Not quite...
Assume Hornby pay £50 for a product.
Assume that Hornby sell this to the Retailer for £100, therefore Hornby have made a £50 profit.
The Retailer sells the product for £150, therefore they also make a £50 profit.
Hornby decide to cut out the Retailer & sell direct for the same £150, they make a £100 profit.
More realistically they undercut the retailer, who may be selling at a discount anyway, and sell the product for £120 thus making a £70 profit.
In the above scenario Hornby make more profit by selling direct but they may be cutting off their nose to spite their face.
As a long-term Hornby Shareholder I really hope that they sort themselves out.