Hornby model shop Tiers system

[89A]

On 25/05/2021 at 09:37, woodenhead said:

So there we have it, from the horses mouth:

Forgive me for asking but this implies there was some sort of rumour going on previously.

 

Is there a thread for that?

[Legend]

6 minutes ago, Phil Parker said:

 

I've been doing a little digging with Hornby and it seems that that John Lewis space and staff support was provided for free, in return for the layout.

 

JL sell a limited range of sets, but put the name in a prominent location, in addition to a huge amount of press and publicity.

 

 

From this article in the Scotsman.

 

 

That brings back memories . Must have been 1971 my Mum took me on a day trip to Edinburgh , by plane , a BEA Viscount from Glasgow, which is pretty neat when you think about it . She knew I loved planes you just about got the wheels up when they had to come down landing again in Edinburgh . It actually took longer getting from Turnhouse to Edinburgh .  Anyway in true Scottish summer fashion  the rain was belting  down , so as well as the Castle etc refuge was taken in the toy dept of Jenners which sadly 50 years later did not survive the pandemic.  Anyway there was a Gorgeous Maroon and Gold King George VI Coronation , it must just have been new on the layout in Jenners , happy days .

 

And I suppose thats why I'm so disappointed with Hornby . A company held in true affection , but now being run like this . Not the Tri-ang Hornby of Richard Lines days 

 

[Phil Parker]

9 minutes ago, Legend said:

A company held in true affection , but now being run like this . Not the Tri-ang Hornby of Richard Lines days

 

Remind me. What happened to the Tri-ang of those days?

[Oldddudders]

13 minutes ago, 89A said:

Forgive me for asking but this implies there was some sort of rumour going on previously.

 

Is there a thread for that?

It's a long story, but the first seeds of doubt about what is going on were sown here, which now runs to 48 sorry pages. 

 

[The Stationmaster]

11 hours ago, robmcg said:

I just opened this thread now and read the first couple of pages and saw a fair bit of Hornby management-bashing but zero thanks to Andy Y and Phil for obtaining this statement from Hornby,   so thankyou Andy and Phil and any others involved.

 

Some criticism appears oblivious to manufacturing and supply constraints during Covid.  But as I say I only read two pages, or about 40 posts....

 

 

Come on Rob - there are currently 17 'Thanks' ticks on the original post and I know that mine was there long before you posted this.  That makes 17 more than zero according to the way I learnt to count.

[andyman7]

26 minutes ago, Oldddudders said:

It's a long story, but the first seeds of doubt about what is going on were sown here, which now runs to 48 sorry pages. 

 

And although the issue and the reasons behind it have now been expounded over several threads and hundreds of post, the main theme of frustration emerging again and again is from customers of Hattons who have had their preorders cancelled, the issues with any other retailers being tiny in terms of posts and energy expended across these threads.
I only post this to try and attempt a sense of proportion when the claim is that the whole retail chain is under mortal threat. 

[Legend]

30 minutes ago, Phil Parker said:

 

Remind me. What happened to the Tri-ang of those days?

 

In 1971 it was Tri-ang Hornby because they took over Hornby Dublo in 1965 when the Meccano empire went bust .    When Lines Bros went bust , not directly due to the model trains division ,Dunbee Combex Marx took it over because the Railway part was profitable . Richard Lines stayed ,I believe . and Hornby Railways as it had then become went from strength to strength in the 70s , when again their parent co went bust .  Things only started going sour in the 80s with advent of electronic games and the first of several management strategies to get into toys . Pound Puppies etc  . Of course they still manufactured in these days instead of just commissioning now .  Its not the same company . The red box is about the only familiar thing . 

[Miss Prism]

What is the timetable for placing retailers into their tier? (Or has the process been completed already?)

 

[Trains4U]

Just now, Miss Prism said:

What is the timetable for placing retailers into their tier? (Or has the process been completed already?)

 

It has been done already

[phil-b259]

2 hours ago, adb968008 said:

One thought, but John Lewis..

 

Does that mean JL will be selling all accessories, providing spare parts support, repairs and advice to building a layout ?

Has JL put out job adverts for railway modelling skills ?

 

 

 

No, but thats not the point.

 

Railway modellers are not going to be heading off to John Lewes for their purchases - but on the other hand Aunt Jane needing a present for nephew Peter could well be tempted to pick up something while shopping at John Lewes for other stuff.

 

Is such a move going to replace the volume of trade previously done through Hattons? of course not - but I doubt that was ever the intention. I suspect its more about exploring the market and demographics that model shops simply cannot reach.

 

Also given this only a feature of a single John Lewes store - and one in a Capital City at that it could well be that either Hornby are being sensible and doing a trial to asses the potential before rolling it out further or alternatively that it has already been decided its not worth continuing with but the penalties for breaking the agreement mean it might as well continue for the time being.

 

Of course its also true that the Pandemic my have caused problems with the arrangement that were not foreseen when the concession was opened.

 

 

[Trains4U]

It is probably worth noting that Hornby handle enterprise level business separately from independent retail business 

Tesco, Lidl, Argos and John Lewis are not going to be tiered...  These are huge contracts. Hornby probably sell more flying Scotsman train sets to Argos than all sets of all descriptions to all the independent retailers combined.

 

And do you know what, I’m more than happy for that to continue.   If a chance purchase of a train set in a large multiple sparks an interest, then I can look forward to the potential lifetime of follow up sales.

 

I got my first train set from a supermarket (a French one at that!)

but it was my local model shops that benefited in the long term.

Edited May 26, 2021 by Trains4U

[Simon Lee]

 

A slight tangent if I may, not being in the UK means I dont always pick up the vibes.

 

How does this affect the relationship with other brands Airfx, Scalextrix, Corgi etc within the Hornby empire ? 

I still get Hattons weekly update, and yesterday's included new products from Corgi and Airfix. Does the fall out/war of words/willy waving  just apply to supply of Hornby products or the broader Hornby portfolio. 

 

To me a traditional model shop was always stocked a range of brands, could the situation arise whereby a shop could stock Airfix, Corgi, and Scalextrix but not Hornby railways if they did not meet the tier requirements. 

 

Does the tier system apply to all shops who sell Hornby group products such that pure kit retailers eg Hannants or Kingkit now have to sell model railways ?

 

Appreciate that our retailer members might not be able to answer this, if not maybe Mr York or Mr Parker could throw some light on the matter ?

[The Stationmaster]

4 hours ago, Dunsignalling said:

And that of Rails, even more so. I've only watched a virtual tour, but I'd think their show-room/store will compare extremely favourably with anything Hornby are likely to put into a John Lewis branch. 

 

Ooh, yet another penny has dropped...

 

John

 

 

Ah, but when Rails opened their new showroom most of the manufacturers, including some newcomers, were present - apart from anybody from Hornby.  So maybe they don't have much idea about the nature of the new Rails showroom?  (Not that it matters of course because in the event Rails walked away from Hornby and not vice versa and it doesn't seem to have done them any harm).

 

3 hours ago, Roddy Angus said:

 

Is Hornby not simply protecting the smaller local supplier by trying to limit the influence of the larger internet suppliers?  They would be able to tell from the size of orders received whether the majority of sales are likely to be on the internet or by footfall.  For example, if I was a model shop in Alligin (look it up, it's near Torridon) and ordered 100 APTs, I am sure that Hornby would know that I was going to sell them all on line and not to passing trade.  If because of low overheads, I was able to sell at a discount and offer free extras, such as storage and postage, then I would be taking sales away from other shops.  Would anyone, as a manufacturer, want to aid the destruction of their seller network by assisting a few retailers to dominate the market? 

(heavily snipped down to this single paragraph)

Regards

 

Roddy

That is an excellent point Roddy and one which I agree with in many ways having long condemned on here, and elsewhere, the deep discounters who for years distorted the model railway trade in Britain and created false impressions of price levels.  (But note that past action on both trade and retail discounts by Hornby has effectively stopped much of that so give them their due in that respect).

 

However if Hornby really do want to support local retailers why do they 'grade' somewhere like Widnes Model Centre in Tier 2?  That gives the impression of doing the complete opposite.  And it perhaps suggests further - undisclosed - motives in the Tier system which might possibly relate to volume?   Doing that is of course, absolutely rightly, a commercial decision for Hornby BUT it hardly counts as 'protecting the smaller supplier' or protecting our 'local' model shops (where we still have one). If it is part of a commercial decision then say so - and don't dress it up as something else.

 

Quite why Hornby have become so afraid of shops commissioning models, even to the extent of rushing their own hastily developed alternatives to market (e.g the Terrier) remains a mystery to me especially as a  Hornby person years ago (and I paraphrase)  dismissed retailer commissions as 'a flash in the pan that wouldn't last'.  Why run seemingly scared of a 'flash in the pan' while at the same time helping yourself to their marketing skills and copying what they are doing or taking advantage of a shop's new release to revive a particular market thus enabling you to re-run some of your own older models at a lower price point (which, incidentally I think was a good idea)? 

 

The overall market has a particular size and until lockdown it was probably shrinking but it received a huge boost - 20%+ in the cases i know about (including one retailer who sells by mail order but not online,  a good example there, during Lockdown 1.  Some of that has continued, to the benefit of all in the market but there are increasing numbers of companies sticking their fingers in the cake to grab a share of it and some of them are actively seeking retailers.  You won't compete with that sort of innovation and novelty unless you also innovate and produce something that will. sell and not clog your warehouse for years to come - in short you need really good market intelligence and the ability to see areas which you can tackle before others get there (but then don't milk those areas to death).  

 

Hornby has got, compared with others, huge funds to spend on development and ideally not waste on copying but to use those funds properly it has to decide which market areas offer the best return and then innovate and bring novelty to those areas. And those market areas might not be in hi-fi models which appeal to many of us.   Once again Hornby seems to have become hoist on the petard of its 'big bang' annual announcement and closely associated ordering system for why else would it be cancelling retailer orders long after they have been accepted?

[andyman7]

52 minutes ago, Legend said:

 

In 1971 it was Tri-ang Hornby because they took over Hornby Dublo in 1965 when the Meccano empire went bust .    When Lines Bros went bust , not directly due to the model trains division ,Dunbee Combex Marx took it over because the Railway part was profitable . Richard Lines stayed ,I believe . and Hornby Railways as it had then become went from strength to strength in the 70s , when again their parent co went bust .  Things only started going sour in the 80s with advent of electronic games and the first of several management strategies to get into toys . Pound Puppies etc  . Of course they still manufactured in these days instead of just commissioning now .  Its not the same company . The red box is about the only familiar thing . 

OK, if we are going to use this as collateral let's get the actual, published, recorded and evidences facts correct:

• Meccano was by 1964 loss-making and needing a way out. This was achieved by the Lines Brothers group (Triang) buying out its entire share capital. It never 'went bust'.
• The Model Railway ranges were officially amalgamated in 1965 as 'Triang-Hornby'. This in practice meant that almost all the Hornby Dublo tooling was dropped.
• Triang took several years to dispose of the excess warehouse stocks of Dublo goods. Hattons purchased a huge amount at a massive discount which it fed out to customers for the next two decades. The big concern was to avoid a massive stock dump that would have devastated the economics of the market
• Lines Brothers went into receivership in 1971, one of the main areas of its losses being in supporting numerous overseas plants and subsidiaries that consumed capital for little return. 
  
  What we can see here is that any halcyon rose-tinted view of either Meccano or Triang is misplaced. They were companies that had to survive in the cut and thrust of the real world and for various reasons failed to thrive.
  
  
   

[The Stationmaster]

3 hours ago, GeoS said:

If a shop is devoting significant space to Corgi and Scalextric, is it really what you want a model railway shop to be doing?

With respect that is a bit unfair.  I doubt if any High St shop could nowadays survive on model railway business alone - it has to sell a wider range of models and modelling items in order to stay alive.  We had a small retailer locally who sold Hornby items - with a pretty fair range of stock - but he majored on diecast vehicles including some ranges I'd never seen elsewhere and he had a mail order business for them which extended all over the world, in fact one of his biggest customers was a collector in Italy.  Although his business was ruined by a water leak from the flat above he suffered to some extent from Hornby's Year 2 syndrome and getting stock which stood little chance of being sold once I'd had the couple of items I wanted although he did have a local model railway customer who was his main Hornby buyer.

 

My 'local' model shop sells model railway items, including white metal kits and flexitrack from other than Peco, plus tools and modelling materials, a wide range of plastic kits, some diecast vehicles, books and magazines, does model railway repairs, always test locos etc in front of you before selling them and offers a mail order service but does not sell online. I am one of his regular customers who drives for an hour or so in order to reach his shop; I know another modeller who drives a similar distance from almost the opposite direction t get to the shop.  That shop deserves to be in Tier 1 and i hope it is but if Hornby haven't got much idea of what 'mail order' means he might be in Tier 2 - but that will have minimal effect on how much my son and I spend with him.  Incidentally being 'High Street' he does sell (Hornby) trainsets and at Christmas watching complete novices come into the shop and be guided by him probably does a heck of a lot more for Hornby's sale values than selling online, as does helping people build up their layouts in the post Christmas period.  But if it's Hornby's choice to put him in Tier 2 it could well be their loss.

[Ian Hargrave]

12 hours ago, robmcg said:

I just opened this thread now and read the first couple of pages and saw a fair bit of Hornby management-bashing but zero thanks to Andy Y and Phil for obtaining this statement from Hornby,   so thankyou Andy and Phil and any others involved.

 

Some criticism appears oblivious to manufacturing and supply constraints during Covid.  But as I say I only read two pages, or about 40 posts....

 

 

FYI I too posted my appreciation of the diplomatic mission to Sandwich and commented on the supply situation which I feel is the root cause of the current difficulties. To gloss it all over as pure management bashing Rob is naive in the extreme so may I suggest you proceed further an read a good number of posts which are perceptive and well observed .Very few IMHO are ill judged in tone and content.What you read may not be to your taste but please don’t bury your head in the proverbial sand.

 

[jonnyuk]

13 hours ago, Widnes Model Centre said:

 

Well, had chance to read all of this.

 

Despite what you might think, we are very much in Hornby’s camp.

 

Am l going to return all my items that l have treasured for so many years? No. If l wanted l certainly would, but as Binns Road has gone certainly not driving down to Margate. Family history of connections to Binns Road would have my mother and aunts turning in their graves. Thinking aloud, why was it the women in the family that worked there?

 

Communication from Hornby needs work. I suspect they know that. Openness, honesty and integrity are big in our business. We expect the same, no matter who we are dealing with, be it customers or suppliers. 

 

We would like to get to the bottom of the Tier System, metaphorically speaking. It seems to us a tad flawed. As a family run business we are all in agreement. 

 

This is last year or so has seen challenges that l suspect none of us could ever have envisaged. As a model shop, we have to be grateful that we are still in business. We have seen too many businesses go to the wall and the jobs that go with them. 

 

Calls to boycott Hornby? Why would anyone want to see the company that has fulfilled our childhood  dreams in various guises disappear? 

 

Tired now, still got work to do on a promotion. If l don’t get it right my wife Gill will have me in Tiers.

 

Final word, who saw their first model railway in a Department store? I did.

 

Fennicks in Leicester, bought my first steam loco, think it was a re-built MN or something of that size from there, also bought a 90 and 91 from Domino's in Leicester, massive toy shop with a whole basement dedicated to Hornby and Tamia, so i would agree getting into a well respected big brand department store like JL is a good thing

[37114]

The interesting thing for me in the announcement is the explicit calling out about retailers doing their own competing products as putting you in tier 3; you don't hear of Coke or Heinz not prioritising volume to sell to Tesco / Sainsbury's because they sell their own brand products. The reason behind this is the supplier has capacity to service both markets and they are focussed on top line sales and margin. 

 

The key underlying thing behind this is that Hornby have supply chain issues which means they can't meet market demand so have decided to instead protect margin by saying - I would rather sell 100 items to 10 retailers at higher margin than sell 100 items to 1 retailer at a lower margin which is understandable.... however if you can make 200 and supply both markets (assuming there is 200 units worth of demand) then everyone is a winner. 

 

One also has to look at why Rails and Hattons amongst others decided to commission their own models as it is a huge commercial risk to them and others have failed in this space. If Hornby (and Bachmann amongst others) had been on top of their game a few years ago, reinvesting in upgrading their products, ensuring the supply chain could meet demand, would those retailers really have gone it alone? It does feel that the problem is of Hornby's making and some of the phrasing of the announcement feels like it adds fuel to the fire rather than give hope for the future. I recall in the James May program a clip where Simon K is talking to the Hattons guy as he is leaving Margate and the guy from Hattons said something like " Thanks Simon, we both need to be better at communicating, lets make sure we talk more going forward" and Simon acknowledged this which gave hope for a more collaborative relationship going forward which sadly does not seem to have happened.  

[CUCKOO LINE]

46 minutes ago, The Stationmaster said:

Ah, but when Rails opened their new showroom most of the manufacturers, including some newcomers, were present - apart from anybody from Hornby.  So maybe they don't have much idea about the nature of the new Rails showroom?  (Not that it matters of course because in the event Rails walked away from Hornby and not vice versa and it doesn't seem to have done them any harm).

 

That is an excellent point Roddy and one which I agree with in many ways having long condemned on here, and elsewhere, the deep discounters who for years distorted the model railway trade in Britain and created false impressions of price levels.  (But note that past action on both trade and retail discounts by Hornby has effectively stopped much of that so give them their due in that respect).

 

However if Hornby really do want to support local retailers why do they 'grade' somewhere like Widnes Model Centre in Tier 2?  That gives the impression of doing the complete opposite.  And it perhaps suggests further - undisclosed - motives in the Tier system which might possibly relate to volume?   Doing that is of course, absolutely rightly, a commercial decision for Hornby BUT it hardly counts as 'protecting the smaller supplier' or protecting our 'local' model shops (where we still have one). If it is part of a commercial decision then say so - and don't dress it up as something else.

 

Quite why Hornby have become so afraid of shops commissioning models, even to the extent of rushing their own hastily developed alternatives to market (e.g the Terrier) remains a mystery to me especially as a  Hornby person years ago (and I paraphrase)  dismissed retailer commissions as 'a flash in the pan that wouldn't last'.  Why run seemingly scared of a 'flash in the pan' while at the same time helping yourself to their marketing skills and copying what they are doing or taking advantage of a shop's new release to revive a particular market thus enabling you to re-run some of your own older models at a lower price point (which, incidentally I think was a good idea)? 

 

The overall market has a particular size and until lockdown it was probably shrinking but it received a huge boost - 20%+ in the cases i know about (including one retailer who sells by mail order but not online,  a good example there, during Lockdown 1.  Some of that has continued, to the benefit of all in the market but there are increasing numbers of companies sticking their fingers in the cake to grab a share of it and some of them are actively seeking retailers.  You won't compete with that sort of innovation and novelty unless you also innovate and produce something that will. sell and not clog your warehouse for years to come - in short you need really good market intelligence and the ability to see areas which you can tackle before others get there (but then don't milk those areas to death).  

 

Hornby has got, compared with others, huge funds to spend on development and ideally not waste on copying but to use those funds properly it has to decide which market areas offer the best return and then innovate and bring novelty to those areas. And those market areas might not be in hi-fi models which appeal to many of us.   Once again Hornby seems to have become hoist on the petard of its 'big bang' annual announcement and closely associated ordering system for why else would it be cancelling retailer orders long after they have been accepted?

What is interesting Dapol, Bachmann and Heljan seem happy to support special commissions and I would therefore assume they think it profitable whereas Hornby seem anti.

[spikey]

47 minutes ago, The Stationmaster said:

 

 ... having long condemned on here, and elsewhere, the deep discounters who for years distorted the model railway trade in Britain and created false impressions of price levels ...

 

Didn't they just.  And unless my recollection of the 1980s is completely wonky, the prime exponent of the practice was ... Hattons.

[Dunsignalling]

1 minute ago, CUCKOO LINE said:

What is interesting Dapol, Bachmann and Heljan seem happy to support special commissions and I would therefore assume they think it profitable whereas Hornby seem anti.

Not Invented Here Syndrome?

[CUCKOO LINE]

1 minute ago, spikey said:

 

Didn't they just.  And unless my recollection of the 1980s is completely wonky, the prime exponent of the practice was ... Hattons.

Don,t forget Railmail who I believe fell foul of the manufacturers and I think there was one or two more also

[Edwardian]

37 minutes ago, cbrooks122000 said:

 I am not sure dealing with John Lewis would be that great an idea. Every time I listen to their new chairman, she seems pretty clueless, coming up with "off the wall" ideas 

 

In that case, it sounds like Hornby is a perfect fit.

[The Stationmaster]

1 hour ago, Phil Parker said:

 

Remind me. What happened to the Tri-ang of those days?

The name appears to have vanished when Lines Brothers went into receivership in 1971.  Various of their ranges were sold off at that time - as already noted in respect of model railway items.  The name Triang-Hornby which had been introduced in 1964/65 was changed to Hornby in 1971, mainly it appears for marketing reasons, following the model railway business and brand being taken over on the demise of Lines Brothers.  Interestingly the 'Dublo' part of Lines Bros original acquisition following the collapse of Meccano Ltd went to the buyer of the model railway range and brand.  

 

So as far as model railways are concerned the Triang brand, or a brand name incorporating it, went out of use 50 years ago.  It was perhaps was seen as a commercially tainted name following the collapse of the company which had developed the name from their triangular logo?  Contemporaneously Triang trains had generally been regarded as the most down-market of the three r-t-r model railway ranges available up until then on the British market although they had seen some improvement in the 1960s.

 

Alas the liquidator's report for the disposal of Lines Brothers assets is not available online.

[Kris]

1 hour ago, Trains4U said:

It is probably worth noting that Hornby handle enterprise level business separately from independent retail business 

Tesco, Lidl, Argos and John Lewis are not going to be tiered...  These are huge contracts. Hornby probably sell more flying Scotsman train sets to Argos than all sets of all descriptions to all the independent retailers combined.

Doing this is a very sensible approach. The target markets for these retailers is very different to that of your average model shop.