—they understand the trade off between a quick sale and a long wait to achieve an ideal sale price—and you can generate interest, you can get these yachts sold.”
Cyclos III is as well known for her Andrew Winch interiors (top, middle) as she is for her manually-handled ketch rig
Cyclos III had been on the market for two years, and her broker Will Bishop at YPI had promoted the yacht to his and the company’s network of contacts. This spring, however, the owner decided he wanted a sale, and he wanted it quickly. Being a well-known yacht meant that there was both awareness and interest, but as Duncan says, the potential buyers weren’t getting excited about the idea of buying her. What the auction announcement did was underscore the fact that this iconic and beautiful yacht was going to sell no matter what. The message was: 'Either buy her now or lose the opportunity.'
“We’ve done blind auctions before and they don’t always work… you don’t always get to a reserve,” Duncan admits. “I think the reason why it worked for Cyclos III is because the yacht itself is a known commodity by a top shipyard and a big name designer in quite a niche market of top shelf superyacht sailboats. There’s a finite market of owners who would buy a yacht like this… you have to really, really, really be into yachting to buy a big ketch like this; in many ways that helped us focus the message. So there were a number of factors there that helped us.”
The word went out through YPI’s database as well as through other brokers’ databases and that of Barry Rogliano Salles (BRS), YPI’s global shipping services parent company. The owner had set a reasonable reserve (her guide price was €2,750,000). “It was the right reserve at the time,” Duncan says. “Three or four years ago, he might not have wanted to do that as he was still enjoying using her, but it was the right time, right place. That got it done."
Bids were received up until the extended closing date of 14 May. In the end, she made her reserve happily, but as Duncan says, an owner could always want more.
“There are lots of people, who rightly or wrongly see an auction as bargain basement time and figure they can pick up yachts for next to nothing, so auctions have been tarred with that brush,” Duncan says. “But it worked really well for Cyclos III. The owner was satisfied. I think part of the reason it worked—and this is a really good sign—is that we have some really willing buyers coming into the market. It’s great out there at the moment. Prices, margins and commissions are still down, but at least people are buying and selling boats again. I think the customers got bored of hanging around… they’re back in the game.”
More than for the sale of the yacht itself, which was for an owner who is retiring from yachting after 35 years, SuperyachtNews.com's interest was piqued by the fact that she sold successfully via auction.
“Having done a number of them, we know it’s so important to understand how yacht auctions work,” says Mark Duncan, group commercial director at Yachting Partners International (YPI). “We know they’re not like car or property auctions; there’s a different momentum to them. And then sometimes an auction is for a seller who is desperate; for whom the sale is more important than the price. Banks for instance, use them occasionally to shift inventory they’ve been left holding as collateral. In those situations, boats get sold for next to nothing.”
But, Duncan says, there is a way to use an auction to sell a yacht successfully, and the auction for Cyclos III is an example of that. “What successful auctions do is focus people’s attention on a yacht,” he says. “Providing you have a decent reserve, and the seller is flexible—they understand the trade off between a quick sale and a long wait to achieve an ideal sale price—and you can generate interest, you can get these yachts sold.”
Cyclos III is as well known for her Andrew Winch interiors (top, middle) as she is for her manually-handled ketch rig
Cyclos III had been on the market for two years, and her broker Will Bishop at YPI had promoted the yacht to his and the company’s network of contacts. This spring, however, the owner decided he wanted a sale, and he wanted it quickly. Being a well-known yacht meant that there was both awareness and interest, but as Duncan says, the potential buyers weren’t getting excited about the idea of buying her. What the auction announcement did was underscore the fact that this iconic and beautiful yacht was going to sell no matter what. The message was: 'Either buy her now or lose the opportunity.'
“We’ve done blind auctions before and they don’t always work… you don’t always get to a reserve,” Duncan admits. “I think the reason why it worked for Cyclos III is because the yacht itself is a known commodity by a top shipyard and a big name designer in quite a niche market of top shelf superyacht sailboats. There’s a finite market of owners who would buy a yacht like this… you have to really, really, really be into yachting to buy a big ketch like this; in many ways that helped us focus the message. So there were a number of factors there that helped us.”
The word went out through YPI’s database as well as through other brokers’ databases and that of Barry Rogliano Salles (BRS), YPI’s global shipping services parent company. The owner had set a reasonable reserve (her guide price was €2,750,000). “It was the right reserve at the time,” Duncan says. “Three or four years ago, he might not have wanted to do that as he was still enjoying using her, but it was the right time, right place. That got it done."
Bids were received up until the extended closing date of 14 May. In the end, she made her reserve happily, but as Duncan says, an owner could always want more.
“There are lots of people, who rightly or wrongly see an auction as bargain basement time and figure they can pick up yachts for next to nothing, so auctions have been tarred with that brush,” Duncan says. “But it worked really well for Cyclos III. The owner was satisfied. I think part of the reason it worked—and this is a really good sign—is that we have some really willing buyers coming into the market. It’s great out there at the moment. Prices, margins and commissions are still down, but at least people are buying and selling boats again. I think the customers got bored of hanging around… they’re back in the game.”
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Yachting Partners International - YPI
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