Hornby APPOINTS NEW CEO

[JohnR]

Not to mention the opportunity cost of missing a production slot. A factory may even charge you even if nothing has been produced to ‘reserve’ the slot.

 

I’m with Phil on Option B.

Then you factor in changes to CAD based on feedback into your schedule. And since Oxford are supposed to own their own factory, are production slots as important as they are when Hornby is getting a 3rd party to produce for them?

[Nearholmer]

To me, it looks like positive news, of people who really understand the industry and hobby being 'put in charge'.

 

I wonder how they will feel about my £2.50 offer to buy the BassettLowke brand name from them? It's doubtless worth more to the right person, but there is a limit to what I can spend just for the fun of owning it!

[Clearwater]

Then you factor in changes to CAD based on feedback into your schedule. And since Oxford are supposed to own their own factory, are production slots as important as they are when Hornby is getting a 3rd party to produce for them?

If the factory’s sitting there idle, then you’re still incurring the fixed cost... can you find a third party customer at short notice??

[SteveC32]

Ain't necessarily so, the comparator is unit sales price x number of units - gross cost of production and distribution. Lower unit profit is a killer unless the reduced prices boost volume sufficiently for the total profit to exceed what can be realised under a Low Volume, High margin regime. 

 

Sorry, but it's an industry that is almost certainly in gradual decline in that its customers are dropping off the perch faster than new ones can be attracted. Hornby et al need their slowly shrinking but largely still prosperous customer base to buy more models each, hence the explosion of previously unmodelled locomotives coming to market.  What we have been seeing is essentially "Making Hay while the Sun shines".

 

That's the simple, brutal reason why most players need to make greater unit profits.

 

The days when we had a choice of about a dozen locos from a manufacturer (and the same dozen for a dozen years without even a change of name or number) are thankfully long gone.

 

Quite simply, the range on offer nowadays means we can buy what we really want rather than choose what gets nearest to it.The flip side of that coin is that overall sales of the niche locos currently in vogue are much more finite, however they are priced. Low volume / High margin is, increasingly, the only game in town. 

 

John

                                                                    

I do understand the financial model, hence why I wrote the post!

 

But the reality is if you price your product right with sensible margins you will shift volume. I’ve lost count of the number of retailers that have said that the price increases (from all manufacturers) have affected their sales, one quote heard many times is “where a customer used to buy 3 of something they’re now only buying 2”. The fact that the manufacturers also operate a cartel pricing model with the retailers (discounting more than the specified amount will mean supply is restricted or ceased altogether) is not good for consumers or themselves either as it stifles demand. I’m sure the CMA would have an issue with that if somebody told them about it

 

I’ve also heard retailers say that pricing is killing young entrants into the hobby, so in effect the manufacturers are creating their own self fulfilling prophecy about the future of the hobby.

[adb968008]

I’m surprised everyone thinks Oxford rail will dissapear in this relationship.

 

Its Oxfords CEO Coming to Hornby, not vice versa.

 

Oxfords tip toe into OO, has to me been a slow drawn out process, but gazing from a higher view, setting up an enterprise and showing its successful intervention into a new market is a good way to impress an outside investor, who thinks you’ve got potential...regardless what you think of the product, they have demonstrated it, even if the Mk3’s seem to me to have been stalling for time..this now makes sense.

 

I only saw reference to Technical expertise and Marketing/sales consultant roles coming to Hornby, I didn’t see business strategists or finance coming to a company that has both a good market, good products but a poor financial record and business strategy.

 

If I wanted to take some assets from a company to my own, the two hires I need are the guys who knows what sells, and the guy who knows what exists.

If I wanted to turn the company around, I need financial advisors and strategists to sweat what assets I have in the most financially efficient way...but that’s not what I saw.

 

I could perhaps suggest, maybe those experts could identify the successful and detailed toolings and move them to Oxford as a brand for collectors, together with Corgi perhaps, let Oxford focus on these (mostly non-Railroad toolings since 2000)

 

Then Hornby & Scalectrix, with its well known high street brands could focus on the Railroad market, (older Hornby, Lima, airfix ranges) plus track and accessory ranges for which it’s been known for generations... a much smaller but focussed company using its brand name where it’s known most, the high street, mass market, with a much lower cost base, asset range and able to get a reliable source of production.

 

I would suspect Other manufacturers could be concerned by this announcement, similarly if restructured correctly, both companies could become takeover targets, by other overseas Railway modelling interests.

 

Minnows generally don’t eat Whales, unless the minnow has an even bigger whale to protect it.

 

I think Oxford may be the bigger winner here, if not why would they be interested ? And it’s not as if they need to sell out, and helping a competitor isn’t normal.

Edited October 4, 2017 by adb968008

[Gerald Henriksen]

I do understand the financial model, hence why I wrote the post!

 

But the reality is if you price your product right with sensible margins you will shift volume. I’ve lost count of the number of retailers that have said that the price increases (from all manufacturers) have affected their sales, one quote heard many times is “where a customer used to buy 3 of something they’re now only buying 2”. The fact that the manufacturers also operate a cartel pricing model with the retailers (discounting more than the specified amount will mean supply is restricted or ceased altogether) is not good for consumers or themselves either as it stifles demand. I’m sure the CMA would have an issue with that if somebody told them about it

So company A can sell with a profit margin of £10 and they will shift 300 units, so a profit of £300.

 

Alternately A can sell with a profit margin of £20 and only shift 200 units, but have a profit of £400.

 

Volume does not equal profit.

 

I’ve also heard retailers say that pricing is killing young entrants into the hobby, so in effect the manufacturers are creating their own self fulfilling prophecy about the future of the hobby.

 

I doubt retailers really know what is causing the changes, but it can be pretty much guaranteed that it is not a single issue.  Childhood budgets (and even teens/early 20's) aren't just available for trains but also now need to cover phones, apps, laptops, and all sorts of other things that didn't exist as necessities 20 years ago.

[Dunsignalling]

I'm only interested in the one without any metal sheeting .

It would certainly be easier to plate a fully planked one than plank a plated one, if you get my drift.

[Gerald Henriksen]

I’m surprised everyone thinks Oxford rail will dissapear im this relationship.

 

Its Oxfords CEO Coming to Hornby, not vice versa.

 

I only saw reference to Technical expertise and Market growth consultants, I didn’t see business strategists or finance coming to a company that has both a good market, good products but a poor financial record and business strategy.

 

I could perhaps suggest, maybe those experts could identify the successful and detailed toolings and move them to Oxford as a brand for collectors, together with Corgi perhaps, let Oxford focus on this (mostly non-Railroad toolings since 2000)

 

Then Hornby & Scalectrix, with its well known high street brands could focus on the Railroad market, (older Hornby, Lima, airfix ranges) plus track and accessory ranges for which it’s been known for generations... a much smaller but focussed company using its brand name where it’s known most, with a much lower cost base, asset range and able to get a reliable source of production.

 

Oxford Rail are known (by their track record) for producing cheap, inaccurate railway models.

 

Why would you want to move the highly detailed, accurate Hornby models to a company with that reputation?

 

Why would you want to move the product line that is helping to save the company to a competitor? (*)

 

Why would you want to saddle Hornby with a struggling division(**), which after getting rid of the profitable parts, would likely further deteriorate the Hornby financial situation?

 

 

* from the Hornby 2017 Annual Report:

 

Building on the strong profitability of the Hornby and Airfix brands

 

** again, 2017 Annual Report:

 

Improving Scalextric performance is a priority

 

We don't know, because the published info doesn't tell us, what Hornby's problems are but we can guess that Scalextric is at best neutral, at worse money losing, and that certainly a reasonable part of their financial problems is a result of the debt Hornby has acquired over the last several years, a significant portion of which was down to bad decisions made by previous management and not related to their Train or Airfix brands performance.

[Dunsignalling]

I’m surprised everyone thinks Oxford rail will dissapear im this relationship.

 

Its Oxfords CEO Coming to Hornby, not vice versa.

 

I only saw reference to Technical expertise and Market growth consultants, I didn’t see business strategists or finance coming to a company that has both a good market, good products but a poor financial record and business strategy.

 

I could perhaps suggest, maybe those experts could identify the successful and detailed toolings and move them to Oxford as a brand for collectors, together with Corgi perhaps, let Oxford focus on these (mostly non-Railroad toolings since 2000)

 

Then Hornby & Scalectrix, with its well known high street brands could focus on the Railroad market, (older Hornby, Lima, airfix ranges) plus track and accessory ranges for which it’s been known for generations... a much smaller but focussed company using its brand name where it’s known most, the high street, mass market, with a much lower cost base, asset range and able to get a reliable source of production.

 

I would suspect Other manufacturers could be concerned by this announcement, similarly if restructured correctly, both companies could become takeover targets, by other overseas Railway modelling interests.

 

But I think Oxford may be the bigger winner here, if not why would they be interested ? And it’s not as if they need to sell out.

I think most overseas "railway modelling interests" have quite enough problems of their own without taking on a UK operation that is still very much in recovery mode.

 

A fair few European ones went under some time back, with several well-known brands ending up with Hornby.

 

If there is any "takeover" my hunch is it may well turn out to be the reverse kind, with the leaner, fitter Oxford company emerging as the dominant partner.  Keeping the best and most profitable bits of Hornby's back catalogue, plus the R&D (where they appear to be somewhat weak themselves), and scrapping or selling off everything but the railway and Airfix divisions.

 

 

John

Edited October 4, 2017 by Dunsignalling

[Nearholmer]

Yes, well, scalectrix would be better if it actually worked. I bought my son a fairly fancy set for his birthday about three years ago, and had to exchange it twice before we got two cars that lasted more than thirty minutes before going up in a puff of smoke. If this random and tiny sample represents their QC, and attrition rate, it's no wonder they have to charge so much for it.

Edited October 4, 2017 by Nearholmer

[adb968008]

Oxford Rail are known (by their track record) for producing cheap, inaccurate railway models.

 

Why would you want to move the highly detailed, accurate Hornby models to a company with that reputation?

 

Why would you want to move the product line that is helping to save the company to a competitor? (*)

 

Why would you want to saddle Hornby with a struggling division(**), which after getting rid of the profitable parts, would likely further deteriorate the Hornby financial situation?

 

 

Reputation is perception, taking off the rose tinted hobby glasses, and put on a raw business head..

Oxford makes money, Hornby loses money.

Oxford has clear strategy, Hornby’s is at best ambiguous, at worse Extremely diverse.

Oxfords expertise is being given the opportunity to influence a much larger company that’s struggling.

 

I kind of feel Hornby is fighting too many wars on to many fronts at the same time.

 

If separating a multilayered company into several divisions of excellence and failure..

 

merging the successful super detail toolings to a successful company with its own production facilities is putting strong with the strong, and serves a known specialist market, and steers away from the high street market that is less interest in detail, price sensitive, misunderstood but is the only brand name they know.

 

Same again for Corgi, which Oxford has been competing aggressively and successfully, makes sense to combine.

 

Putting Hornby’s name, with a cheaper range to a high street market that is highly competitive and price sensitive, but is the strongest name for the range in the high street.. your again putting strong with the strong... here i’d See Hornby, Scalectrix, Humbrol, Airfix etc.

 

Then weaker brands can either be paired down or sold off... (there’s nothing compelling the high street brand not to include overseas HO toolings in that high street range too if they were cheap enough.. think like atlas editions, indeed it may even be a selling point, remember HO/OO means nothing to John Doe).

 

If their was a higher investor, with interests held in both companies, moving assets around centres of excellence is a good way to restructure and benefit from both companies strengths and reducing risk, and ultimately the bottom line for the investor.

 

Put it another way, if simply put, Hornby eats Oxford, how does 2 deans goods, radials, mk3’s even motorrails add value, profitability, sales and efficiency to Hornby? Oxford is doing nicely, so it doesn’t need to sell up or give their IP away cheaply. The Oxford name, nor is its customer list isn’t of value to Hornby, so all that remains is a factory and a competing range of model vehicles... and whilst that’s very useful, it doesn’t solve the business and financial problems, indeed it adds more debt to the pile.

 

The alternative, is the management moves house from Oxford to a bigger home needing renovation at Hornby, but renovations aren’t cheap and Oxfords profits won’t cover it, which means pairing Oxford down or selling it off...which just doesn’t make sense... so there must be bigger money than Oxfords here, what’s been bought here for Hornby is skill and expertise, and maybe a factory but what is that price ? -50/50 split ?

 

 

Finally food for thought, If Hornby did acquire a factory, and it ramped up.. that would release a lot of spare manufacturing capacity in China with the others used today.. which could bring even more competition, or lowered manufacturing pricing which reduces the benefits you just gained.

Edited October 4, 2017 by adb968008

[coachmann]

There's little if anything wrong with Hornby's newer locos and rolling stock and their railway colours are improving, so what they need is more people who know their stuff. It is doubtful if Hornby would have dropped clangers with a Dean Goods, but that is academic. Oxford is producing it and as they have their head screwed on, it will be a good seller like many of Oxfords other models.

 

Hornby needs people who A) can identify a market, B) design the model in such a way that assembly time is minimal, C) arrive at a price that will sell everything that is produced and deliver a darn good profit, and D) have a marketing man who can sell and tell a good story!

 

Maybe that is what they are doing right now.

[4630]

There's little if anything wrong with Hornby's newer locos and rolling stock and their railway colours are improving, so what they need is more people who know their stuff. It is doubtful if Hornby would have dropped clangers with a Dean Goods, but that is academic. Oxford is producing it and as they have their head screwed on, it will be a good seller like many of Oxfords other models.

 

Hornby needs people who A) can identify a market, B) design the model in such a way that assembly time is minimal, C) arrive at a price that will sell everything that is produced and deliver a darn good profit, and D) have a marketing man who can sell and tell a good story!

 

Maybe that is what they are doing right now.

 

 

I completely agree with your A to D list there, but would add;

 

E) Manage effectively the relationship with their overseas manufacturers to ensure timely product delivery

 

F) Proactively rebuild and develop the mutual business relationship with their 'bricks and mortar' distribution channel

[jjb1970]

However this plays out it should be interesting. Although I anticipate some form of tie up between Hornby and Oxford (either a full merger or taking a shareholding, it isn't just the Torygraph that ran the story about a Hornby - Oxford merger, quite a few papers and media channels ran with it) it is unclear what the results might be.

 

If it was me I'd retain the Hornby brand. Profit or no profit it is still the only British model train brand recognised outside the hobby, it does still have a lot of goodwill from the modelling and collector communities and they're rapidly rebuilding their reputation for producing models to very high standards after a shaky couple of years in the design clever period. Oxford rail just isn't in the same class in terms of brand reputation and recognition. Where I see Hornby being of interest to Oxford is the Corgi range and if Corgi are struggling as rumours indicate then Oxford may have the expertise needed to put that range back on track.

 

The positive in this is that it does offer some assurance that Phoenix see the future of Hornby group as a supplier of products to the modeller and collector markets rather than going down market to make toys like that activist investor was advocating a few months ago.

[Gerald Henriksen]

Reputation is perception, taking off the rose tinted hobby glasses, and put on a raw business head..

 

I find that insulting.  I don't have "rose tinted hobby glasses", and try to base everything on facts.

 

Fact: Oxford Rail makes inaccurate/incorrect models

 

Fact: Oxford Rail makes cheap (or affordable depending on your view) models

 

The fact that many people don't care about those inaccuracies doesn't change the fact that they exist, and that Oxford Rail is easily the only current manufacturer to consistently release models with often significant errors on them.

 

It also doesn't make business sense to take a brand name, known for cheap models, and then try to turn it into a brand of high end, expensive, models when you already have those high end models with a brand that they are known for.

 

The reality is simply this - given the Oxford Rail track record there will be few if any customers of high end, accurate, detailed models who will pre-order an announced future model on the Oxford Rail brand because the brand means everything but high-end, accurate and detailed.

 

Similarly, all of the customers who do like Oxford Rail would be yelling blue murder if Oxford Rail suddenly announced a new model with the high-end prices you seem to want them to start offering.

 

I think the "rose tinted" glasses, if they exist, belong to those who think the way to return Hornby to glory is to abandon the profitable high-end models and return to the almost dead train set market.

 

Oxford makes money, Hornby loses money.

 

Not necessarily relevant to your arguments.

 

The real question is why Hornby loses money, and a lot of will be down to the debt incurred by (now several generations) previous management, and the interest payments on said debt.

 

What we do know, again fact not "rose tinted", is that the railway division and Airfix are the highly profitable parts of the company and spinning those off to a competitor will not make the Hornby shareholders happy.

 

Putting Hornby’s name, with a cheaper range to a high street market that is highly competitive and price sensitive, but is the strongest name for the range in the high street.. your again putting strong with the strong... here i’d See Hornby, Scalectrix, Humbrol, Airfix etc.

 

There is no "high street" market vs "specialist" market for model railways.

 

Model Railways are a niche product which are sold via specialty retailers, whether it be a more affordable product like the Railroad line or the higher end detailed models.

 

 

 

If their was a higher investor, with interests held in both companies, moving assets around centres of excellence is a good way to restructure and benefit from both companies strengths and reducing risk, and ultimately the bottom line for the investor.

 

Wrong, its a good way to make the lawyers rich as the lawsuits get filed.

 

Do you really think the Hornby shareholders would stand by and allow Phoenix and the new CEO to siphon off the profitable parts of the company to Oxford, leaving the weaker parts behind?

 

 

Put it another way, if simply put, Hornby eats Oxford, how does 2 deans goods, radials, mk3’s even motorrails add value, profitability, sales and efficiency to Hornby?

Well, the 2 radials turns into a high end model (Hornby) and a Railroad model (Oxford).

 

Mk3s difficult to say as they are both Railroad quality, but the fact that the Oxford tooling is newer might benefit it though it depends on how many variants are currently tooled vs only potential future tooling.

 

But the facts are this is mostly irrelevant because there is only two ways for this to go:

 

1) the companies remain as they are, separate, and the new CEO somehow manages to navigate the conflicts of interest without bringing either government interest or shareholder lawsuits.

 

2) Hornby buys Oxford.

 

Oxford can't buy Hornby (they don't have enough money, and the minority shareholders of Hornby already refused to sell out to Phoenix so won't sell to Oxford presumably without a lot more money.

 

The fact that Hornby is a stock market listed company with a lot of shareholders limits the possibilities.

 

Oxford is doing nicely, so it doesn’t need to sell up or give their IP away cheaply.

Partially an assumption. While Oxford may be doing well, it doesn't mean the Oxford Rail division is doing well.

 

 

 

 

[wombatofludham]

 

The fact that many people don't care about those inaccuracies doesn't change the fact that they exist, and that Oxford Rail is easily the only current manufacturer to consistently release models with often significant errors on them.

 

 

 

No, Hornby have released inaccurate models.  Since when has the Mk2e had a visible chassis?  FGW HST buffet cars no roof mounted ventilators?  Bachmann have also released locos with inaccuracies (how many times did they re-tool the 37?  Twice?) and people complained about the over the top roof bars on their Mk1s, and the undersize windows on the Class 101 diesel multiple unit.  Don't even get started on Heljan, the Class 86 with the cab window rake wrong, bodyside grilles wrong, the National Grid pylon for a pantograph, or the first release of the Class 33, or livery foul-ups on their triple grey Class 58s.

 

​Oxford are just joining a long queue of manufacturers who have made and continue to make silly mistakes.

[Gerald Henriksen]

No, Hornby have released inaccurate models.  Since when has the Mk2e had a visible chassis?  FGW HST buffet cars no roof mounted ventilators?  Bachmann have also released locos with inaccuracies (how many times did they re-tool the 37?  Twice?) and people complained about the over the top roof bars on their Mk1s, and the undersize windows on the Class 101 diesel multiple unit.  Don't even get started on Heljan, the Class 86 with the cab window rake wrong, bodyside grilles wrong, the National Grid pylon for a pantograph, or the first release of the Class 33, or livery foul-ups on their triple grey Class 58s.

 

​Oxford are just joining a long queue of manufacturers who have made and continue to make silly mistakes.

 

I didn't express myself clearly.  When I said current manufacturer I meant the only manufacturer to consistently release inaccurate models over the current period, which would be about the last 5 years (and obviously older tooling doesn't count as they are re-releases, often in the Railroad range, and often known to be problematic models from a different era).

 

And yes, in the last 5 years there have been models with problems - but, unlike Oxford, it hasn't been every single model.

 

Yes, Heljan have had a on and off record, but just as they have had bad models like the Class 86 they have also had good models.

 

Yes, Hornby screwed up the Mk2e - but in that same time frame we have had the excellent Peckett amongst several other newly tooled models.

 

In this current period (roughly post design clever) most of the models released have upped their game, perhaps in part due to the increased competition for the modeling dollar with Rapido, Realtrack, Revolution, DJM, and others entering the market.  And I give full credit to Hornby, who I was very critical of during the design clever period, for stepping up and dramatically improving both the models they are putting out and their communication with the modeling community.

[Dunsignalling]

Reputation is perception, taking off the rose tinted hobby glasses, and put on a raw business head..

Oxford makes money, Hornby loses money.

Oxford has clear strategy, Hornby’s is at best ambiguous, at worse Extremely diverse.

Oxfords expertise is being given the opportunity to influence a much larger company that’s struggling.

 

I kind of feel Hornby is fighting too many wars on to many fronts at the same time.

 

If separating a multilayered company into several divisions of excellence and failure..

 

merging the successful super detail toolings to a successful company with its own production facilities is putting strong with the strong, and serves a known specialist market, and steers away from the high street market that is less interest in detail, price sensitive, misunderstood but is the only brand name they know.

 

Same again for Corgi, which Oxford has been competing aggressively and successfully, makes sense to combine.

 

Putting Hornby’s name, with a cheaper range to a high street market that is highly competitive and price sensitive, but is the strongest name for the range in the high street.. your again putting strong with the strong... here i’d See Hornby, Scalectrix, Humbrol, Airfix etc.

 

Then weaker brands can either be paired down or sold off... (there’s nothing compelling the high street brand not to include overseas HO toolings in that high street range too if they were cheap enough.. think like atlas editions, indeed it may even be a selling point, remember HO/OO means nothing to John Doe).

 

If their was a higher investor, with interests held in both companies, moving assets around centres of excellence is a good way to restructure and benefit from both companies strengths and reducing risk, and ultimately the bottom line for the investor.

 

Put it another way, if simply put, Hornby eats Oxford, how does 2 deans goods, radials, mk3’s even motorrails add value, profitability, sales and efficiency to Hornby? Oxford is doing nicely, so it doesn’t need to sell up or give their IP away cheaply. The Oxford name, nor is its customer list isn’t of value to Hornby, so all that remains is a factory and a competing range of model vehicles... and whilst that’s very useful, it doesn’t solve the business and financial problems, indeed it adds more debt to the pile.

 

The alternative, is the management moves house from Oxford to a bigger home needing renovation at Hornby, but renovations aren’t cheap and Oxfords profits won’t cover it, which means pairing Oxford down or selling it off...which just doesn’t make sense... so there must be bigger money than Oxfords here, what’s been bought here for Hornby is skill and expertise, and maybe a factory but what is that price ? -50/50 split ?

 

 

Finally food for thought, If Hornby did acquire a factory, and it ramped up.. that would release a lot of spare manufacturing capacity in China with the others used today.. which could bring even more competition, or lowered manufacturing pricing which reduces the benefits you just gained.

AFAIK Hornby don't own a "home" any more. The Margate premises were sold some while ago and the visitor centre remains (for now) as a tenant of the new owners, following the abandonment of the planned move to Ramsgate. Their current HQ is leased and distribution is contracted out so they don't have/need a warehouse of their own.

 

The upsides to all this are bringing together Oxfords sharper business acumen and probably their factory (though it may not be big enough to take on all Hornby's manufacturing requirements right away) with Hornby's excellent R&D department.

 

I suspect the new CEO has pretty definite ideas on how to blend the two companies' strengths and eradicate the weaknesses of both. Simon Kohler is certain to figure strongly on the model railway side. I don't imagine he would have been asked to return without active approval and encouragement from the new boss. Equally, I don't think he would have agreed to do so unless he had a pretty good idea of, and concurred with, the intended direction of travel.

 

One way of splitting everything and providing better differentiation in the marketplace might be to keep Hornby for the premium models and rebrand Railroad under the Oxford Rail banner. The more interesting conundrum will be how to unite the Diecast side (if indeed it will be). There isn't actually that much overlap between Oxford and Corgi in other than in 1:76 scale PSVs, 1:72 scale aircraft and 1:43 scale cars. In OO, Corgi Trackside is effectively moribund and Pocketbond  Classix, Oxford's only direct competitor in the 1:76 scale car market, has passed to the Bachmann group, where it seems to have been placed on the back burner.

 

My guess is that the ranges will be rationalised and the various scales/categories split more logically between the brands with Oxford Diecast becoming the brand for everything in N and OO (OOC has always been a rather wishy-washy name IMHO) and Corgi for the aircraft, plus the 1:50 trucks and buses. Quite how they will deal with the 1:43 cars may be more difficult as this is where the two most directly meet head to head and neither currently markets everything under a unified brand anyway.  

 

John

Edited October 6, 2017 by Dunsignalling

[ruggedpeak]

‎

Oxford make money selling cheap and cheerful model cars and trucks etc that are shiny and colourful and at prices that means much of their range are impulse purchases ie £5. They also seem to flood the market with stock, presumably as they are so cheap to produce compared to a small wagon. ‎

‎

I don't ever recall anyone rivet counting an Oxford 1:76 Mini or Fiesta.  Fine for plonking on a layout as scenery but not subject to anything like the scrutiny of roling stock ‎

‎

As Oxford are finding (in the media at least) the 'almost good enough'‎ may not cut it in the current rail market. The concern is that Hornby don't adopt the same 'almost good enough' approach. This seems to be one of Oxford"s core competences, producing okish models at prices below competitors. The road vehicles range was exploiting a gap in the market for decent, relevant vehicle models, however Oxford Rail is competing in a well established market with both incumbents and aggressive new entrants. A very different ballgame. We don't know if the Rail division is profitable so don't know if this strategy is working. My fear is Oxford's MO is more Northern Nellie than Peckett. Hopefully this new chap understands the difference. I also agree with the view that Hornby's lack of profitability is due to certain underperforming ranges and poor business decisions over the last few years.  

[Dunsignalling]

‎ Oxford make money selling cheap and cheerful model cars and trucks etc that are shiny and colourful and at prices that means much of their range are impulse purchases ie £5. They also seem to flood the market with stock, presumably as they are so cheap to produce compared to a small wagon. ‎ ‎ I don't ever recall anyone rivet counting an Oxford 1:76 Mini or Fiesta.  Fine for plonking on a layout as scenery but not subject to anything like the scrutiny of roling stock ‎ ‎ As Oxford are finding (in the media at least) the 'almost good enough'‎ may not cut it in the current rail market. The concern is that Hornby don't adopt the same 'almost good enough' approach. This seems to be one of Oxford"s core competences, producing okish models at prices below competitors. The road vehicles range was exploiting a gap in the market for decent, relevant vehicle models, however Oxford Rail is competing in a well established market with both incumbents and aggressive new entrants. A very different ballgame. We don't know if the Rail division is profitable so don't know if this strategy is working. My fear is Oxford's MO is more Northern Nellie than Peckett. Hopefully this new chap understands the difference. I also agree with the view that Hornby's lack of profitability is due to certain underperforming ranges and poor business decisions over the last few years.  

The real market for detailed models for car enthusiasts isn't, never has been, and probably never will be in OO, though it's a different matter among PSV and commercial vehicle collectors.

 

The important scales for car fans are 1:43 and larger. OO and N are, in that category, primarily adjuncts to the model railway hobby.

 

Hornby' Railroad products (and quite a lot of their main range wagons) are "almost good enough" (or they were, 20 years ago) and that seems to work so it's just a case of getting everything redistributed sensibly under whatever brands are eventually settled on. My own guesses have been set out in my earlier post.

 

John

Edited October 5, 2017 by Dunsignalling

[Coryton]

 

 One way of splitting everything and providing better differentiation in the marketplace might be to keep Hornby for the premium models and rebrand Railroad under the Oxford Rail banner.

 

 

Only if Hornby feel that the "trainset" market is completely dead and the fact that they have the only UK model railway brand widely known outside the hobby has become completely worthless to them.

 

Would Hamleys and ASDA stock "Oxford Rail" train sets, I wonder?

[jjb1970]

The air-con Mk.2 model was not Hornby’s best effort but it dates back to their troubled design clever period when they were struggling to make anything, their Collet and rebuilt LSWR coaches introduced since that period are superb (as were models like the Maunsell and Stanier coaches which pre-date it). Similarly with locomotives, yes some of the efforts to produce models which could be released as both railroad and main range models were less than successful in the main range (although in fairness, they are excellent, affordable railroad models) but models like the Peckett and air smoothed MN show that they’re back on top form and producing models as good as anything being offered to the OO market. You can’t compare a company that has dropped a few klangers but has also got it quite spectacularly right on many of their releases with a company that seems to have adopted a “good enough” level of detail which sits somewhere between railroad and Hornby/Bachmann/Rapido etc. Well, you can compare them, to say that Hornby is producing models of a noticeably higher standard and working to a higher level of fidelity to prototype and accuracy.

That said, I do think there is a space for more affordable models and that Oxford may have actually found quite a nice spot in terms of cost/detail as for many modellers I think they are indeed “good enough” and they are undoubtedly keenly priced. I see them as sitting quite close to the new generation railroad tooling (e.g. Hall, P2, Tornado) which is no bad thing. One possible way forward might be to move the Hornby brand firmly upmarket to compete at the top end of the market (I’ll refrain from using the term “museum quality model”…..) at the same time as moving Railroad firmly down market to sit in the residual toy/trainset segment using the old pre-China tooling and with the Oxford brand sitting in the middle offering good models at keen prices using the new generation railroad and Oxford tooling and perhaps some of the higher end Hornby tooling that might be a bit jaded to sit in a top end range.

[Dunsignalling]

Only if Hornby feel that the "trainset" market is completely dead and the fact that they have the only UK model railway brand widely known outside the hobby has become completely worthless to them.

 

Would Hamleys and ASDA stock "Oxford Rail" train sets, I wonder?

I haven't looked at the 0-4-0 racer sets of late, but do Hornby actually use the Railroad brand for sets?

 

EDIT; I've just looked on their website and they all seem to be branded just as "Hornby".

 

John

Edited October 5, 2017 by Dunsignalling

[Coryton]

I haven't looked at the 0-4-0 racer sets of late, but do Hornby actually use the Railroad brand for sets?

 

EDIT; I've just looked on their website and they all seem to be branded just as "Hornby".

 

John

 

True. But the 'add-on' rolling stock of similar quality is generally Railroad branded.

 

If the Hornby brand was for top-end models and Oxford Rail for the lower "train-set" quality models, it would seem somewhat perverse to include train sets in the Hornby brand.

 

They then have to explain that when someone wants to look to expand their train set, they shouldn't be put off by the high prices for Hornby models - they need to look for Oxford Rail models instead.

 

Doesn't make any sense to me (for whatever that is worth).

[unravelled]

I'm way out of my depth in this thread, but have one thought about any future marketing of names/brands. Hornby is historically a toy manufacturer, and nothing wrong with that. But with all the connotations that "Oxford" brings internationally, I could see that sitting well as a collectors bramd.

 

 

Dave