Hornby secure £18 million loan

[Steamport Southport]

 

Hate to break it to you, but that tradition is already dead.

 

 

No it isn't. Don't be silly now.

 

I can guarantee they still sell thousands of train sets through places like Argos and the like. Just Google "Hornby Train Sets" and you will see loads of them for sale from places that aren't model shops.

 

Modellers think that the average person in the street think like they do. They don't.

 

 

Junior wants a train set (or grandad wants to buy him one). They don't go to Hattons, they look online. First place comes up is Argos or Amazon, even Hornby. Bought. Delivered next day.

 

 

 

Jason

[Rivercider]

Perfectly true, but to many, does this matter? Modellers have deserted the local model shop in the pursuit of slightly cheaper prices. In the short term, this works, but now all their models come by post and we see the gripes about bits falling off in transit.

 

Financiers care nothing for the long term. If making "lollipop locos" works (it has for Heljan) then they might decide this is the way to go. After this, direct selling might appeal too.

 

The job is to make a profit, NOT to ensure the survival of the hobby.

Yes, can't argue with that, I agree Hornby (et al) are not a charity.

 

cheers

[TheSignalEngineer]

Rather simplistic I think

 

 

 

 

DSC00203.JPG

 

As I have already said the speedometer cable was missing - nothing to do with damage in transit - never there!

 

2017_1205Duchess_of_Hamilton0003.JPG

 

Likewise the water scoop on Duchess of Hamilton (Hornby from Locomotion)

 

2018_0311Llanvern_Grange0001.JPG

 

And then what about these buffers on Llanvair Grange - bent in the Post - I think not.

I bought two Stanier non-corridor brakes from the first run. Got enough handrails for one coach from the two and none loose in the boxes. Still, not a problem as one converted to pull-push and new set of handrails made.

[mdvle]

No it isn't. Don't be silly now.

 

I can guarantee they still sell thousands of train sets through places like Argos and the like. Just Google "Hornby Train Sets" and you will see loads of them for sale from places that aren't model shops.

 

Modellers think that the average person in the street think like they do. They don't.

 

 

Junior wants a train set (or grandad wants to buy him one). They don't go to Hattons, they look online. First place comes up is Argos or Amazon, even Hornby. Bought. Delivered next day.

 

I have no illusion about the public at large, the evidence is available for anyone to see.

 

Yes, some train sets are still sold.  But nowhere near the numbers that they sold in the past for the simple reason that Junior today wants a tablet, gaming system, or any number of other things.

 

If Hornby was able to still sell the train set in any significant numbers then they wouldn't be in the financial mess they are in - they are after all with their stock listing and board and all those other expensive items set up as a mass market toy company.

 

So yes, the tradition is dead.

[Mike Storey]

There is an obvious relationship that most of you are missing. If Hattons, Kernow, Rails and the rest of the commissioners of a handful of locos (and wagons but rarely carriages, Kernow excepted) could only rely on those sales for their profit and their ability to invest, they would be bankrupt tomorrow. They rely on the Hornby, Bachmann, Dapol, Peco and a number of other standard lines (not just model rail) to generate both the cash flow and the profits they need. Perhaps they install Chinese accounting walls to ensure these commissions do not affect their primary businesses, but that is illusion. They would have had to fund such models up front in some way, or shown a good creditworthiness upfront at least. 

 

So if the big boys pursue the same business model, most of the current commissioners would be broke, tomorrow.

 

We should also note that Peco, for example, are steadily diversifying and expanding, despite being seen as a minor player, and into niche areas and in matters that require modellers to model, not simply collect. They obviously believe the hobby, much as we know it, has a reasonably profitable future. We do not know (publicly) what their overheads are, but hints from those that do seem to know, suggest they have kept them low, despite having an incredibly diverse and sophisticated distribution and marketing operation, internationally as well as domestically. But few outside the hobby will have ever heard of them. Their primary attraction was that it was cheap to stock their products, but that is changing with their incursion back into 009 rolling stock, and with the prices of some of their more recent kits and track ranges. Hornby must be aspiring to get to the same level of effectiveness with comparative levels of overhead, as would, I guess, Bachmann. I do not know what Dapol are trying to do (but at least they have experimented with different production methods), and Heljan keep going for the most niche of the nichest products, whose name is Niche. But they seem to sell.

 

Of all these, the Oxford business model, mean and lean, but narrow, (and just a little variable in product verisimilitude and quality), but with apparently solid production facilities, is where they may be heading. Perhaps the clue is in the not-a-merger deal just done and the current CEO. Of all the players, with perhaps the exception of the lurking tiger (geddit?) Bachmann, they have the strongest position from which to pounce. Brexit has, yet again, probably queered the pitch, because I think their strongest option is to re-establish a European subsidiary, rather than what they had been progressing, to keep prices down in that market. Their European brands remain strong, with the recent exception of Electrotren, which has been very quiet of late. But Piko could be nicking the limelight if they don't keep up.

 

The commissioners and new independents are very welcome to our hobby, but we, and they, kid ourselves if they think we cannot do without the Hornby, Bachmann and Peco underpinning. Why do the most Hi-Tec manufacturers of our age, the mobile phone and tablet brigade, still rely on a vast chain of semi-independent high street, bricks and mortar retailers?

[Steamport Southport]

I have no illusion about the public at large, the evidence is available for anyone to see.

 

Yes, some train sets are still sold.  But nowhere near the numbers that they sold in the past for the simple reason that Junior today wants a tablet, gaming system, or any number of other things.

 

If Hornby was able to still sell the train set in any significant numbers then they wouldn't be in the financial mess they are in - they are after all with their stock listing and board and all those other expensive items set up as a mass market toy company.

 

So yes, the tradition is dead.

 

They were spouting all that nonsense backing in the 1970s, and '80s, and '90s, onward. 

 

"Computer games have killed toys". It's total rubbish. You only buy a console or computer once. They still get hundreds of pounds worth of other toys over the year.

 

What has been the biggest selling toy for the past few years? LEGO. What was last years second biggest selling toy? A water pistol (NERF gun). Normal toys still sell.

 

http://uk.businessinsider.com/here-are-the-best-selling-toys-of-2017-2017-10

 

 

 

Jason

[robmcg]

Very interesting reading.

 

I look forward to Hornby's June 2018 statement, I expect it will be full of cliches and positive thinking 'going forward'

 

That said, when I look at the vast range of models Hornby have for sale right now, both direct and in shops, new and second hand, 'we have never had it so good'.

 

Perhaps around 2008 prices were better and quality was a tad higher, or maybe expectations back then were a tad lower?

 

Sadly for some I don't see bricks and mortar shops as part of the future for many sales, but how that will be managed I cannot guess.

[The Stationmaster]

There is an obvious relationship that most of you are missing. If Hattons, Kernow, Rails and the rest of the commissioners of a handful of locos (and wagons but rarely carriages, Kernow excepted) could only rely on those sales for their profit and their ability to invest, they would be bankrupt tomorrow. They rely on the Hornby, Bachmann, Dapol, Peco and a number of other standard lines (not just model rail) to generate both the cash flow and the profits they need. Perhaps they install Chinese accounting walls to ensure these commissions do not affect their primary businesses, but that is illusion. They would have had to fund such models up front in some way, or shown a good creditworthiness upfront at least. 

 

So if the big boys pursue the same business model, most of the current commissioners would be broke, tomorrow.

 

We should also note that Peco, for example, are steadily diversifying and expanding, despite being seen as a minor player, and into niche areas and in matters that require modellers to model, not simply collect. They obviously believe the hobby, much as we know it, has a reasonably profitable future. We do not know (publicly) what their overheads are, but hints from those that do seem to know, suggest they have kept them low, despite having an incredibly diverse and sophisticated distribution and marketing operation, internationally as well as domestically. But few outside the hobby will have ever heard of them. Their primary attraction was that it was cheap to stock their products, but that is changing with their incursion back into 009 rolling stock, and with the prices of some of their more recent kits and track ranges. Hornby must be aspiring to get to the same level of effectiveness with comparative levels of overhead, as would, I guess, Bachmann. I do not know what Dapol are trying to do (but at least they have experimented with different production methods), and Heljan keep going for the most niche of the nichest products, whose name is Niche. But they seem to sell.

 

Of all these, the Oxford business model, mean and lean, but narrow, (and just a little variable in product verisimilitude and quality), but with apparently solid production facilities, is where they may be heading. Perhaps the clue is in the not-a-merger deal just done and the current CEO. Of all the players, with perhaps the exception of the lurking tiger (geddit?) Bachmann, they have the strongest position from which to pounce. Brexit has, yet again, probably queered the pitch, because I think their strongest option is to re-establish a European subsidiary, rather than what they had been progressing, to keep prices down in that market. Their European brands remain strong, with the recent exception of Electrotren, which has been very quiet of late. But Piko could be nicking the limelight if they don't keep up.

 

The commissioners and new independents are very welcome to our hobby, but we, and they, kid ourselves if they think we cannot do without the Hornby, Bachmann and Peco underpinning. Why do the most Hi-Tec manufacturers of our age, the mobile phone and tablet brigade, still rely on a vast chain of semi-independent high street, bricks and mortar retailers?

 

Judging by not very long past published accounts Peco do have a problem with pension debt (not an unusual story for a British company) plus their overall situation was not looking as good as some might think.  But as you say they are diversifying their business and they occupy a key trading role within the hobby with their various agency lines so they are more than a manufacturer in any case.

 

And again you too come back to what amounts to the baggage of overhead which Hornby is carrying in comparison with everybody else in the UK model railway market.  True Hornby is wider than model railways but it should be able to relate its costs to the return it gets from each of its market areas and if it can't do that then it's no wonder it is consuming vast quantities of cash.  I think their problem really comes down to the same old key areas which are always being raised when we discuss them - poor marketing and market placement confusion in the model railway world (they could just as easily segregate their market areas in the way Piko has done and achieve some clarity I would hope); trading on old brand names which now come with baggage in the case of Humbrol where they seem to vary between totally losing the plot then coming up with great new ideas; still not getting their marketing of diecast ranges right; hopefully succeeding with Airfix; offering a range of bought in European model railway brand names where product seemingly only dribbles into the marketplace; and continuing with Scalextric which might or might not make them loadsa dosh.  

 

But against all that what we don't know is what they make in terms of profit on each brand range and what contribution to central overheads is serviced by, or not covered, by that profit.  Knowing those numbers must be part of the key to getting their business right but even then that will only work if they really understand the markets they are working in and what return those markets achieve or can achieve with improved marketing and better products (whatever those products happen to be).

[pheaton]

No it isn't. Don't be silly now.

 

I can guarantee they still sell thousands of train sets through places like Argos and the like. Just Google "Hornby Train Sets" and you will see loads of them for sale from places that aren't model shops.

 

Modellers think that the average person in the street think like they do. They don't.

 

 

Junior wants a train set (or grandad wants to buy him one). They don't go to Hattons, they look online. First place comes up is Argos or Amazon, even Hornby. Bought. Delivered next day.

 

 

 

Jason

They do...........but do they sell? You came here looking for a trainset but we also sell..................

 

this post is meant to be thought provoking....and im really interested in what out retailers on this site think, in that i can talk as a modeller but i dont know really what appears to be shifting....... in terms of hornbys sales volume....i can give my opinion which is the point of this post...so i really really want avoid wailing and gnashing of teeth

 

About me......im a a D+E modeller have been since the early 2000s (which is when i could really afford models) before then i had a basic trainset Hornby class 37 lima hst 117 etc etc.....firstly....IM NOT AN EXHIBITION modeller....esp in standards.....95% of my stock is pristine and 100% of my stock is RTR. its all a mixture of manufacturers.....Hornby, Bachmann, Heljan, and Vitrains.....Lima heritage is confined to 2 rakes of coaching stock and some 31 bodies on Hornby RR chassis.

 

As a customer (im not a retailer remember ) whats my issue with Hornby.......i have in my collection 12 Hornby class 56s 9 Hornby class 31s, 5 class 50s 5 class 60s so its fair to say i have a reasonable amount of investment in the brand.....ive got 2 key problems......

 

1,) Mazak rot

2,) that downright over-complicated coupling arrangement...

 

both of those mean........ive not bought a Hornby model within 6 months of release..... because im losing faith in the brand, Hornby dealt with the class 31 problem as best it could but there production constraints mean that as i see they haven't dealt with it completely...... now the point of this is not to drag either issues up...its to illustrate my frustration with the brand......what does that mean......Hornby don't see my money for a while or they may not see it at all because i might just buy the model second hand...... 

 

compare that to a competitor.....

 

Local model shop "simon (yeah were on first name terms) can i put you down for a tamar".......yes please........ why......because i have 100% faith in the brand......not seen any reported issues with running the model........or the model doing what its supposed to do.....like pull trains without derailing ......and considering that particular model has been available for the best part of a decade... none appear to have fallen apart....

 

 

Question is......am i alone on those thoughts? How many others hold back on Hornby for those reasons?

 

Thats before we get on to price.....weve seen the Hornby 31 go way past 3 figures £130ish being quoted......as one of my fellows modellers rightly pointed out......price is price.....you cant do anything about it 100% correct! 

 

what does that mean.....well it means for me....that Hornby are going to have to work damn hard to see any of my cash.........and i dont know if im alone in those thoughts....since the price rises.....and other issues have come to light have any retailers seen a drop in spending by there top 10% of customers in the shop on new models?

 

if we break that down further....

 

my wages (as a crown servant) have been frozen for over 5 years models have become far less affordable....which means im going to buy less which means Hornby make less profit....

the pocket/birthday/christmas money i give to my son to hypothetically spend on models.......is also less...

the pension im going to have when i retire......well you get the picture

Now im in no way alone in that scenario.....what does this mean for Hornby....your getting less cash.....thats before we take in to account my issues with the brand earlier in this post....

 

Then we get on to what i like to coin "the APT affect"

 

What do i mean by this....these are models that i think Hornby have released with the public in mind not modellers.... and it started out with the APT (some might argue flying scotsman but remember im a D+E modeller ) Why did Hornby release the APT???? if you look at modellers as i see them.....if i said to you.....how about buying a Bachmann 85 on your non electrified layout......you wouldnt do it would you.....so why would you buy an APT??? Was it more aimed at the non trainset owning public because it was the face of BR at the time? How many people were modelling the WCML when that loco came out? .......yes some people just bought it because they liked model trains......but does that make good business sense for Hornby.......did the Hornby apt ever make a profit? the reason i think thats relevant is fast forward to 2012.....what came out......a Hornby 2012 javelin......in trainset form.....(same as the APT)......were the public thinking......blimey its the olympics i must buy a Hornby javelin.......the only time ive seen a Hornby javelin was on James May toy stories......and im wondering...how many people on reading this thread.....bought a Hornby javelin!!!!! Did the Hornby javelin make a profit....????? Have these models contributed to Hornby's financial position?

 

Sometimes i think Hornby have got it right.......in willing to bet the Intercity 125 and the Hornby Flying scotsman has got more normals to buy a model railway than anything else......whats the problem here.......that cow has been milked, slaughtered, and had for sunday dinner.....im wondering if they tried the same train of thought (pun intended) with the APT, Intercity 225, and Javelin....and that's before we get to the toy story trainset!!! im wondering ......are we on the same line of thought with the recent release of IEP? How many of you out there are going to buy an IEP? What made Hornby think the IEP would sell? who models the Great western mainline.......in the 2018 era......are there enough of these people to justify the tooling and commission of an entirely new model right now????? Have any retailers here sold all of there IEPs? Compare this to a traditional diesel class 47, 31......dmu class 101 150...........all safe bets long lasting and tick far more boxes for modellers than the IEP,........

 

On the D+E side.....im yet to see where Bachmann and the others have got this wrong? Now some may say the Heljan 86 was a pup....great good point....but does anyone know where i can buy one from??????........they might have been poorly recieved......but they all sold!!! A more direct comparison could be drawn with the bachman blue pullman......but im wondering.....if the triang pullman didnt exisit.......would the Bachmann one exist?

 

Im talking from my perspective in my area of interest D+E.......im not saying im right....im not saying the above is the hardline according to terence trent d'ardy (thats a nod to andy y's KLF reference ), one of the greatest thing ive got out of rmweb is interesting threads from the wider community....and ill watch this thread with interest and i invite people to disagree with me and want them to put there point across because one of us will be right, and if a manufacturer takes note that's only a good thing....

ill close my post with the following.....

 

If i had to compare my hobby with my industry.....At the moment....Hornby are 3DFX interactive......and Bachmann are Nvidia.....lets just hope that it doesent finish the same way......because without Hornby in my opinion the hobby will suffer!

Edited June 6, 2018 by pheaton

[Mike Storey]

Judging by not very long past published accounts Peco do have a problem with pension debt (not an unusual story for a British company) plus their overall situation was not looking as good as some might think.  But as you say they are diversifying their business and they occupy a key trading role within the hobby with their various agency lines so they are more than a manufacturer in any case.

 

And again you too come back to what amounts to the baggage of overhead which Hornby is carrying in comparison with everybody else in the UK model railway market.  True Hornby is wider than model railways but it should be able to relate its costs to the return it gets from each of its market areas and if it can't do that then it's no wonder it is consuming vast quantities of cash.  I think their problem really comes down to the same old key areas which are always being raised when we discuss them - poor marketing and market placement confusion in the model railway world (they could just as easily segregate their market areas in the way Piko has done and achieve some clarity I would hope); trading on old brand names which now come with baggage in the case of Humbrol where they seem to vary between totally losing the plot then coming up with great new ideas; still not getting their marketing of diecast ranges right; hopefully succeeding with Airfix; offering a range of bought in European model railway brand names where product seemingly only dribbles into the marketplace; and continuing with Scalextric which might or might not make them loadsa dosh.  

 

But against all that what we don't know is what they make in terms of profit on each brand range and what contribution to central overheads is serviced by, or not covered, by that profit.  Knowing those numbers must be part of the key to getting their business right but even then that will only work if they really understand the markets they are working in and what return those markets achieve or can achieve with improved marketing and better products (whatever those products happen to be).

 

Quite agree - we don't know their internal attributions. All we appear to know is that Scalextric has been the problem child, along with, but to a far lesser extent in cash flow terms, Humbrol. But we do know their fixed overheads have steadily declined, but we won't know by how much to date until the AR arrives in a week or two. We do know their marketing in Europe seems to have been relatively more successful than in the UK (if mag reviews and articles are any guide - I have no other source), and it has been focussed on a fairly narrow range of new products (or re-vamped older ones). Perhaps that has indicated the way forward for the UK.

 

We do not yet know what the intentions are of merging the Oxford and Hornby ranges, or indeed rationalisation and separation of quality levels like Piko, or other distinctions. Initial protestations that they will continue to remain entirely distinct entities ring hollow to my mind. Otherwise, what was the point in the 49% acquisition? Why did Oxford need Hornby's money, and why were Hornby prepared to give it to them? Just for production stability? I doubt it.

 

Piko have certainly cleverly priced a three tier, new range of products. We do not yet know how successful sales have been. It appears at first glance, but only from my French, Swiss and Italian sources, that Marklin, Jouef, Rivarossi, REE and other established names, are getting just as much coverage, by virtue of regular new releases (or re-vamps) and discounting has remained similar. Piko's distribution network is not as extensive as Hornby International (except presumably in Germany and Austria) so the jury is out as to whether that strategy will work to Piko's advantage, away from home.

 

We all know Hornby's costs have been too high, but so do Hornby, and they appear to be doing something about that. We will learn more about that in a week or so. But I doubt we will learn much about their new product range strategy from the AR. When we do get some idea, let's hope they get it right this time.

[Legend]

Maybe a solution is to have a mid range series of models , track , stations, fencing etc sold through retailers and a specific , defined high quality range sold direct.

 

I do think that the market has changed dramatically in the last 3 years and that we have now passed a tipping point that makes direct selling essential. They need to do all the other things too though, cut overheads , get a grip on their marketing and above all improve quality , so that people can buy with confidence.

[Widnes Model Centre]

As a retailer, we are a model shop, not a model railway specialist:

 

Three years ago next week, we moved into new premises, larger and with room to expand our stock range. To the left was a vast amount of Hornby model railway products at the front of the shop. To the right was an even larger display of Airfix plastic kits. In the middle was all the Humbrol products, paints, glues, brushes, varnishes etc.

 

Looking at this today. The Hornby products occupy space at the very rear of the shop and that space is decreasing. Bachmann, Farish, Dapol and Oxford Rail now occupy the space where once Hornby took pride of place. There is a distinct lack of products available across all the Hornby brands. Airfix was a sea of red boxes. We have had to remove some of the Airfix shelf strips as there was insufficient stock to fill those shelves. Other kit manufacturers now occupy that shelving. You want Humbrol paints? So do we. They still sell but only as I see it for a very limited time. The Humbrol stand looks as though we have given up on it. Approximately 35 empty rows that used to be filled every day. Other manufacturers now occupy the paint displays and they are re-stocked every single week. Scalextric still sells but not as much as it used to.

 

Hornby train sets? Christmas and slowly throughout the rest of the year. Not a single specific set containing a diesel locomotive. We no longer stock the Flying Scotsman loco. Hornby RRP is £110.99p, a nearby retailer sells them for half that price. I think we all know the reason for that.

 

Airfix, not a single Lancaster Bomber is available at this time. New releases this year have not been supplied in the numbers we have ordered. Sold out and so far unable to replace them. Airfix really sells well but the range has been decimated and availability as previously stated is poor. Airfix have thankfully recently announced the return of the classic, vintage kits. They cannot come quickly enough for us.

 

Despite running out of some Humbrol acrylics in November 2016 (not a typo) we have had no communication from Hornby whatsoever as to when if ever we are going to receive Humbrol stock. If anyone from Hornby is reading this please let us know?

 

Corgi? No thanks, Oxford Diecast has that mantle.

 

I was talking to Dave Jones in the shop this week and he was amazed when I pointed out how our shop layout had changed as it evolved around Hornby and their associated products.

 

What does the future hold for model shops? Various posts on this forum suggest that we no longer need model shops and neither does Hornby. We have just extended our lease, we have hope for the future. We would very much like to have Hornby as part of that future.

[jjb1970]

You only have to look at the news of famous high street shops which are in dire straits to see that the crisis on the high street has spread way beyond specialised niche shops. Now people seem to be questioning the future of department stores. If I look at similar specialised products to model trains which I buy, such as hi-fi equipment, cycling gear etc then I see the same shift to online shopping and consolidation into fewer sellers but those sellers who are thriving offer a range of products that very few bricks and mortar shops can match. In the case of books it is difficult for a physical shop to compete with rivals which offer next (or even same day) delivery on a vast range of books together with some pretty steep discounts. I think once people get accustomed to the idea of online shopping then they increasingly see it as the default option for many things. Personally I don't like trudging round shops, I know some do but I don't and if I can buy what I want without making a trip to the shops I'll happily do that. Which isn't to say that there is no future for bricks and mortar shops, as clearly some of them continue to thrive, but those that thrive tend to offer something more than just putting goods on a shelf and taking the customers money. That might be first class service, after sales support, value added stuff like reading groups and providing a good coffee shop in store etc but if there is a reason to go to a shop then it seems people will still make the effort. The problem is that whatever we might like to believe the majority of shops don't, and never did offer those higher value services and care. There is a mythical, fabled thing of reverence on most cycling forums called the "LBS", or local bike shop, with lots of people bemoaning the decline of the LBS and how it was a pillar of the community, well at the risk of sounding like a complete heartless b'sterd the reason many of them went to the wall and aren't particularly missed is because they weren't very good and the online sellers offered a wider range, better prices and for the most part better service to boot. I can't help feeling the same about model shops. I use a couple of online model shops for my OO purchasing, both are bricks and mortar shops as well anyway but they meet my needs, offer terrific customer service and to be quite honest I really don't miss a local model shop. I can buy scenic stuff, paint, adhesives etc easily enough locally at non model train shops.

[Legend]

I think JJBs correct. The High Street is in crisis. Maybe clothes and shoe shops will survive , as I like to try things on first before buying . In Glasgow it’s noticable that big shops eg BHS have gone and the prime retail space they left is still free. What they are doing in StEnochs shopping center is converting part of it to leisure ie restaurants andanother cinema complex.Glasgow certainly remains a busy place. I think increasingly people are going to city centres for days out. That probably involves shopping for clothes but also having a meal , maybe take in a sports venue,and going to cinema . That seems to be what’s going on in Glasgow.

 

I hope that we can maintain independent model shops, book shops etc , but the evidence is to the contrary . As I said getting back to model Railways I think we have now passed a tipping point with all these new commissioners , small companies selling direct. I’ve always fancied running a shop but the reality is it must be hell in retail at the moment.

 

On lack of availability of Hornby items, sounds like their manufacturing capacity issues are with us again. Add that to the list of things they need to sort out.

[Dunsignalling]

 

 

Hornby train sets? Christmas and slowly throughout the rest of the year. Not a single specific set containing a diesel locomotive. We no longer stock the Flying Scotsman loco. Hornby RRP is £110.99p, a nearby retailer sells them for half that price. I think we all know the reason for that.

 

 

 

Which reinforces the impression I've been gaining for some time, that Flying Scotsman has become the new Thomas in the eyes of the non-enthusiast population.

 

John

[JSpencer]

The high streets were killed off by high rates and difficulty in getting there. Yeah you can take the bus but hardly practical for carrying all the stuff back home, you really need a place to park, but parking spaces are all swallowed up by people living near there (there are more cars per family, garages are converted to living space and so on). Charities seem to be exempt from a lot of these charges meaning they are taking up much of the high street. That compounds the problem further as they don,t do what I really want. To reduce costs and give customers parking, the big names in highstreets moved out of town.

 

It used to be a pleasure to go to the high street, now its a chore and a bore (certain historical places exempt). None of this is Hornby's fault, just ill thought out bad politics. I remember seeing proposals for new estates in Elephant & Castle in the late 90s. "where do people park their cars ?" I asked. The reply was "To keep pollution down, people living here will not have cars and will not need them thanks to excellent public transport". "You really don't live in the real world do you?" came my exclamation.

 

But Hornby and others do need to adapt their packaging, and to a certain extent they have. Today's boxes have twice the volume compared with 1990.

[APOLLO]

Retail is in a pickle everywhere. Not model railways but --

 

HOUSE OF FRASER is closing stores to survive the current crisis hitting the British high street, in recent news. Which stores are closing? Where will the closures be? It was revealed today the company is closing over half its stores, 31 in total, including its Oxford Street branch. This could effect 6,000 jobs

https://www.express.co.uk/life-style/life/954663/house-of-Fraser-stores-news-closing-closures-which

 

Brit15

[adb968008]

.

Edited November 6, 2018 by adb968008

[Legend]

 

The only way forwards I can think of for Hornby is to change the market, innovate adopt the technology today’s kids are using and incorporate it into their range.

 

But that's the kids market. Apart from a trainset or two wouldn't you be better off recognising that its lost and concentrate on the older enthusiast?

Edited June 7, 2018 by Legend

[The Stationmaster]

The post from Widnes Model Centre is a telling indictment of Hornby to which we must add the other side of the coin - certainly as far as model railways go - where they have stuck (and now seemingly even reverted to) Year 2 and Year 3 runs or early re-runs where the market is sated.  Clearly there is an alarming truth behind these two extremes - of an inability to produce and supply stock which does shift and an inability to read the market causing them to re-supply things which shifted on release but won't go in such numbers when they are re-run only a short time later.

 

So we come back to marketing and production (and again a question of where the money has gone if it wasn't spent in those key areas?).  To which, if my information is still correct, we can add that shops can 'phone Hornby with orders and be told 'we don't know if we've got any of those, I'll have to check and let you know'.  At the same time, if what has leaked out is to be believed, Hornby's reps were at one time recently taken off the road and told to stay in the office and deal with customers by 'phone - an interesting, and telling, contrast, with a Bachmann rep who I met recently who had a car full of brown boxes which had contained various samples lent to a shop for display purposes.  I can remember talking to reps in shops in the past and they always wanted to know what the customer was interested in or was buying - it's called market intelligence I believe - and you won't talk to many end customers if you spend all your time at your base office on the 'phone.

 

LCD made a good move by not indulging in the bulk fire sale early this year but the other side of that coin is that there is now a pile of £20 notes sitting on warehouse shelves - for which Hornby is paying out even more £20 notes.  A good decision despite its cost - yes I still think so.  The bad decision was ordering the stuff in the first place when those shelves could have been occupied, in rotation, by the lines Widnes Model Centre (and other shops) need continuing resupply of although taht was last year's management of course.

 

It is obviously far easier to say all this than to do it but the overwhelming impression, apart from the things currently occupying those shelves, is that last year Hornby had a grip on some new and positive marketing ideas which were leading to orders and an approach which kept the market interested and 'excited' (aka frothing) whereas this year it has retreated into some of the good bad old ways of 'fortress Horrnby' while the rest of the market is outside having a party and busily chasing that shrinking pile of fivers.  Very telling that an event I attended recently was graced, in some way or other, by every major manufacturer selling into the UK model railway retail market except one - need I say which one was missing? 

[The Stationmaster]

But that's the kids market. Apart from a trainset or two wouldn't you be better off recognising that its lost and concentrate on the older enthusiast?

Not necessarily.  It really boils down to two things - do you chase the money that is currently there (while it lasts) or do you lay down some seed corn for the future?   Perhaps if you have £12 million to invest you could do both; but not if you're spending it paying for space on shelves in a warehouse.

[Joseph_Pestell]

Looks like 'bet the farm' time. You don't set up to borrow like that on Hornby's scale of business casually. One way or the other that money will be used to buy 'something(s)' which the plan projects will "Rebuild the brands" and thus turn the business around. Purchasing a manufacturing facility in PRC? 

 

Or perhaps repatriating production nearer to home.

[Joseph_Pestell]

So, the 75% shareholder lends money to itself at very generous rates. If I were HMRC, I would be taking a close interest in this. Where are Phoenix based?

[Joseph_Pestell]

I'm not sure how Hornby International are doing profit wise these days, it was said that their operation in Spain which managed the international brands had become some sort of bottomless pit swallowing money a while ago when they really were at a low ebb and struggling with finding a factory that could make their product, struggling to supply stuff, design clever etc. However on the other hand their international brands can work to exceptionally high standards. They seem to concentrate on markets that are probably not the most lucrative in HO but within those markets they seem to be very highly regarded. I'm a big enthusiast of Italian HO and Rivarossi and Lima Expert Italian outline is superb. So I think there is a lot of potential in their international brands.

 

So do I. But I am far from convinced that Hornby are the people to make the most of that potential.

[GordonC]

I think there's also another thing which will cause them problems. In the last few years with a greater move to pre-orders paying deposits or even in full up front from commissioners and where production runs can sell out in a very short period of time ... if I know something is coming out that I really want, I'll keep money aside for that. If we have a fixed pot of hobby cash, then keeping money set aside will leave Hornby and regular shop purchases competing for a smaller slice of pie with 'normal catalogue' models.

 

Thats bound to be having an effect on sales for traders at exhibitions and normal model shops