Hornby's financial updates to the Stock Market

[JSpencer]

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Why increase the price of Terriers with the P's coming along ?  That's weird.  I know that the Terriers were more numerous and useful in real life, but the P's will compete on the "small, cute Southern loco" front.

 

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The terrier is at least a 1/3 less than the price of the P. To be honest, the model has been around for around 3 decades, I seriously cannot see people who ordered "P"s cancelling their order for a Terrier. Likewise I doubt those after the repeat terrier will cancel it for a P due to the price increase. They may have previously cancelled following the announcement of the P itself though. For example, I cancelled my L&B tank due to that reason, using the money intended for that in a "P" instead and I was not subjected to the potential £60 price increase yet (that might still happen yet to people with old pre-orders).  

 

I had thought the Q1 was doing very well staying below the £100 mark considering other 0-6-0 tender locos were above it.

The J94 has a more recent direct competitor though which is not that different in price.

Edited September 29, 2017 by JSpencer

[Tim Dubya]

Wish I'd taken up a cheaper hobby like transatlantic yacht racing or something....








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[Marcyg]

I strongly think there is still a market for older models, like the Lima 47, with the more modern Hornby version of the chassis. There were some cracking models that a lot of modellers (such as myself) would happily purchase with the view of doing them up (currently got 2 86s sat here doing just that). The issue I have with it is Hornby currently ARE doing that with the railroad range, but want 90 quid for a class 90 which is decades old. Those who argue that the cost of tooling etc needs to be paid for, with these older models that was done years ago. Yet Hornby seem intent on wanting top dollar for them. I keep hearing the phrase 'we need to get younger people into the hobby' yet with a sizable amount of families struggling under the cost of just living, 90 quid is a heck of a lot of money, especially when you add in track, controller and everything else. I agree I've picked up on 1 item here, and bargains can be had, but my point still stands. These older models get thrown out at vastly inflated costs, sometimes it seems 'just because they can' Mk2 air cons anyone?, and yet Hornby complain when people ain't buying their stuff. Sell cheaper, sell more, get more people interested. Leave the highly detailed works of art to people who CAN afford them, or those who want a super detailed model to be the pride of their fleet. #grabs coat and runs for cover in view of the can of worms I just opened#

[Kelly]

I strongly think there is still a market for older models, like the Lima 47, with the more modern Hornby version of the chassis. There were some cracking models that a lot of modellers (such as myself) would happily purchase with the view of doing them up (currently got 2 86s sat here doing just that). The issue I have with it is Hornby currently ARE doing that with the railroad range, but want 90 quid for a class 90 which is decades old. Those who argue that the cost of tooling etc needs to be paid for, with these older models that was done years ago. Yet Hornby seem intent on wanting top dollar for them. I keep hearing the phrase 'we need to get younger people into the hobby' yet with a sizable amount of families struggling under the cost of just living, 90 quid is a heck of a lot of money, especially when you add in track, controller and everything else. I agree I've picked up on 1 item here, and bargains can be had, but my point still stands. These older models get thrown out at vastly inflated costs, sometimes it seems 'just because they can' Mk2 air cons anyone?, and yet Hornby complain when people ain't buying their stuff. Sell cheaper, sell more, get more people interested. Leave the highly detailed works of art to people who CAN afford them, or those who want a super detailed model to be the pride of their fleet. #grabs coat and runs for cover in view of the can of worms I just opened#

 

I agree, they should be selling in the £30-60 range dependant upon the model. Knock them out in the simplest liveries (green, blue etc) instead of NSE and modern liveries to keep costs down.

 

The 90 at £90 might well be however due to the factory costs, and the new chassis will incure new tooling costs that need to be factored in, and there might have been neccessary changes to the original tooling for the particular factory used (rememebring that Hornby use multiple factories for different models now).

[The Johnster]

Like Marcyg, I am confused by exactly what Railroad is for and how it is actually marketed.  I understood it initially to be a range of low cost lo-fi models for a budget market, with less importance placed on finer detail and with costs being kept low by the tooling being already depreciated and in any case no use for models to a higher modern standard.  Thus the soon-to-be reissued 14xx, with a very old chassis and the original Airfix body moulding, at a very low price, makes sense.  But what about the Crosti 9F, then? £150 is hardly low priced, despite the loco showing it's age compared to more modern 9Fs.  Where does that fit in?  There seem to be plenty of them about, and at that price it's hardly surprising!

 

Railroad, which ought to be in my view much more strongly marketed through the likes of Toys R Us or Hamley's, and the big mail order companies, seems to be having something of an identity crisis.  A diesel or electric outline loco with older tooling and a basic level of detail should not be costing £90, and one feels might turn an honest buck for the company at half that.  £20 for a coach seems fine, and £4.50 for a lowmac, with a load, is a gift, but to ask for £16 for the toy 4 wheeled coach which is not representative of any real railway vehicle and has no place in the range at all in this day and age, as neither do the overlength Thomas freight vehicles or 16 ton minerals, is just nonsense.  

[Gerald Henriksen]

Despite what was said above, the Railroad Crosti 9F is new tooling (as of 2014), and so its price reflects that.  I also wonder if it may have been started under design clever, as it has features that to me don't make sense for a Railroad model, but at the same time compromises that don't fit the main range.

 

Despite that, pricing doesn't just reflect the cost of making the model.  While the tooling may be old, you need to try and maintain a consistency in your pricing scheme so that newly tooled models aren't dramatically more expensive than older models.

 

Hornby haven't always done well with this, in part because some of their models don't really fit well into either category of main range or Railroad, but pricing so that smaller models are cheaper than bigger models is a reasonable compromise.

[adb968008]

I've got admit being a little perplexed at an aging £155 M7, next to the brand new £110 SECR H in the same year.

[adb968008]

Despite what was said above, the Railroad Crosti 9F is new tooling (as of 2014), and so its price reflects that.  I also wonder if it may have been started under design clever, as it has features that to me don't make sense for a Railroad model, but at the same time compromises that don't fit the main range.

 

Agreed, it's on a whole new chassis too, that's more detailed than the Railroad 9f, now if they put it with the super detailed clan/Britannia tender...

[Tim Dubya]

I've got admit being a little perplexed at an aging £155 M7, next to the brand new £110 SECR H in the same year.

Yep, a rip off when one considers the H in such a complex livery.

[Legend]

Like Marcyg, I am confused by exactly what Railroad is for and how it is actually marketed.  I understood it initially to be a range of low cost lo-fi models for a budget market, with less importance placed on finer detail and with costs being kept low by the tooling being already depreciated and in any case no use for models to a higher modern standard.  Thus the soon-to-be reissued 14xx, with a very old chassis and the original Airfix body moulding, at a very low price, makes sense.  But what about the Crosti 9F, then? £150 is hardly low priced, despite the loco showing it's age compared to more modern 9Fs.  Where does that fit in?  There seem to be plenty of them about, and at that price it's hardly surprising!

 

Railroad, which ought to be in my view much more strongly marketed through the likes of Toys R Us or Hamley's, and the big mail order companies, seems to be having something of an identity crisis.  A diesel or electric outline loco with older tooling and a basic level of detail should not be costing £90, and one feels might turn an honest buck for the company at half that.  £20 for a coach seems fine, and £4.50 for a lowmac, with a load, is a gift, but to ask for £16 for the toy 4 wheeled coach which is not representative of any real railway vehicle and has no place in the range at all in this day and age, as neither do the overlength Thomas freight vehicles or 16 ton minerals, is just nonsense.

 

Yes but you make the mistake of matching selling price with what it actually costs to make it. I don't think the link exists. The selling price is based on what they can get for it. That's why you get 4 wheel coaches@ £16 . Most of the non railway enthusiast fraternity don't know any different and think that must be the price

[Legend]

I've got admit being a little perplexed at an aging £155 M7, next to the brand new £110 SECR H in the same year.

The M7 has always been overpriced, again its what they think they can get for it. I remember when it was introduced and the price so high all the bunkum about how difficult it was to get an 0-4-4 balanced and that's why it cost so much. So much for that as the H is much cheaper. Simon Kohler was the master at marketing models at max price. His legacy lives on

Edited September 29, 2017 by Legend

[Mike at C&M]

Can you tell us more about the warranty repairs conditions?

The circular received from Hornby states the following:

 

"We will provide a 12-month warranty from date of purchase by the consumer if the following conditions are met:

a.      Proof of purchase by the consumer must be provided 

b.      The item must have been purchased from Hornby, by the 

         Customer, within 24 months of the sale date to consumer

c.      The return must come back through the original retailer and not 

         direct to Hornby

d.      Hornby shall be under no liability in respect of any defect arising 

         from fair wear and tear, wilful damage, negligence, abnormal 

         working conditions, failure to follow Hornby’s instructions (whether 

         oral or in writing), misuse or alteration or repair of the goods 

         without approval

e.      The decision to repair or replace will solely be the decision of    

         Hornby"

[Coryton]

Yes but you make the mistake of matching selling price with what it actually costs to make it. I don't think the link exists. The selling price is based on what they can get for it. That's why you get 4 wheel coaches@ £16 . Most of the non railway enthusiast fraternity don't know any different and think that must be the price

 

Well there isn't much competition for non prototypical 4 wheel coaches.

 

Or indeed for prototypical ones ready to run. 

 

The circular received from Hornby states the following:

 

b.      The item must have been purchased from Hornby, by the 

         Customer, within 24 months of the sale date to consumer

 

 

Interesting...

 

So if I buy something that has been on the shelf for over 24 months, Hornby won't honour the warranty? How am I supposed to know when the shop bought a particular item of stock? 

 

Of course the shop still has responsibilities if they sell something that isn't "of merchantable quality" no matter how long it's been on the shelf, but this suggests that after 24 months they're on their own.

[adb968008]

So for the retailer..

 

Buy less, check it thoroughly on delivery, if there's a fault send it back.

After month 10.. dump it off your shelves pdq as month 13 it's second hand.

 

I wonder what happens if mazak rot sets in on month 25?

 

Interesting...

 

So if I buy something that has been on the shelf for over 24 months, Hornby won't honour the warranty? How am I supposed to know when the shop bought a particular item of stock?

 

Of course the shop still has responsibilities if they sell something that isn't "of merchantable quality" no matter how long it's been on the shelf, but this suggests that after 24 months they're on their own.

My interpretation is it's 12 months from sale by Hornby to the shop, and 12 months from that date to the consumer... so 1st October 2017 models have to be sold as new with warranty by 30th September 2018, to give a customer warranty to 29th September 2019.

 

So if a model supplied on Oct 1st 2017 is still on the shelf on Oct 1st 2018... it's no longer "new" with warranty... it's as good as second hand without warranty.

 

Retailers need to become high turnover carpet baggers, or take on liability or just buy to what they can sell in a year.

Of course if stock at Hornby doesn't sell out, order more a few weeks before the 12mth is up, and return the old ones as faulty...that resets your clock.

 

Looking at several websites, there's Hornby guff out there that's years old still available as new. If I were still retailing new stock, I'd be thinking long and hard about stocking anything other than easy sell bargains or new toolings.. all that other stuff maybe take stock to order.

 

Whilst I see Hornby's policy is aimed at reducing risk of returns of second hand or old stock from years ago, I suspect it could harm new sales if retailers decided to be more cautious about ordering ever increasingly higher priced run of the mill repeat stock to avoid being left with the risk if still having it one year on.

 

The point they might be missing is why does a retailer still have new stock, several years after release still stuck on their shelves unsold in the first place ?

Edited September 29, 2017 by adb968008

[Coryton]

My interpretation is it's 12 months from sale by Hornby to the shop, and 12 months from that date to the consumer... so 1st October 2017 models have to be sold as new with warranty by 30th September 2018, to give a customer warranty to 29th September 2019.

 

 

I don't think so.

 

It said:

 

"The item must have been purchased from Hornby, by the 

         Customer, within 24 months of the sale date to consumer"

 

So it's 24 months max between the shop buying the stock* and the "consumer" buying it, not when the consumer wants to make a warranty claim.

 

I can see why they might not want to have to honour a warranty on something that has been on a shelf for ten years (especially if it has Mazak in...) but I'm not sure it's the right move. I wonder what phrasing they are planning on putting in the boxes to explain to the purchaser why they might not actually have a warranty. They could always put a 'warranty not valid after' date stamp on or in the boxes, I suppose, but it's going to cost them to pay someone to do that. Maybe we'll have to get used to models with a 'sell by' date on them...?

 

It sounds very much like the sort of thing that is backed down on fairly quickly once people start complaining, like Microsoft's attempt to sell software that became worthless if the first computer you installed it on died, even if that was days after purchase.

 

 

* Whatever that means. When the stock was ordered? Or delivered? Or invoiced?

This sounds very much like the sort of thing that is backed down on fairly quickly once people start complaining, like Microsoft's attempt to sell software that became worthless if the first computer you installed it on died, even if that was days after purchase.

 

[Kelly]

 

 

* Whatever that means. When the stock was ordered? Or delivered? Or invoiced?

This sounds very much like the sort of thing that is backed down on fairly quickly once people start complaining, like Microsoft's attempt to sell software that became worthless if the first computer you installed it on died, even if that was days after purchase.

 

With WIndows 10, if you change the motherboard, you need a new licence, so they still do that. Windows 7 and 8 licences were transferrable for retail licences, but OEM never were. For Windows 10, it is non-transferrable no matter the version now. Though there are some workarounds and phoning Microsoft can resolve it, but generally it is a non-transfer licence.

[Gerald Henriksen]

An interesting take on the "design clever" era of Hornby:

 

http://www.rmweb.co.uk/community/index.php?/topic/113725-basingstoke-in-oo-1958-67-layout-and-stock/?p=2869443

[Legend]

An interesting take on the "design clever" era of Hornby:

 

http://www.rmweb.co.uk/community/index.php?/topic/113725-basingstoke-in-oo-1958-67-layout-and-stock/?p=2869443

Yep certainly fits with starvation of product at the time. Very interesting.

[Black 5 Bear]

This new policy will not circumvent the Sale of Goods Act. This clearly states that an article must be fit for purpose and has a time limit well in excess of a 12 month warranty. This has obviously been thought up to to shift liability to the retailer rather than the manufacturer.

[Coryton]

With WIndows 10, if you change the motherboard, you need a new licence, so they still do that. Windows 7 and 8 licences were transferrable for retail licences, but OEM never were. For Windows 10, it is non-transferrable no matter the version now. Though there are some workarounds and phoning Microsoft can resolve it, but generally it is a non-transfer licence.

 

I was referring to what they tried with Office components, not Windows itself.

 

This new policy will not circumvent the Sale of Goods Act. This clearly states that an article must be fit for purpose and has a time limit well in excess of a 12 month warranty. This has obviously been thought up to to shift liability to the retailer rather than the manufacturer.

 

Indeed...weren't they supposed to be being nicer to their retailers?

 

The Sale of Goods Act has now been replaced by the Consumer Rights Act but in any case both effectively give you a 6 month warranty because after that time you have to be able to prove that the product was faulty when sold.

 

In most cases I would have thought this next to impossible in this case, though Mazak rot might be an interesting exception.

 

I can understand Hornby not wanting to be potentially liable for refunding something that they sold to a shop ten or more years ago, and I have no idea what sort of provision their accountants currently make for this, but the move doesn't feel quite right to me.

Edited September 30, 2017 by Coryton

[JSpencer]

Mazak rot is due to lead impurity. And they cannot put lead in consumer goods anymore period!

[Coryton]

Mazak rot is due to lead impurity. And they cannot put lead in consumer goods anymore period!

 

Not quite as simple as that, or you couldn't walk into Halfords and buy a new lead-acid battery for your car.

 

In any case if you were to attempt to get a refund for Mazak rot under the consumer rights act I don't think it would make any difference if the impurity responsible was banned or not under RoHS, REACH or any other legislation.

[Legend]

You do sometimes wonder if there is a "shoot yourself in the foot" department at Hornby.

 

You assume, but really do wonder if, someone has done a cost benefit analysis on this. The cost of rectifying defective goods outwith their warranty period versus the bad will created with their independent model retailers and of course the end consumer. Are they risking hacking people off for little gain?

 

Fortunately, or not, most defective Hornby goods I've had are immediately obvious.

Edited September 30, 2017 by Legend

[Coryton]

You do sometimes wonder if there is a "shoot yourself in the foot" department at Hornby.

 

You assume, but really do wonder if, someone has done a cost benefit analysis on this. The cost of rectifying defective goods outwith their warranty period versus the bad will created with their independent model retailers and of course the end consumer. Are they risking hacking people off for little gain?

 

Fortunately, or not, most defective Hornby goods I've had are immediately obvious.

 

I think there's two aspects; the 'real' cost-benefit to the company, and what size of provision the accountants want to put in for the potential liability.

 

In my experience accountants are extremely cautious about that sort of thing.

 

Of course it doesn't affect how much money is actually in the bank, but it makes the company less profitable on paper.

[JSpencer]

Not quite as simple as that, or you couldn't walk into Halfords and buy a new lead-acid battery for your car.

 

In any case if you were to attempt to get a refund for Mazak rot under the consumer rights act I don't think it would make any difference if the impurity responsible was banned or not under RoHS, REACH or any other legislation.

Here we are not talking about car batteries but toys. We are talking about a part which disintegrates into a lead powder which can be breathed or pass through the skin. If lead content is too high, the legal consequences would be more serious than a refund. Next year, the lead limits will be even tighter still. Edited September 30, 2017 by JSpencer