Preorder email

[Trains4U]

3 hours ago, scumcat said:

Does this then mean the only place to buy Hattons products is from Hattons?

Once the wholesale customer retailers sell out of their current stocks, yes.

(I still have a reasonable stock of snowploughs, tank engines and RHTTs)

Edited April 25, 2021 by Trains4U

[ruggedpeak]

So in amongst the cover of Hornby pre-order issues are Hattons trying to rehabilitate themselves with Bachmann (and perhaps other manufacturers who might have given the a friendly warning not to make the same mistake)? Who knows but all good speculation!

[CUCKOO LINE]

21 hours ago, The Stationmaster said:

It is the usual time of year for the issue of a trading statement by Hornby to its shareholders and it has to comply with the relevant Regulations in respect of such information.  It was folowed by an increase in the share price of a bit over 10% but there have been no t reportable share trades by individuals since the statement.

Hornby issued a trading statement on 13th April see Hornby forum posting

Edited April 26, 2021 by CUCKOO LINE

[The Stationmaster]

1 hour ago, CUCKOO LINE said:

Hornby issued a trading statement on 13th April see Hornby forum posting

As I said in my post yesterday - which quoted parts of that statement including the date on which it was issued through RNS.

[ruggedpeak]

1 hour ago, The Stationmaster said:

As I said in my post yesterday - which quoted parts of that statement including the date on which it was issued through RNS.

On 25/04/2021 at 10:58, ruggedpeak said:

https://polaris.brighterir.com/public/Hornby/news/rns/story/xzmlj3w

 

 

 

[stephennicholson]

5 hours ago, ruggedpeak said:

So in amongst the cover of Hornby pre-order issues are Hattons trying to rehabilitate themselves with Bachmann (and perhaps other manufacturers who might have given the a friendly warning not to make the same mistake)? Who knows but all good speculation!

 Speculating further and at the risk of straying further off topic, if fences are mended with Bachmann, might we then see Hatton's products reappear in the EFE range?

[adb968008]

On 25/04/2021 at 12:02, Trains4U said:

 

Hattons ceased their wholesale operation in January.

 

my stocks of Hattons products are dwindling and will not be replaced  (which is sad as the little tank engines sell particularly well)

Shame.

 

looking at the bigger picture...

 

no new tooling announced recently

crane put on hold

no new reliveries on recent toolings

66 / barclays / P on discount (and not wholesale)

It feels to me like the end of this tooling adventure.

 

I did notice in Hattons accounts some very large research and development tax credit. When I read up on the requirements for it, basically ..new industry innovations, considering the size of those credits, I did wonder if their recent suite of toolings were behind it... they recieved credits of £200k in 2019, and another £60k in 2020... thats a lot of investment they spent somewhere.

 

That said their accounts shows a drop in sales, but their profit margin increased.. whatever they were doing, they were much more efficient at it... if thats down to becoming a manufacturer/retailer i’d hope they continue.

 

 

Edited April 26, 2021 by adb968008

[Nile]

15 hours ago, adb968008 said:

It feels to me like the end of this tooling adventure.

Work continues on their Genesis coaches, due out later this year.

[The Stationmaster]

16 hours ago, adb968008 said:

Shame.

 

looking at the bigger picture...

 

no new tooling announced recently

crane put on hold

no new reliveries on recent toolings

66 / barclays / P on discount (and not wholesale)

It feels to me like the end of this tooling adventure.

 

I did notice in Hattons accounts some very large research and development tax credit. When I read up on the requirements for it, basically ..new industry innovations, considering the size of those credits, I did wonder if their recent suite of toolings were behind it... they recieved credits of £200k in 2019, and another £60k in 2020... thats a lot of investment they spent somewhere.

 

That said their accounts shows a drop in sales, but their profit margin increased.. whatever they were doing, they were much more efficient at it... if thats down to becoming a manufacturer/retailer i’d hope they continue.

 

 

The change in profit margin is probably a result of not discounting prices as deeply as they have in the past.  Hattons modus operandi at one time was based on 'pile it very high and sell it cheap' with margins on individual locos being measured in a few £s.  That model really ended when trade discounts were slashed by Hornby and with originally Bachmann and ay ter Hornby restricting retailers' initial level of discounting from RRP the old sales model was no longer possible.  hence margin per item would increase irrespective of number of sales.

 

The R&D tax credits don't surprise me as judging solely from their product range in Hattons originals they have clearly spent a lot of money over several years on product development that we can see and probably on innovation that we can't immediately see and they had, the last time I came across them, at least two people working full time on that sort of thing.

[Legend]

17 hours ago, adb968008 said:

 

 

That said their accounts shows a drop in sales, but their profit margin increased.. whatever they were doing, they were much more efficient at it... if thats down to becoming a manufacturer/retailer i’d hope they continue.

 

 

Couldn’t  that just be the loss of Bachmann sales where they made limited margin as retailer , but had volume, to be replaced by their in house production , P Class , Andrew Barclays ,66s amongst others where they make much bigger margin ( as they get manufacturers and retailers margins) but possibly less sales . So smaller overall sales but higher margin per unit . 
 

Its an interesting time . Can’t help feeling there are some reappraisals going on across the model railway market at the moment .  But if Hornby are restricting new releases to “box shifters” and instead selling direct , wouldn’t it make sense for these box shifters to manufacture their own ranges . You could argue it was Hornby starvation of new products when they struggled to get manufacturing capacity , that drove the likes of Hattons and Rails to create their own models to have something to sell . Frank Martin and his failure to protect Hornbys manufacturing capacity has a lot to answer for . All eggs in the Sanda Kan basket. . If you look at Rails they have quite a lot of own commissions coming through .  Expansion into pre owned and US Continental markets possibly the other ways to go . 

Edited April 27, 2021 by Legend

[adb968008]

28 minutes ago, Legend said:

 Expansion into pre owned and US Continental markets possibly the other ways to go . 

I wish someone was, post Brexit, buying from Germany has become a bit of an expensive gamble. UK retailers of HO are not very competitive, indeed they seem to have increased prices post Brexit too.

 

 

[The Stationmaster]

45 minutes ago, Legend said:

Couldn’t  that just be the loss of Bachmann sales where they made limited margin as retailer , but had volume, to be replaced by their in house production , P Class , Andrew Barclays ,66s amongst others where they make much bigger margin ( as they get manufacturers and retailers margins) but possibly less sales . So smaller overall sales but higher margin per unit . 
 

Its an interesting time . Can’t help feeling there are some reappraisals going on across the model railway market at the moment .  But if Hornby are restricting new releases to “box shifters” and instead selling direct , wouldn’t it make sense for these box shifters to manufacture their own ranges . You could argue it was Hornby starvation of new products when they struggled to get manufacturing capacity , that drove the likes of Hattons and Rails to create their own models to have something to sell . Frank Martin and his failure to protect Hornbys manufacturing capacity has a lot to answer for . All eggs in the Sanda Kan basket. . If you look at Rails they have quite a lot of own commissions coming through .  Expansion into pre owned and US Continental markets possibly the other ways to go . 

Although it has been mentioned elsewhere I understand that it is not just 'box shifters' (whoever they actually are nowadays?) who have had their allocations  of certain models cut -  and when I say 'cut' I don't mean rationed but completely cancelled.  it has also been hinted that Hornby's retailer payment terms have been further altered and tightened although I haven't heard that direct from any retailer that I know.

 

Hornby's PNC loan of £12million ends in just over a year from now.  While it isn't clear (possibly in the Annual Report?) how much of it has been been used it still costs 0.75% of any unused funds in addition to interest on the money actually used.  Unless that loan is extended it would presumably have to be repaid next year so it would obviously make sense to build up reserves to meet that requirement as PNC comes over from some of its past acquisitions as the sort of concern that doesn't mess about when loans are due for repayment.  And I can't see Phoenix willingly losing out on its investment in Hornby.   So if Hornby can build on its lockdown sales growth, especially at greater immediate profit to itself, it seems to make sense for them to do so.

[Joseph_Pestell]

It would be informative to see Hornby's "terms and conditions" for retailers.

 

At a time when the EU threatens Astra Zeneca for not delivering as many Covid jabs as were ordered, how is this situation different?

 

A contract has been made between Hornby and these retailers to supply goods. There may, quite sensibly, be some clause in the T&C which covers Hornby in case of genuine difficulties. But if they are not treating the retailers equally.... I can see lawyers getting a packet out of this.

 

I could also envisage a group of the major retailers getting together to produce their own models and kick Hornby and Bachmann into the long grass.

[Roy Langridge]

12 minutes ago, Joseph_Pestell said:

At a time when the EU threatens Astra Zeneca for not delivering as many Covid jabs as were ordered, how is this situation different?

 

 

Don't confuse real law with what the EU are trying to pull. In releasing the contract with AZ (in breach of the contract) the EU demonstrated that AZ were correct in saying it was best endevours.

 

EU contracts have a "whereas" section that puts it in context, it contains "WHEREAS, as part of that scale-up, AstraZeneca has committed to use its Best Reasonable Efforts* (as defined below) to build capacity to manufacture 300 million Doses of the Vaccine, at no profit and no loss to AstraZeneca"

 

*Best Reasonable Efforts is defined as "in the case of AstraZeneca, the activities and degree of effort that a company of similar size with a similarly-sized infrastructure and similar resources as AstraZeneca would undertake or use in the development and manufacture of a Vaccine at the relevant stage of development or commercialization having regard to the urgent need for a Vaccine to end a global pandemic which is resulting in serious public health issues, restrictions on personal freedoms and economic impact, across the world but taking into account efficacy and safety"

 

Further almost all agreements within the contract use the term "Best Reasonable Efforts", 15 places in fact. Add to that there are only estimated dates and quantities...

 

The court case is the EU and Member State governments trying to play hardball, but they have not got a leg to stand on. Have a read of the contract it is quite illuminating, especially with what the EU did not stipulate.

 

Roy

[The Stationmaster]

4 minutes ago, Joseph_Pestell said:

It would be informative to see Hornby's "terms and conditions" for retailers.

 

At a time when the EU threatens Astra Zeneca for not delivering as many Covid jabs as were ordered, how is this situation different?

 

A contract has been made between Hornby and these retailers to supply goods. There may, quite sensibly, be some clause in the T&C which covers Hornby in case of genuine difficulties. But if they are not treating the retailers equally.... I can see lawyers getting a packet out of this.

 

I could also envisage a group of the major retailers getting together to produce their own models and kick Hornby and Bachmann into the long grass.

The final sentence is very much what is already starting to happen I think - and has in fact happened for some time.  Assuming what we - as end customers spend - remains relatively constant (adjusted for inflation) then the more manufacturers etc taking their slice out of the the smaller will become the average slice.  and that means the slice left for the big boys could also become less.  if the big boys of this world, such as Hornby with, still, a pretty large overhead cost, suffer a drop in market share because we spend our money elsewhere then they either have to fight back in order to retain share or they gradually shrink.  

 

If we do still have a relatively local retailer and he is denied, or faces severely rationed, product we aren't very likely to blame him especially if we know him well over years as a customer.  And in many cases unless we are desperate we won't go elsewhere so it equals a lost sale and - more importantly - lost interest for the future because we now distrust the manufacturer (especially if they still have the thing we lost for sale direct, as happened previously with Hornby). 

 

Hornby have the massive advantage of a name which still spells 'toy train' or 'model railway' to the more general market but unless they sell the right things in the right way to the more committed/enthusiast market they risk losing a share of the overall market.   Difficult to imagine model railways without them of course but they have to innovate, and deliver, in order to survive in our particular market area.  And part of that survival in my opinion (others may vary of course) is that they need to respect and serve the remaining model shop market because that is where customers can usually get any problems sorted and encourage follow-on purchases.

 

Many younger people are happy to buy online but the grey haired market buying presents for grandchildren and nephews or nieces don't always think that way and like to talk things through in a shop with someone who understands what they are selling.  The grey haired are another area of the market = sales = money coming in  which can easily be lost if they don't have a friendly, informative, face to talk to across a shop counter (although maybe that area is declining anyway?)

[MikeParkin65]

1 hour ago, Joseph_Pestell said:

It would be informative to see Hornby's "terms and conditions" for retailers.

 

At a time when the EU threatens Astra Zeneca for not delivering as many Covid jabs as were ordered, how is this situation different?

 

 

Life saving vaccine for global pandemic needing distribution before the virus gets chance to mutate versus not getting a model train from a particular vendor. Mmmm, thats a tough one...........

[Joseph_Pestell]

6 minutes ago, MikeParkin65 said:

Life saving vaccine for global pandemic needing distribution before the virus gets chance to mutate versus not getting a model train from a particular vendor. Mmmm, thats a tough one...........

 

In purely legal / contractual terms, it's a valid comparison.

 

Nor did I mention a private individual getting his/her model from a retailer.

 

The issue here is that Hornby is (on the face of it) not respecting its commitment to the retailers. And that, to them, is a matter of survival and jobs. I've got that t-shirt.

[MikeParkin65]

6 minutes ago, Joseph_Pestell said:

 

In purely legal / contractual terms, it's a valid comparison.

 

Nor did I mention a private individual getting his/her model from a retailer.

 

The issue here is that Hornby is (on the face of it) not respecting its commitment to the retailers. And that, to them, is a matter of survival and jobs. I've got that t-shirt.

Purely on technical grounds it isnt a valid comparison as we haven't seen any of the contracts or agreements between Hornby and the retailers. Likewise preorders aren't binding commitments of the retailers to supply the potential customer.  99% of this entire thread is guesswork and supposition borne of disappointment of not getting a model train. It doesnt really stand any comparison with real life and death in these awful times.  

[Joseph_Pestell]

12 minutes ago, jonnyuk said:

Back on topic, Hornby having allot of external pressures on them from new manufactures and also paying back the loan. That makes for difficult decisions to be made when it comes to a selling model, they may well be looking at Hattons and Accurascale who priorities direct selling and commission and thinking if they can do it, so can we.

 

If Hornby want to go down that road in the future, they should be allowed to.

 

That is rather different to cancelling existing orders, especially if they do not cut the orders in a fair way.

[jonnyuk]

3 minutes ago, Joseph_Pestell said:

 

If Hornby want to go down that road in the future, they should be allowed to.

 

That is rather different to cancelling existing orders, especially if they do not cut the orders in a fair way.

good point, comes back to communication or lack off, maybe they don't feel the need to communicate to the public. We on this forum are only a small part of the buying public. However Hornby should be communicating allot better with retailers, explaining them selves, are they doing this or just reducing quantities?

[Roy Langridge]

21 minutes ago, MikeParkin65 said:

99% of this entire thread is guesswork and supposition borne of disappointment of not getting a model train.

 

Only 99%? I find it amazing how many people can work out what is going on without the knowledge needed.

Roy

[Michael Hodgson]

2 hours ago, Joseph_Pestell said:

 

In purely legal / contractual terms, it's a valid comparison.

 

..except that the EU and the member states own the law courts and Hornby are just another relatively small PLC.

 

EU vs AZ is comparable to Post Office vs sub-postmasters.  The little guy might well go out of business before he gets anywhere against the system even  if he is in the right.  And as usual it's the lawyers who will win.

[Robin Brasher]

Following this interesting discussion about whether Hornby is honouring its commitment to retailers I am finding it better to deal with my local model shop.  For example I ordered some Coronation coaches from the Swanage station shop and some other Coronation coaches and some LSWR four wheel coaches from another retailer with a large mail order business ( not Hattons or Rails).  Last week the manager of the Swanage station shop sent me an email to say my Coronation coaches were ready and I walked down and collected them with the same 10% discount I would get from the other shop.  On the same day I received a message from the shop with a large mail order business telling me that it had cashed my credit card for the LSWR coaches. No sign of the LSWR coaches a week later so I rang the shop.  It was clear from their web site that the LSWR coaches had not arrived so I asked them why they had cashed my credit card and they said that the arrival was imminent.  I was not expecting to pay postage as the order was for over £200 but they have charged me £4 postage for the LBSCR coaches that arrived earlier and another £4 for the LSWR coaches.  Also there is no sign of the rest of the Coronation coaches that I ordered from them.

[Legend]

2 hours ago, Roy Langridge said:

 

Only 99%? I find it amazing how many people can work out what is going on without the knowledge needed.

Roy

But you never get the knowledge , because no one with any influence asks any questions . In the vacuum people are left to form own conclusions .

 

What do we know?

Hornby have been cancelling preorders to retailers . We know this from Hattons emails , direct confirmation from Durham Trains of Stanley and Trains4U . Hornby still have these models for sale directly from them.  Conclusion? Hornby want you to order direct , cut out the middleman and secure margin for themselves . 
 

Why does this matter ? Well it’s not critical in the scheme of COVID , Astra Zeneca and EU .  But it does affect retailers  it may result in less model shops . Hornby management (the current ones) make a lot out of supporting their retail base . Actions don’t seem to match 

Edited April 27, 2021 by Legend

[Black 5 Bear]

9 minutes ago, Robin Brasher said:

Following this interesting discussion about whether Hornby is honouring its commitment to retailers I am finding it better to deal with my local model shop.  For example I ordered some Coronation coaches from the Swanage station shop and some other Coronation coaches and some LSWR four wheel coaches from another retailer with a large mail order business ( not Hattons or Rails).  Last week the manager of the Swanage station shop sent me an email to say my Coronation coaches were ready and I walked down and collected them with the same 10% discount I would get from the other shop.  On the same day I received a message from the shop with a large mail order business telling me that it had cashed my credit card for the LSWR coaches. No sign of the LSWR coaches a week later so I rang the shop.  It was clear from their web site that the LSWR coaches had not arrived so I asked them why they had cashed my credit card and they said that the arrival was imminent.  I was not expecting to pay postage as the order was for over £200 but they have charged me £4 postage for the LBSCR coaches that arrived earlier and another £4 for the LSWR coaches.  Also there is no sign of the rest of the Coronation coaches that I ordered from them.

At least you know which retailer not to pre-order with in future Robin.

Local shops/small concerns, who very often offer the same discounts nowadays always get my vote and cash