Sycamore Partners and Crystal

[KirkNC]

2 hours ago, Baynanno1 said:

 

deworseification - what a wonderfully expressive word!

I give Warren Buffer full credit!

[Host Jazzbeau]

I'm not sure that I have any better knowledge than everyone else here – we're all speculating.  But since I was asked, here are my thoughts.

 

None of the major cruise line conglomerates would benefit from adding Crystal [CCL has Seabourn; RCG has Silversea; NCLH has Regent; and MSC is developing Explora].  So if not Sycamore, it would have to be another VC outfit.  But standalone cruise lines seem risky in only appealing to one niche and lacking economies of scale – so it seems to me that Sycamore is the most likely buyer.

 

On the one hand, Crystal and Azamara would make a great combination since they are in two different niches of ocean cruising but could share the onshore overhead.  [Note that this is exactly what Scenic is doing with their second line Emerald.]  On the other hand, Crystal desperately needs a new ocean fleet and if Sycamore took them on that might postpone the promised Azamara new-builds.

 

As to Crystal River: this has been the one really successful endeavor of that hated CEO.  All five ships have had rave reviews and actually brought something new to river cruising:  the full Crystal ocean experience.  And since the ships are already built and quite new, this is a ready source of cash flow.  So I hope that whoever buys the Crystal brand will keep this as it is.

 

I know much less about the Luxury Expedition area because it basically doesn't interest me.  Crystal's expedition ship wasn't designed for them (I think), and I'm not sure that it would be the basis of an extended class for the new owners.  There seems to be synergy in having multiple identical ships, so that could make this an orphan.

 

Finally, we have some precedents in US river cruising of cruise lines owning shipyards [because of the PSVA that seems like a logical combination here].  So if Sycamore has really deep pockets, they could buy the shipyard as well as the complete Crystal operation and add it to their existing Azamara investment.  Once that is firing on all cylinders it would be a very attractive IPO.

 

[cruisefam38]

On 1/19/2022 at 5:10 PM, ECCruise said:

Any thoughts?

You started an interesting thread ECCruise.

 

[cruisefam38]

Over on the Crystal board, deep in an active thread, the well regarded chengkp75 offered an important observation.  It is post #522, and ends with:

"At 25 years, these costs become very significant.  This is why the major, mainstream cruise lines generally sell their older ships to smaller lines with different business models, and different profit margins. "

 

Here is a link to the full post:

 

[Trend]

Didn’t Philip move to Crystal? Miss him hope he is ok.

[ECCruise]

Just now, Trend said:

Didn’t Philip move to Crystal? Miss him hope he is ok.

No, Philip went to Ritz Carlton Yachts (along with Captain Magnus) I believe. 

[Trend]

Thanks I guess I got it confused with Russ.

[nordski]

1 hour ago, cruisefam38 said:

Over on the Crystal board, deep in an active thread, the well regarded chengkp75 offered an important observation.  It is post #522, and ends with:

"At 25 years, these costs become very significant.  This is why the major, mainstream cruise lines generally sell their older ships to smaller lines with different business models, and different profit margins. "

 

Here is a link to the full post:

 

 
Thanks for posting this.

 

If this is how the scenario plays out, then it is hard to see how those who fervently wish to see Crystal’s ships return to ocean cruising will  be pleased with the new product.

 

It also doesn’t seem that many of the posters on the Crystal forum had any contact with the River Cruise arm of the company. Perhaps that would be a red flag to any interest by Azamara in River ships.

[Host Jazzbeau]

2 hours ago, nordski said:

 
Thanks for posting this.

 

If this is how the scenario plays out, then it is hard to see how those who fervently wish to see Crystal’s ships return to ocean cruising will  be pleased with the new product.

 

It also doesn’t seem that many of the posters on the Crystal forum had any contact with the River Cruise arm of the company. Perhaps that would be a red flag to any interest by Azamara in River ships.

I don't think Azamara has any chance of luring the Crystal faithful under any circumstances, so if they bought the river ships it would be to rebrand them as Azamara and build on their own clientele.  But as I suggest above, Sycamore might keep the river ships as Crystal if they buy the brand.

[Tom47]

According to an article in the Buffalo News, Sycamore Partners is one of several companies exploring a buyout of struggling department store chain Kohls.

[donaldsc]

Sycamore is going to have enough problems getting started with the 4 identical ships that they own.  Why should the burden themselves with 2 new ones that don't match the ones they already own.  Seems like all the Crystal lovers are getting desperate.  Lets face it - it is probably over.  Even if Sycamore were to take on the Crystal ship, would they have the Crystal ambiance whatever that is?  Time to move on.

 

DON

[Fairgarth]

9 minutes ago, donaldsc said:

Sycamore is going to have enough problems getting started with the 4 identical ships that they own.  Why should the burden themselves with 2 new ones that don't match the ones they already own. 

 

I would agree.  Sycamore has its hands full and shouldn't bite off more than they can chew (to mix metaphors).  They have to transition away from Royal Caribbean and all its support systems.  With one more ship they need to increase crew complement by one third and possibly even by one half if they lost people during the covid shut down.  Then, of course, deal with all the ramifications of covid while trying to increase passenger counts by one third.  Tough!

[ECCruise]

5 minutes ago, Fairgarth said:

 

I would agree.  Sycamore has its hands full and shouldn't bite off more than they can chew (to mix metaphors).  They have to transition away from Royal Caribbean and all its support systems.  With one more ship they need to increase crew complement by one third and possibly even by one half if they lost people during the covid shut down.  Then, of course, deal with all the ramifications of covid while trying to increase passenger counts by one third.  Tough!

Most of the crew hiring is done through Agents.  

Much of the Marine Management has been vendored to VShips so Sycamore isn't deeply involved.  The story that cited Sycamore as a strong potential acquisition party said exactly that. 

All cruise lines are dealing with the same issues of trying to ramp up pax counts (dozens and dozens of ships have been idle for nearly 2 years).

And adding a 2nd cruise brand with 2 or 3 ships is a lot easier than acquiring and running myriad retail platforms, IMHO.

Not saying that Sycamore should try to acquire Crystal, but simply that it is a possibility that is on the table.