Can Cigarette Keep Smokin'?
Skip Braver is an unlikely guy to be selling glitz. Dressed in a white shirt dotted with company logos, the burly 54-year-old former electronics (NTDOY ) salesman looks more like a high school wrestling coach than the CEO of Cigarette Racing Team LLC, the once and perhaps future killer brand of high-speed powerboats.
"I think of Skip as the icon of bowling on Friday nights," jokes a longtime friend and ex-business associate, Frank Bisceglia. Braver doesn't protest -- much. "Hey, I'm not a Calvin Klein model," he says. What Braver could be is an entrepreneur cagey enough to bring back the glory days of Cigarette Racing, a company that personified the good life when it started making muscle boats in Miami in 1969.
High-speed boating isn't for everyone -- or even everyone with a half-million dollars to plunk down for a machine that can roar across open water at 100 miles per hour. For some owners the rush of blow-your-face-off speed is the attraction. Others like to compete, usually in races called "poker runs," in which captains zoom from stop to stop collecting aces and queens. For most, though, it's all about image.
Cigarette's catalog is loaded with photos of ultrafast boats that, depending on your taste, could be anything from garish to awesome. Just as important to the sell are shapely female models suggesting that Cigarettes are babe-catchers. "You don't have to go 100 miles an hour in a Cigarette to look cool. You just have to pull up at the dock," says Braver.
No luxury is too costly for a Cigarette: Amenities include flat-screen TVs, high-end stereos, anodized aluminum accessories, and custom upholstery and paint jobs. For a comic book exec, Braver had Superman painted on a boat's deck and hull. Detroit catcher Ivan "Pudge" Rodriguez and singer Enrique Iglesias are among the celebrities who own Cigarettes.
Back in the 1970s, Cigarette Racing had such a lock on the market that the company name became synonymous with fast boats. "It was the equivalent of Kleenex," says Bill Tweedie, a vice-president at Myco Trailer Co. in Bradenton, Fla., which sells its gear to owners of powerboats. "The brand name has been something that you just can't kill."
Yet cigarette racing did nearly stub itself out. A freakish series of events -- starting with the murder of company founder Don Aronow, who was gunned down in 1987 by a rival boat builder -- hurt Cigarette. Since then it has changed hands five times. The game of musical ownership tarnished the brand and cut into sales. In 1997, the company's nadir, Cigarette built just six boats.
Then along came Braver -- a hellacious salesman. "Skip's a unique guy. It seems like everything he gets into, he ends up buying the company," says Bob Vadala, a fellow sales rep in the 1980s who treated Braver to his first ride in a Cigarette boat -- a spin around the Statue of Liberty -- about five years ago.
A Chicago native, Braver made his first fortune selling consumer electronics to catalog stores and other retailers in the Midwest. In the early 1990s, as an avid skier, he moved to Colorado and became a developer of luxury homes. Then it was back to Chicago, where he owned General Motors (GM ) and Chrysler (DCX ) dealerships while indulging a passion for classic cars. Soon after that first Cigarette ride, Braver slapped down $300,000 to buy one. In 2002 he bought the boatmaker, paying more than $11.5 million, he says. He owns the private company except for a small share held by Neill Hernandez, who has worked for Cigarette for 17 years.
Even Braver's friends, who knew his passion for building businesses, questioned the move. When Braver took over, Cigarette's Miami boat-building plant was antiquated -- "a bunch of tin huts held together by masking tape," recalls his buddy Bisceglia. And haphazard systems had Braver only guessing what it cost to build his luxury vessels.
Now, Braver presides over a company of about 120 employees that painstakingly turned out more than 80 powerboats last year. In 2004, Cigarette Racing completed a $10 million renovation and moved into a factory in Miami with its own custom upholstery shop and paint barn for curing splashy, hand-painted boats with names such as "Rum Runner" and "American Muscle." In the three years since Braver bought the company, the average retail price of a Cigarette has nearly doubled, to about $400,000. And he says Cigarette has been profitable each year, though he declines to give specifics.
Observers agree that Braver has brought badly needed stability to Cigarette, but challenges remain. According to industry estimates, only about 400 speedboats priced at $500,000 or above were sold in the U.S. last year. Competition for that minuscule market is fierce among a dozen companies, including Donzi Marine, Formula, Fountain, and Outerlimits. Cigarette's strategy is to build the power of its brand, including creation of a merchandise catalog offering such items as $500 pendants and $1,500 Cigarette watches.
Government regulation also is a threat. Noise restrictions on waterways and environmental laws such as zones protecting manatees and other marine animals have the potential to cut into powerboat sales, say industry observers.
What doesn't seem to matter to speedboat owners is an uncertain economy or the spiraling price of fuel, which can cost about $100 an hour of cruising at 80 mph. "These people have a lot of income. They want to go boating, and they want to look good," says Tweedie. Skip Braver can make that happen. Just make the check out to Cigarette Racing.
By Mark Hyman in Miami