This may not seem like the time for a major private equity firm to consider investing in a cruise ship line, but that’s exactly what L Catterton has done.
If the name rings a bell, it’s because the firm has been – and is still – a major player in the RV industry; in fact, in many industries. In the RV world, the company owns Airxcel, a leading producer of heating, ventilating and air conditioning products, plus appliances, for the RV and marine markets. Previously the firm owned a stake in Heartland RV, which it later sold to THOR Industries.
Sergei Klebnikov, a writer for Forbes Magazine, wrote this fascinating story of a firm sticking its neck out in the middle of a pandemic.
“As shares of Norwegian Cruise Line continued to sink like the Titanic – down 80 percent from the end of 2019 to $12 per share by late April – Scott Dahnke and his team at L Catterton were quietly eyeing the wreckage. The partners at his Greenwich, Conn., private equity firm had already made a killing by taking a cruise ship-based beauty chain public and they were focused on high-end brands. After all, the ‘L’ in their name comes from their financial backing by LVMH, the French luxury goods giant, and they had already scored a string of successes from investments in the upscale home decorator Restoration Hardware, Lily’s Kitchen, a London-based organic dog food maker and Peloton, the Internet-connected stationary bicycle concern.
But this was new territory. Never before had they seen such a rapid reversal of fortune of a well-regarded brand. Dahnke decided the time was right to pounce, despite the fact that in a best-case scenario, Norwegian wouldn’t be expected to sail any of its fleet’s cruise ships for at least two months.
“‘There’s no question that consumers love to cruise . . . they want to get back on the water,” says the 54-year-old Dahnke. “We’re backing a strong and well-positioned company in a resilient industry.’”
