Hornby APPOINTS NEW CEO

[Dunsignalling]

Are there any official figures that say old railway modelers are dying off faster than new entrants are coming in. I mean, when we kick the bucket, do our relatives have to tick a box which denotes we are no longer extant, have been withdrawn and scrapped, so that someone in Whitehall or Hornby can cross our name from the model railway enthusiast census. Or is there a little cookie at work on RMweb.... 

Pure observation, combined with an intuition that the peak development of interest in railways of the 1950s and 1960s led to a peak in those taking up or returning to model railways a few decades later. These are the guys who (IMHO) have fuelled the growth in demand for quality r-t-r since the turn of this century.

 

As a result, the population of the hobby is, at present, heavily skewed towards those born between approximately 1945 and 1955. NO statistics needed, just go a few shows and keep your eyes open. I'm 65 and sometimes attend just to help me feel young!

 

A normal consequence of any mass expansion is a corresponding mass exodus as those recruits depart. We (but possibly not I) may see another growth spurt 20 to 30 years hence as the "Thomas" generation enters the 40-something returnee demographic, but it seems highly probable that there will be something of a trough before that happens.

 

 

John

Edited October 12, 2017 by Dunsignalling

[Dunsignalling]

The fact that the "Mass Market" does not exist is down to changes in lifestyle etc, and other hobbies coming and going in the UK, but it is not helped by Hornby, and others not selling the hobby to the market. 

 

If it does not exist as a market, they have to create it, business does not come on a plate, you have to put effort in. Frank Hornby did not sit there and await customers knocking on his door for Trains and Meccano, he got the product going and created the market himself, it is known as salesmanship, sadly lacking in companies these days.

 

As said it is a new generation thats here now, and it has to be shown that train models are fun, and lead to better modelling later on. Rev Awdry helped no end with keeping the model train and toy sector going, but this will not last forever.

 

What is fatal is making limited runs and leaving demand unsatisfied, in sales it is a disaster to loose a single sale to a customer, you cannot afford to loose even one, it affects the shops and the makers. Better planning and sales technique is needed especially from Hornby reps, who, and I was there when it happened, would not reduce an order to what the shop could afford, and instead simply sold nothing!

A Barrow boy selling produce could do better than that..........he talked his way out of a sale......

Commercially speaking, today's trading environment dictates that it's better to make a hundred fewer than you can sell quickly than a thousand more than you might sell eventually.

 

John

[APOLLO]

Regarding China, I do not disagree or doubt anything you've said there.

A theoretically communist dictatorship, plagued by corruption, overseeing a rampant capitalist and increasingly consumer economy.

With the impending seismic shifts in global geopolitics, it's looking increasingly likely that within the next 15 to 20 years, China will not only be the world's most powerful economy, but will also be the largest and most dominant military power.

Who knows what the global economic map will look like by then?

Model trains ??????

 

.

 

China has HUGE future problems looming in the next decade or so (along with many other countries). Internal politics will be well down the list of their problems.

 

Water - particularly clean drinking water. Himalaya snow melt feeding the major rivers is slowing down. Ground water is over pumped and drying up.

 

Polution - The above rivers are heavily polluted by uncaring unregulated rapidly expanding industry. Serious land and air problems are escalating also.

 

Population - 1.4 Billion and rising

 

Food - China is not self sufficient - import lots of food (Rice from Thailand & SE Asia etc).

 

Energy - There is a lot of coal, but little oil or natural gas - hence the offshore arguments re the Spratley islands etc. China imports natural gas from Burma, and increasingly Russia.

 

Raw materials - Iron Ore etc - China relies on imports from Australia. They are OK for rare earths though.

 

Climate change - a bit of an unknown, but it won't be favourable, especially if China's food growing countries are affected.

 

Of the above food & drinking water are of most concern.

 

Brit15

Edited October 12, 2017 by APOLLO

[Revolution Mike]

What is fatal is making limited runs and leaving demand unsatisfied

 

What is even more fatal (???) is overproducing, stock sitting on manufacturers or retailers shelves for too long and struggling with cashflow.  The vast majority of hobby items are batch produced including those things with much greater mass appeal and sales than toy trains.  Some of the manufacturers actually use the scarcity of product to their advantage eg limited editions. There isn't one simple rule to all of this - of course no one wants to leave sales behind but you also have to balance the financial risk vs reward of losing some sales.  For example we retail almost largely over the internet and a much smaller proportion by post.  We can't retail over the phone as we don't have the time to do so (it isn't our FT job) nor could we afford to employ someone to do so at the moment without increasing our prices.  Even the orders by post take significantly longer to process than our web sales for much less volume of orders.  So we are already having to balance sales vs cost of sales (time and money) as do most businesses.

[Widnes Model Centre]

We may be bucking the trend.

We do have lots of young modellers and railway modellers that buy from the shop. As a marketing exercise I asked the youngest if he had seen the Hornby Junior. He had but his evaluation wasn't good. Asked him why and he replied words to the effect of "it's a toy". He was rather more articulate than that with his explanation but I don't want to upset Hornby Marketing. Best guess at age would be 8 or 9.

[4630]

We may be bucking the trend.

We do have lots of young modellers and railway modellers that buy from the shop. As a marketing exercise I asked the youngest if he had seen the Hornby Junior. He had but his evaluation wasn't good. Asked him why and he replied words to the effect of "it's a toy". He was rather more articulate than that with his explanation but I don't want to upset Hornby Marketing. Best guess at age would be 8 or 9.

 

 

Sounds like a very astute young customer there.

 

It does beg the question what market research and product testing did Hornby do as they developed 'Hornby Junior'.  I note that the boxes are marked age 4+.

[Coryton]

Sounds like a very astute young customer there.

 

It does beg the question what market research and product testing did Hornby do as they developed 'Hornby Junior'.  I note that the boxes are marked age 4+.

 

As I have said before, I'm a big fan of the Marklin "My World" trains which are aimed at ages 3-6.

 

However that's not to say that older children can't enjoy them too - unlike a Hornby train set they are very happy on the floor (won't pick up fluff, and can survive being trodden on) and the track can be taken apart and put together almost limitlessly without damaging it.

 

I'm not sure the Hornby ones are as robust though they are more realistic looking. The My World trains don't have bogies - which makes them easier for young children to get on the track - and although more caricatures than models they do clearly represent real prototypes.

 

Putting aside the lack of expandability - that may come - the biggest disappointment to me is that the Hornby Junior train isn't remote controlled. There is a huge amount of added fun being able to start, stop, speed up, slow down, reverse, put the lights on and off, sound the horn etc, compared to one speed, one direction with a button on the roof.

 

Maybe they should have made it so that it runs for a pre-determined time depending on how long the button is pressed in then people could re-create the fun of winding up the clockwork just the right amount to stop at the next station.

[adb968008]

I always find it amazing that by reading a few newspapers people can always come to the conclusion that country x or y is doomed to fail, yet the problem with these prophecy’s is the end date is always being extended, usually inline with falling sales and a need to address it, or by politicians pointing elsewhere to offset our own bad news.

 

It’s easy to say the end of someone else’s world is coming, but rarely look at their own , let alone be brave enough to say the end of someones world isn’t imminent after all.

 

Just because someone’s culture doesn’t match our own doesn’t mean it’s doomed to fail, different cultures survive because they adapt to their local conditions, not to our conditions.

 

I just flew to Dublin today (actually to the railway works on business) just for the day and picked up the UK paper out bound, and the local Irish paper on the return.. same story, same hysteria two opposite angles.. both sides selling papers with stories panicking the populace about borders, brexit and the perils of no deal.. each paper blaming the other party and saying their own politicians need to react to it.

 

Bottom line.. same rubbish, different paper, same hysteria, different country, it’s almost as if the same media org wrote both stories and simply did a find/replace swap...it’s not as if the media would possibly do that.. would they, really, nah...., next thing we might even suggest media hype actually creates stories by provoking extreme reactions, and causes some of the events that occur..all in the name of selling papers.

Edited October 12, 2017 by adb968008

[adb968008]

Hmm

 

I doubt we’ll see manufacturing will ever return from China, indeed quite the opposite.

 

Chinese businesses love a bargain, especially floundering companies with strong names sold in fire sales.

 

What we might see, is the prices rising to a point where some manufacturers fail.then the Chinese factories buy the toolings for a song, and start out reproducing the older models at Chinese cost prices.

 

A £160 Loco could feasibly turn up by an unknown Chinese manufacturer with a new website sold for £50 including delivery they make margin, we get cheap, no middle men, no catalogs, limited marketing, use of ebay etc. No nostalgia.

 

What we won’t see is innovation, no new tools, no new models, and possibly increments errors due to knowledge gap creeping in (wrong numbers/names perhaps).. but we will get cheap.

 

It’s happening already at the smaller end.. there any number of Chinese businesses on ebay selling generic railway signals, lights, scenery, model cars, stations etc, much of it costs peanuts and is very acceptable. We just saw the Atlas HO gauge BR class 81 appear in Hong Kong..

 

Why buy 6 Preiser figures for £12 when you can buy 100 painted figures for £1.50 inc pp on ebay ?

Electronics has gone this way already, so has oodles of other generic unbranded household goods, Rover did too..

Edited October 13, 2017 by adb968008

[Roy Langridge]

What is fatal is making limited runs and leaving demand unsatisfied, in sales it is a disaster to loose a single sale to a customer, you cannot afford to loose even one, it affects the shops and the makers. Better planning and sales technique is needed especially from Hornby reps, who, and I was there when it happened, would not reduce an order to what the shop could afford, and instead simply sold nothing!

A Barrow boy selling produce could do better than that..........he talked his way out of a sale......

Sorry but that is an old fashioned view of marketing and flies in the face of the laws or supply and demand. If supply does not exceed demand, premium prices may be applied and stock fully sold. Catering for every possible sale probably means actually oversupply, discounted pricing and annoying customers who paid full price. Get it right and the former will maximise profits and keep a generally happy customer base. The latter can lead to wide discontent with customers. Remember, you can never please everybody.

 

Your barrow boy would be selling off whatever was left at the end of the day at a discount. Exactly what everybody argued Hornby should not do when they did exactly that. Thankfully they learned their mistake.

 

So, in summary, your barrow boy is not so smart.

 

Roy

[adb968008]

Better planning and sales technique is needed especially from Hornby reps, who, and I was there when it happened, would not reduce an order to what the shop could afford, and instead simply sold nothing!

 

No deal is better than a bad deal...

 

I’m sure I’ve heard that line somewhere before ?

[Willie Whizz]

The "barrow boy" analogy is often used,and is very valuable, but is not always properly understood.  It is supposed to be an illustration of the importance of a business understanding its own 'gross margin', 'break-even' and profitability.  But it works best as an analogy when the "product" is perishable, or at least has a limited shelf-life or there's some other pressing need to move stock quickly.

 

Consider the case of a "barrow boy" selling say flowers, or pork pies, or some-such product that, at the end of the day, any leftover stock will have to be discarded.

 

The experienced and competent "barrow boy" - whether by explicit calculation or more intuitively - will know exactly how much it cost him to secure his 'pitch' for the day; how much his stock cost to purchase and transport; and how much surplus folding money [= 'profit'] he needs to take home to satisfy 'Er Indoors' and (maybe, a bit) the Tax Man.  And so on ...  That totals up to £X.  Knowing his customer base, he will set his prices so as to aspire to have taken his £X from sales by, say, 3 pm on Saturday afternoon.  At that point he has choices:  [a] If he's sold virtually all his stock he can pack-up, bin the odd remnants and happily go home early.  If he has some left, but the sun is shining and passers-by are still readily buying, he can carry-on selling at full price and maximise his takings.  [c] If it's piddling-down with rain and people are passing-by with hoods up and heads bowed, he can start shouting about cut-prices and special offers - he will at least sell some more that way, which is better than persisting at full-price when clearly no-one is very interested.  The point is, for and [c] the competent "barrow-boy" who understands his own costing and pricing model (though he may not formally articulate it as such) has already broken-even, he has already covered all his costs - therefore whatever he makes after 3 pm is "pure profit", whether it's greater or lesser.

 

Which is an important and fundamental lesson of business that, perhaps surprisingly, some entrepreneurs take a very long time to learn, if indeed they ever do!  But if the stock has a longer shelf-life - and most model railway items do - it may not be quite that simple.  How long should a model railway manufacturer, or retail shop, keep stock on its shelves before deciding that it won't sell at that price?  How long before they accept that it may not even sell at any price?  Meanwhile they have had to pay-out to buy it from the factory or manufacturer; to store it on their premises with their attendant on-costs and staff wages; and maybe pay to their Bank for the funding to acquire the goods (and even the shop) in the first place.  At this level these are not simple calculations; they require a great deal of judgment and experience - which 'outsiders' to the industry - like us - are not always well-equipped to offer.

 

MORAL:  beware of anyone - businessman, pundit or politician, let alone 'enthusiast' on a Web page - who tells you that complex problems have simple solutions if only "they" would listen!

 

(And the foregoing is courtesy of Durham University Business School, so if you don't agree, blame them!).

Edited October 12, 2017 by Willie Whizz

[Fenman]

... What is fatal is making limited runs and leaving demand unsatisfied, in sales it is a disaster to loose a single sale to a customer, you cannot afford to loose even one ...

Do you think you're *ever* going to get over not being able to buy the Peckett you wanted? There does come a point where you just have to let things go...

 

Paul

[robmcg]

Do you think you're *ever* going to get over not being able to buy the Peckett you wanted? There does come a point where you just have to let things go...

 

Paul

 

or engage in the rather pleasant habit of looking in second-hand or new sites, Ebay and others, for that 'rare' model. It can take a lot of time and patience of course, but I enjoy it.

 

Some day I might even get a life! 

[Legend]

or engage in the rather pleasant habit of looking in second-hand or new sites, Ebay and others, for that 'rare' model. It can take a lot of time and patience of course, but I enjoy it.

 

Some day I might even get a life! 

It can be addictive!

[wombatofludham]

My experience of having done a handful of exhibitions as an exhibitor is that there are younger people out there modelling.  I've even met two teenage modellers whose primary interest is pre nationalisation steam which debunked one of my main assumptions.  I also met a significant number of new "empty nesters" who were interested in returning to railway modelling as an extension to their general railway interest, often with their wives who were encouraging them to the hobby.  As I designed "Kings Oak" to be a demonstration of what a newbie or newly returning modeller could achieve out of the box in a small space, I always tried to enquire of visitors what their interests were and tried to explain the layout ethos and how even if they were not interested in noisy computerised modern DMUs they could adapt it to other interests, so although it was an unscientific sample, it was sufficient to give me a feel that the doomsayers in the hobby might just be overcooking the potential decline. 

 

I'm also old enough to remember hearing that 10 years ago Train Simulation would kill off model railways, 20 years ago electronic toys would kill off model railways, 30 years ago home computers would kill off model railways, and as they say in Wales, "rydym yma o hyd".  There are still crowds of people congregating on Stafford station of all age groups watching trains go by and it is these people when they get older who will take up model railways, not necessarily today's youngsters.  After all, when I was younger I mainly played with Lego and model cars, yet now have plans for two model railways.

[coachmann]

There have been naysayers around since I can remember pronouncing doom and despondency about toy trains and railway modelling (they were distinctly separate in those days, unlike today). Television was supposed to be drawing people away from playing trains in the 1950's. Ten-pin bowling was cited as the new draw for everyone in the early 1960's and slot-car racing was replacing trainsets. 

 

The mass-producers of railway models have us all in their basket today and the hobby looks reasonably buoyant with a good many of us opening boxes instead of building things (me included). 0 gauge has entered a new phase that is looking distinctly attractive to a lot of people. Peco is investing in a bullhead track system for the future and Hornby is moving in the right direction with its choices and railway colours.

[adb968008]

In Hornby's last full accounts (to March 2016) Hornby Group paid out £5.31 million in wages & salaries and the payments to directors, including pension contributions, alone came to £1,374 million and the highest paid director was on £276,000 plus £53,000 pension contributions. If people are looking to save big money starting at the top is always a good bet.

Then who would negotiate with the banks, the shareholders and the other holders of Hornbys debts ?

Taking joe blow out of the warehouse and sending him to the AIM offices in London isn’t going to do the company much for confidence ? (Remember it used to be FTSE).

 

Corbynite communism might sound good, but in reality money talks to money. If you take money away, it leaves you penniless.

People might believe that you can strip wealthy of their cash and they will smile, reality if they will strip their own wealth and take it someplace else. It’s pretty simple really, as any fisherman will tell you, if you keep taking the big fish out of the sea, eventually the catch will get smaller and smaller. (Just as the pound goes Lower and lower...you see the connection here, Britain’s running out of financial fish food ?)

 

As directors salaries go, £273k isn’t that much and I doubt this is a pleasant job, little security, battering by the markets, creditors, customers and suppliers in what is a micro-industrythat few know much about, little chance of major change, influence or growth on an industry scale. How many management changes has Hornby had in the last few years ? This is pie eating division 4 football, not Chelsea.

 

I’ve never held shares in Hornby, no way, I know too much about the hobby to make me steer clear of it. It was amazing to see those highs in 2011, but I never believed it then either. The best outlook is stable at the current low but to me that’s optimistic, borderline fantasy, it’s got a valley to cross first and I don’t see a footpath yet which means more risk of a tumble, or a Rover style sell out before a complete fall and rebirth. I doubt it’ll be the end of the name, and the tools they will survive in a new entity. Sorry but that’s what I think and I’d estimate it within 3 years the new team might grasp the nettle now and you might see it in months but big change is coming.

Edited October 13, 2017 by adb968008

[RJS1977]

As someone from across the ditch, reading this fascinates me. I grew up with the notion of the Lima and Hornby brands as mainstays, and having Hornby points under the tree at Christmas was always a far better prospect than the Lima's. So the ingrained nature of the brand to those outside of the UK is a thing worth remembering.

 

Post Brexit, there'll not be a model shop in Europe stocking Hornby, Peco, Humbrol, Airfix, or any other UK similar manufacturer, as the import duties and tariffs won't make it feasible. (Hornby trainsets, track, scaledale is stocked in all the big box toy outfits in Ireland, and do well at Santa time, though we're a fraction of the UK market, I'd imagine)

 

The idea of purchasing a few whitemetal bits from the likes of dart castings will no longer be an option unless I go meet a shady character in an underground car park in Belfast, to sneak it across the border!

 

Brexit couldn't come at a worse time for the potential "phoenix rising" of Hornby, and the hobby in general..*

 

 R. 

 

*Hope I'm wrong...

 

The fall in the pound will more than offset any potential tariffs on exports - at least for UK-produced items.

[Dunsignalling]

My experience of having done a handful of exhibitions as an exhibitor is that there are younger people out there modelling.  I've even met two teenage modellers whose primary interest is pre nationalisation steam which debunked one of my main assumptions.  I also met a significant number of new "empty nesters" who were interested in returning to railway modelling as an extension to their general railway interest, often with their wives who were encouraging them to the hobby.  As I designed "Kings Oak" to be a demonstration of what a newbie or newly returning modeller could achieve out of the box in a small space, I always tried to enquire of visitors what their interests were and tried to explain the layout ethos and how even if they were not interested in noisy computerised modern DMUs they could adapt it to other interests, so although it was an unscientific sample, it was sufficient to give me a feel that the doomsayers in the hobby might just be overcooking the potential decline. 

 

I'm also old enough to remember hearing that 10 years ago Train Simulation would kill off model railways, 20 years ago electronic toys would kill off model railways, 30 years ago home computers would kill off model railways, and as they say in Wales, "rydym yma o hyd".  There are still crowds of people congregating on Stafford station of all age groups watching trains go by and it is these people when they get older who will take up model railways, not necessarily today's youngsters.  After all, when I was younger I mainly played with Lego and model cars, yet now have plans for two model railways.

Yes there are, but are there enough of them to balance out the mortality rate? My eyes tell me there aren't. We may not like to contemplate it, but the term "Baby Boom" inevitably comes with a less joyful corollary. 

 

The essential thing that affects the demographic of any activity is that a peak in 40-somethings taking it up will be followed by a corresponding, unavoidable, exodus three to five decades later. Nothing is going to "kill off" the model railway hobby but the number of participants is bound to wax and wane.

 

The current cornucopia of high-quality r-t-r provision is fuelled, not only by the aforementioned peak in recruitment, but also because those recruits are from the last generation to acquire decent occupational pensions across a broad spectrum of industries, and often to receive them early, too.

 

Even if enough new young incomers could be recruited to replace them, most of them will have to work for around a decade longer (and rising) than most of us oldies and relatively few will end up with as much disposable income once they finally do retire. 

 

Hay is being made whilst the sun shines, by both the manufacturers and we, their customers, but let's not fool ourselves that it is in any way "normal" or that things can stay as they are indefinitely. That doesn't pertain in any other walk of life; why should our hobby be any different?

 

John     

Edited October 13, 2017 by Dunsignalling

[BG John]

The current cornucopia of high-quality r-t-r provision is fuelled, not only by the aforementioned peak in recruitment, but also because those recruits are from the last generation to acquire decent occupational pensions across a broad spectrum of industries, and often to receive them early, too.

 

Even if enough new young incomers could be recruited to replace them, most of them will have to work for around a decade longer (and rising) than most of us oldies and relatively few will end up with as much disposable income once they finally do retire. 

 

Hay is being made whilst the sun shines, by both the manufacturers and we, their customers, but let's not fool ourselves that things can stay as they are indefinitely. That doesn't pertain in any other walk of life; why should our hobby be any different?

 

John     

I won't be living the life of luxury that my two 20+ years older brothers have lived in retirement. In my case it's more to do with life getting in the way, but I suspect a lot of people heading towards retirement won't be any better off, and many will be in a worse position. So it will have to be bashing old RTR for me, and scratchbuilding if I can master my Silhouette Portrait. Hopefully an acceptable and affordable (cheap!) 3D printer will be along in a few years to help. A machine that can be bought for the price of a couple of RTR locos seems a much better way to spend any available money to me.

 

With younger generations used to new technology, maybe the RTR buying side of the hobby will shrink as many of these people download designs and cut/print them themselves. And the collectors may not be able to afford to collect as much.

[The Stationmaster]

Mike - I have revisited those Hornby figures in the 2017 accounts (which also shows 2016 figures) and I cannot reconcile then with yours, particularly staff numbers (page 59) but also remunerations/costs. Maybe I am misreading some of it. Perhaps you could provide a link? Thanks.

 

Mike I got it from the 2016 information on the Companies House site - not sure if the link will work but there are now even bigger numbers in the 2017 report., page 23

 

https://beta.companieshouse.gov.uk/company/01547390/filing-history

 

If the link doesn't work here's a summary for year ended 31.3.17 - with even bigger numbers.   It;'s in the public arena already so presumably no problem with posting it here.

 

 

And yes - there do appear to be two different lots of employee numbers from different sources.

 

The year end figure at 31.3.17 was 60 in operations (+13 on 2016), 100 in sales/marketing/distribution (-39 on 2016, no doubt due to warehouse outsourcing), and 30 on admin (-14 on 2016).  N.B.The changes in numbers are all from the 2017 document.  The totals dropped from 230 to 190 and are for Hornby Group and not the company (where there was also a drop from 7 to 3). 

Edited October 13, 2017 by The Stationmaster

[Roy Langridge]

With younger generations used to new technology, maybe the RTR buying side of the hobby will shrink as many of these people download designs and cut/print them themselves. And the collectors may not be able to afford to collect as much.

 

And there you raise an interesting topic, one that I have often wondered about. What percentage of sales are actually to pure collectors? I have a feeling that the collector market is growing as the modelling side diminishes. It may be this which has led to the increase in special editions that we are seeing?

 

Personally I think we are nearly all collectors, even if we model (I certainly have far more locos than I can ever justify or use), however, even from reading this, a modelling forum, I sense there are a significant number of people who only collect.

Roy

[Clearwater]

THe staggering thing about Mike Stationmaster’s post is the bonus Cooke got in a year when the firm was still under water!

 

I appreciate the comments about relative pay to other industries but these are big figures compared to ebitda and another reason why the cost of maintaining a listing is the wrong strategy for Hornby. They act like a £5bn company not a £50m one...

[The Stationmaster]

Then who would negotiate with the banks, the shareholders and the other holders of Hornbys debts ?

Taking joe blow out of the warehouse and sending him to the AIM offices in London isn’t going to do the company much for confidence ? (Remember it used to be FTSE).

 

Corbynite communism might sound good, but in reality money talks to money. If you take money away, it leaves you penniless.

People might believe that you can strip wealthy of their cash and they will smile, reality if they will strip their own wealth and take it someplace else. It’s pretty simple really, as any fisherman will tell you, if you keep taking the big fish out of the sea, eventually the catch will get smaller and smaller. (Just as the pound goes Lower and lower...you see the connection here, Britain’s running out of financial fish food ?)

 

As directors salaries go, £273k isn’t that much and I doubt this is a pleasant job, little security, battering by the markets, creditors, customers and suppliers in what is a micro-industrythat few know much about, little chance of major change, influence or growth on an industry scale. How many management changes has Hornby had in the last few years ? This is pie eating division 4 football, not Chelsea.

 

I’ve never held shares in Hornby, no way, I know too much about the hobby to make me steer clear of it. It was amazing to see those highs in 2011, but I never believed it then either. The best outlook is stable at the current low but to me that’s optimistic, borderline fantasy, it’s got a valley to cross first and I don’t see a footpath yet which means more risk of a tumble, or a Rover style sell out before a complete fall and rebirth. I doubt it’ll be the end of the name, and the tools they will survive in a new entity. Sorry but that’s what I think and I’d estimate it within 3 years the new team might grasp the nettle now and you might see it in months but big change is coming.

 

Simple answer - look at Oxford's and LCD's numbers and they are doing all of that for much less (no director's salaries noted but numbers are there for distributions to shareholders which amounts to a similar sort of thing.

 

The Hornby problem has struck me for some time as a very simple one - it is basically in niche areas with most of its product ranges but its governance costs are out of all proportion to the way markets have changed in the UK.  similarly it is still seemingly staffed overall like a 'big company' whereas it should really be cutting its coat to suit the cloth.  It has its good spots - such as design and development (a small team) -but as some retailers will tell you it has its problem areas such as marketing and sales where there seems to be a gap between reality and and what its people know.  We have heard from retailers, including some on RMweb, that while some of Hornby's reps seem to be very proactive and get out there selling others appear to be totally inactive and retailers simply don't hear about 'special offers' and so on.  The selling side in respect of UK model railways, and by inference other ranges, does not appear to be consistent.   Equally Hornby's UK model railway marketing has its bright spots with recent 'hi-fi' releases seemingly being not only well received but selling out (from the warehouse) on their first run but at the same time Railroad still remains something of a tangle and other things show lack of thought.