Agenoria Models

[Sandy Harper]

The following has been posted on Facebook by Mike Williams.

 

 

I think the time has come, and I have made the decision today, to close down the 0 Gauge side of Agenoria Models.
As from September 2015, I will not be replacing any existing kit stock, and as soon as the remaining stock is gone, there will be no more kits made available.
0 gauge prototypes will now only be available as RTR.
I will do Guildex, and the Reading Trade show.
But after that I will not be attending any 0 gauge only shows in 2016.
A full announcement will be made on the website and in the Gazette as soon as I can sort it.
If you want any 0 gauge kits, I have most in stock at the moment my advise is get them now, before I run out of stock.

I will now be concentrating on The BIG Range only, and this will not be affected by the change.

 

Regards

Sandy

 

 

 

 

[rope runner]

Yes, he seems very upset at the lack of recent sales at shows...

 

Paul A. 

[ian@stenochs]

Yes, he seems very upset at the lack of recent sales at shows...

 

Paul A.

 

I bought and built a lot of Agenoria locos when Pete Stamper had the company. All built well and accurate to prototype and I would recommend them to anyone looking for an industrial loco. Since Williams took over there have been some prototypes introduced which I am interested in but which I won't consider buying based purely on his reputation as College models. I wonder if the poor sales is as a result of chickens coming home to roost.

Ian.

[Kenton]

That is a real pity. Yet another big loss and hole in the range of available kits. I don't think the bad press is really that justified and more of a rumour mill than with the kits. I think sales at shows are very fickle and possibly more so in 7mm than 4mm. 7mm is still seen as expensive (even though these kits were not in the league of some of the other 7mm kits as far as price - some of the very old (relatively) from other suppliers are way out there in cost). There is also the fact that most people only need a few locos in 7mm and once you have them and taken time to build them you probably don't buy many, if any, more.

 

I hope a buyer (and one with good business acumen) is found to at least continue producing the range.

 

We are running out of small industrial options and soon will only be left with the modern or very big that are not much use except for display or club/garden layout.

[Kenton]

Spurred to add another post by a duplicate topic started (now deleted) today

 

Facebook and Twitter remain an irrelevance for many of us so direct linking is pretty useless. Some of us haven't yet read all of the long topic on the 1366 to pick up on a single comment. Or read another forum so the news in this topic was out of the blue to me.

 

Apparently there is a discussion elsewhere ??? on the rescue of this business and other modelling businesses where this one is valued at £50000!!! and where the owner is quoting to the low number of sales at recent shows, and the failure to cover development costs of recent kits.

 

Precisely who is valuing the business at £50,000 (dream world) Another one of these rather pointless valuations that do not take account of reality.

 

Shows are not always about sales at the show they are a marketing tool. Should be used to make a presence and generate interest among new and existing buyers. Something I must say was never forthcoming. I have stood in front of the stand at several shows showing an interest. (none of the remote ones) and have never been approached/greeted or remotely "sold" anything. If no attempt is made at winning interested parties then what is the point of running it as a "business". Compare that approach with the likes of mike & Judisth Edge, Chris at High Level, Chris at Dragon Models and many others and you are welcomed with friendly arms and every attempt is made to "sell" the latest kit or at least make you feel like returning to buy something else. I am not talking hard sell just simplyy a recognition of interest that could be nurtured.

 

If you cannot cover the development costs of new kits then there is a clue there. You are developing the wrong ones, or too many for the market to support, or just spending too much on development. Time to stop or slow down on development or do some better market research (talk with customers) or to realise that this is a hobby not a real business.

[Mike Bellamy]

Spurred to add another post by a duplicate topic started (now deleted) today

 

Apparently there is a discussion elsewhere ??? on the rescue of this business and other modelling businesses where this one is valued at £50000!!! and where the owner is quoting to the low number of sales at recent shows, and the failure to cover development costs of recent kits.

 

Precisely who is valuing the business at £50,000 (dream world) Another one of these rather pointless valuations that do not take account of reality.

 

I created the original topic in 7mm Modelling as that's where I thought most of the interest would be - it's not been deleted but now links to this topic.

 

The discussion 'elsewhere' was on the Gauge O Guild's own forum where there were some suggestions that the Guild should offer to buy small businesses when an owner planned to retire so that the rights are not just lost or stock destroyed - that discussion had nothing to do with the much more recent announcement about Agenoria but was just a general discussion about the viability of such a scheme.

 

The valuation of £50,000 comes directly from the owner himself. You do not have to be a Facebook user to read his comments but as the information is on a publicly accessible website then to save you looking I have copied below how he arrived at this valuation.

 

All quotes taken from https://www.facebook.com/pages/Agenoria-Models/639414449498262?fref=nf

 

I have nearly 15k in stock, 63 kits, if you said £250 per kit, which realistically is a very good price for a developed kit, but that's still another 15k. If you then wanted all the built up models for the stand at say £500 a model, again not an unreasonable price there is at least another 20k.  Who would pay 50k for it?   If someone has 50k lying around and wants it. Then yes it's could be up for sale.

 

In another posting, when questions about how much he paid to buy the business from Pete Stamper, he responded with quite a long reply about what he thinks of the current state of O gauge modelling - selected extracts below

 

 

I didn't pay 50k for it all in one go.There wasn't any stock, and no models for display.

 

I'm just going to close it down, sell off the stock and the models, once it's gone, it's gone.

 

I will save myself about 20k a year in the cost of attending shows, vehicle hire, etc and 0 gauge development. Which despite loads of people saying yes I'll have one of those when there done, the last 3 have hardly covered their costs to develop them.

 

 

If nobody is buying the stuff what's the point of stocking it. People are clearly spending their money elsewhere. I sold 2 kits at Kettering, 1 kit at Leigh and 2 kits at Cleckheaton. I sell more 0 gauge at general shows, than I do at Guild shows. It didn't even cover the costs of the stand and the fuel.

 

Too much competition from RTR (It's starting to get like 00) Bring and Buy, E&T and an aging and dying modelling population with little cash to spare these days, is also half the problem.

 

For the avoidance of doubt can I stress that these discussions only relate to the 7mm Standard Gauge range.

 

The 4mm range remains with CSP Models

http://cspmodels.com/abante/index.php?rt=index/home

 

The 7mm Narrow Gauge range is with Paul Martin of EDM Models

http://www.ngtrains.com/Pages/EDM_Models/N1/edmloco.html

 

 

 

.

[peter220950]

Couldn't agree more, the range of small shunters will be a great loss, but therein probably lies some of the reason for calling it a day, he has 57 different loco's in the range, many of which he has developed, and 13 more in the pipeline, how many people want that variety? - I suspect the market just isn't big enough.

 

His 'valuation' was arrived at through the cost of stock (not sure what that is, presumably wheels, motors etc?) at £15k, unsold kits another £15k (at £250 each) and £20k for the built models on the stand at £500 each. - nothing for goodwill or rights to the artwork etc. So apart from possibly inflated ideas on the value of the built kit's it sort of stacks up.  He reckons it cost 20k last year to attend shows and pay costs, and he has to make a living, he sold 5 kits at 3 O gauge shows this year.

 

I think there are a couple of problems here, firstly the prices of the more recent kits seem a little out of line with the market, £320 for a complete 0-4-0 kit seems a bit steep, yes it might represent the development cost and production costs, but if so things have reached the tipping point where people aren't buying. I'm not saying the price isn't right from the Costs + Profit = Sales Price angle, it's more a case of 'I'm not paying £300 for a smal loco kit' from the buyers.

 

He has presumably decided that Gauge 1, and bigger, offer better returns, probably because there's less choice/competition in those sizes. For the same development cost he can recover more of it per unit sale, the Gauge 1 08 costing £610, and Gauge 3 £1150 against £355 in O .

 

What's happening in O is a repetition of OO years ago, with rising kit costs and falling demand reducing the number of suppliers.

 

For this we have also to look at the RTR boys, he mentions that there's not likely to be much market for his recently developed Peckett E class now, and how many Hunlestt sales at £190.00 a kit have been lost to the excellent Ixion product.  The possible arrival (one day) of a terrier from Dapol, maybe even an 08 this century, all reduce his market. Sadly the market forces are exerting an influence on his business, you can't make an omlette without breaking eggs.

 

All this also ignores the elephant in the room that the quality of some of the recently developed kits is not in line with the modern kit market, and this too must affect sales, I have seen in a couple of threads that they are often 'challenging'. That is what put me off buying a couple of his kits, as he has 3 of the loco types that I need for the Cadbury's layout, but there's not much point in paying for a kit if it's cheaper and as easy to scratchbuild.

 

His thoughts that there was not the money in O gauge nowadays, doesn't seem to hold true if you look at the likes of Masterpiece, Lee Marsh, Loveless etc. I just think the market sector he was in is being affected more than some others. There's still plenty of money around, but who with a lot of money is building a small shunting plank? If I had that sort of money I would move to somewhere larger and have a large layout, as it is, with limited means, I will go for best value, which nowadays is becoming increasingly high quality RTR, and spend the saved time on other modelling areas.

 

The only hope I can see is that he will sell the range off piecemeal, then those manufacturers who want to extend their ranges with complimentary products can take sections off him, I can't see it being a viable operation to sell the whole business if he doesn't think he can make a living from it, and there's probably not too many around with £50k in loose change.

 

Who knows if he did this I might go for the Avonside 0-4-0T and North British shunter ranges

 

 

Peter

[Kenton]

Many thanks for the clarification Mike. Although I am a member of the Guild I very rarely visit their forum and as for facecrook it is completely inaccessible even if I was in the slightest bit interested in wasting good electrons.

 

As one with business valuation experience, I would dispute the owner's estimate, long past development is a wash, recent development has to be shown to have marketable value, display models are a write down already written off (and probably already claimed against profits) and may not be required from a buyer's perspective, stock is valuable but only on an "at cost" (or less) basis and the rest is in the dubious area of goodwill - potentially zero to the buyer. But heh!, one has to start somewhere and work with the owner's dreams and the owner just putting all in the nearest skip. It is only ever worth what someone is prepared to pay/invest/lose.

 

I don't see RTR being much of problem. I do see the "ageing modeller" and modeller who wants it all now rather than being prepared to wait for a kit to be built or to go through hoops to build it, the problem with "cash to spare" I think is more in people's minds - as I think the whole idea of recession and cut-backs. When I visit the Reading show there still seems no shortage of cash changing hands, prices for kits on ebay still seem to be hitting near direct costs or higher, there never seems to be a shortage of people willing to pay reasonable prices for kit construction. And besides we re always being told that O gauge is only for the wealthy.

 

As I said, I see this more of expectations being too high and a rather poor approach to potential customers. If I was going round a show checking out the stands with only a limited purse and only needing one new kit per show who am I more likely to spend with?

Edited June 14, 2015 by Kenton

[Poggy1165]

It is sad to see it go, obviously. But it is a huge range, and mostly of rather esoteric prototypes, so I'm not that surprised it isn't viable. The few 'mainstream' kits have obvious, cheaper competitors in the market. 

[Pannier Tank]

I sent two emails (many months apart) enquiring the services for 7mm kits; the reply was the same, I am at an exhibition at the moment, I will quote when I return home. I never received a reply on either occasion, I never gave a third oportunity.

[rope runner]

Compare to that the "nothing is too much trouble" approach which Roger Slade offers at CSP...

 

Paul A

[LaScala]

As one with business valuation experience, I would dispute the owner's estimate, long past development is a wash, recent development has to be shown to have marketable value, display models are a write down already written off (and probably already claimed against profits) and may not be required from a buyer's perspective, stock is valuable but only on an "at cost" (or less) basis and the rest is in the dubious area of goodwill - potentially zero to the buyer.

Totally agree with this.

Current value can only be a multiplier of net income (which would appear to be at or about nil!) and the display stock.  I don't see there is much value in the etches if they don't sell and as the kits don't have wheels or motors their only historic cost is the metal and the etcher's fee.  Even then a buyer would be unlikely to pay 100p in the pound.

 

I must say the seller's complaining about the low number of kits sold looks like a massive own goal in this context.

 

Kenton should look at Facebook to see what Lionheart have achieved in that platform before dismissing it so comprehensively.

[Adrian]

 

His 'valuation' was arrived at through the cost of stock (not sure what that is, presumably wheels, motors etc?) at £15k, unsold kits another £15k (at £250 each) and £20k for the built models on the stand at £500 each. - nothing for goodwill or rights to the artwork etc. So apart from possibly inflated ideas on the value of the built kit's it sort of stacks up.  He reckons it cost 20k last year to attend shows and pay costs, and he has to make a living, he sold 5 kits at 3 O gauge shows this year.

 

 

Unfortunately IMHO the value of the unsold kits is entirely dependant on which kits are still in stock, I suspect they are the ones he can't sell so £250 is optimistic if he can't sell them then they are worthless. As for the built models on the stand, I'm sorry but £500 each is having a joke. The last time I saw the models on the stand at York then half of them weren't even finished or needed some serious work on them. Unfortunately show costs are very expensive and if you are not making a return on them then yes he has to look at the return on the investment. Again IMHO the artwork and masters for the Pete Stamper designed kits may be worth sensible investment, but the rest I wouldn't lose any sleep over.

[Horsetan]

Compare to that the "nothing is too much trouble" approach which Roger Slade offers at CSP...

This sort of reminded me of "Cabin Pressure" where no job is too small, but many, many jobs are too difficult.

 

 

......Kenton should look at Facebook to see what Lionheart have achieved in that platform before dismissing it so comprehensively.

You have to remember that Kenton's default position is to be dismissive of everything. That's what made him the man he is today. Edited June 15, 2015 by Horsetan

[david.hill64]

It's an interesting range and I will be sorry if it is no longer available. There are a lot of 'would be nice to have but not essential' models in the range. It's a good website now too.

 

The topic of valuation is an interesting one. As pointed out the only real guide is actual profit and if sales have been few, then clearly the business isn't worth too much. It depends what comes with the sale: as well as the photo etches there are likely to be moulds for whitemetal and brass castings. All of these have tangible value. The price of the intellectual property in the designs is more difficult, but if you look at the labour costs in drawing up a design, having test etches built and then redrawn where necessary, there is certainly value there. Goodwill is much more difficult to price. Stock can only be valued at cost price if unsold, and as others have pointed out, if nobody is interested in buying, then the value is only that of the recoverable items and then scrap, so not much at all.

[Mike Bellamy]

His 'valuation' was arrived at through the cost of stock (not sure what that is, presumably wheels, motors etc?) at £15k, unsold kits another £15k (at £250 each) and £20k for the built models on the stand at £500 each. - nothing for goodwill or rights to the artwork etc.

Peter - I read his comments a different way - I think he means that the stock of unsold kits is £15k and the rights to each of the kits is the £250 as he mentions 'developed kit' - this would then include the goodwill and artwork.

 

As others have mentioned the earlier models are said to be of a better quality (I have no personal experience) then perhaps the rights to those would be worth £250 each - sell 25 to get your money back just by adding £10 to the price. I don't have a price list in front of me but I wonder if they are the cheaper models and the more recent are more expensive but are allegedly of a lower quality. However for a prospective purchaser I would expect it's all or nothing - I doubt you could just choose your favourites!

 

 

.

[hobbyhorse]

The value of the business is what people would pay for it, it's very easy to over price it.

When we purchased Hobbyhorse if you added in the full price for the stock it would still be unsold today.

The 7mm market is still very good but you only produce what's required, and it's easy to get something wrong without good market research. Some of our original castings which came with the business have high stock levels that will never completely sell out, anyone for LMS Duchess double chimneys, we're got over 500!

 

Simon

Edited June 15, 2015 by hobbyhorse

[kirtleypete]

You have to trim your range according to what people want; until recently I had over 150 different sheets of building papers, most of which no one but me wanted to use! Now I've reduced it to twenty five, just the popular stuff like red brick and slate roofing. To date no one has complained so clearly it was the right thing to do. I've also stopped doing some kits and accessories with the same reaction - the bottom line is to concentrate on what people are interested in. 

Peter   KIRTLEY MODEL BUILDINGS

[PenrithBeacon]

I wouldn't be the slightest bit surprised if the owner's valuation isn't right. Exactly right. It seems to me that a prospective purchaser of this range has the option of buying now at £50k or waiting until the current owner has sold all his stock and then buying just the bits of the range which are of interest and which he/she thinks will sell. But I think it has to be borne in mind that 7mm is a minority interest in railway modelling and 7mm industrial railway modelling is just a fraction of that minority interest.

 

I took a look at the CSP range of 4mm industrials via the link above and it's huge, surely far larger than the market will bear. I suspect that the Agenoria brand was over developed by its original owner simply because he was an enthusiast who kept on doing what he enjoyed doing. Now, further on, we are seeing the downside of that approach.

 

Regards

Edited June 15, 2015 by PenrithBeacon

[Kenton]

 

However for a prospective purchaser I would expect it's all or nothing - I doubt you could just choose your favourites!

 

That is often the core of the problem. The seller sees it as a retirement lump sum. (or the family estate) A buyer should be interested in return on investment. Can the buyer make more than investing the sum elsewhere and a profitable income to cover time invested? If that means splitting the business between loss making and profitable then the buyer is going to be more interested. A seller has to realise that if his business is not making a profit (and sales have dropped or are falling) then it is near impossible to attract a buyer.

 

You may be lucky and find someone with more money than sense who sees it as a hobby interest rather than a means to make money (that just about covers all "businesses" in this market) but unlikely. Meanwhile the business is being wound down and more and more customers are put off. The owner making no real effort to sell on a commercial basis and rejecting out of hand quite reasonable offers.

 

How many times have we seen this before? I wonder if professional advice is ever sought and if the best advice would be to sell piecemeal on ebay?

 

It is always a shame, but how many phoenix have simply not risen from the ashes. Perhaps as modellers we simply have to learn to let go and concentrate on the survivors.

[Horsetan]

..... Some of our original castings which came with the business have high stock levels that will never completely sell out, anyone for LMS Duchess double chimneys, we're got over 500!

You might want to contact whoever eventually takes over the Martin Finney 7mm range. It looks like you could usefully supply at least one casting for the "Duchess" kit.....

[glo41f]

I agree that it is a shame that Mike feels this way but perhaps the age of the kit builder has passed. A number of modellers I know no longer build kits for a vaiety of reasons and often they prefer to spend on RTR stuff. In 7mm this is readily available from the Guild's E&T stores and indeed at the members bring and buy which is present at most shows. None of us is getting younger and I am guilty as the next man in having a large number of unmade kits sitting around probably losing value as after I have gone who is going to want them? I have also found that steam outline locos are not necessarily good "runners" and often self destruct e.g. the valve gear disintegrates! I now feel that my HJ diesels which run better are the preferred form of traction and I can see the day coming when they are the only form of traction!

 

I made several of the original Agenoria kits and found them very good indeed. However, if you want a industrial type loco these days then Ixion provide the needs without any hassle in making the thing and they run perfectly straight out of the box. Better still they are cheaper when you facto in the costs of wheels and motors etc. I suppose this is an inevitable and evolutionary process and I do not think that Mike will be the last to conclude that the business is not for them.

 

There is a further point. As traders follow the same route and drop out of the business, will the shows we have remain viable? I would hate to see a time when there are no model shows at all due to an inability to fund them.

 

Martin Long

[Kenton]

 

but perhaps the age of the kit builder has passed.

This has been the subject of several long discussions here. I think the conclusions were various. From my perspective there are still plenty out there prepared to spend on kits and spend to have them built - though I do wonder what percentage actually only ever live in a display case. RTR may be on the increase but again I do not see it wiping out the kit industry. There is a long way to go before the likes of Ixion and Hejan cover everyone's wishlist (even in 4mm) if ever. Also there are plenty of modellers out there who do not want the near exact copy of 100's of other modeller's model. A kit build has a uniqueness all of its own, and that appeals.

[Horsetan]

..... I would hate to see a time when there are no model shows at all due to an inability to fund them the fact that everyone's got identical RTR models....

 

There, that's better.

[Davey]

I agree with Kenton, there is tremendous satisfaction in kit and scratch building, something which the purchaser of RTR will never experience.  I'm fairly new to kit building and model in 7mm to Scale 7 standards. The problem I have is that I model the Hull & Barnsley Railway c.1908. At the moment there are two H & BR kits available, one a Dragon Models horse box, the other a Laurie Griffin H1 class 2-4-0 locomotive, which was designed by the late Paul Gram, which I am in the process of building at the moment. Any other needs I have, will of necessity have to be scratch built. To survive, kit designers and manufacturers, can only survive if they cater for popular locomotive, carriage and wagon types.

 

Dave