ModelZone seeking Administration

[Nickt]

I understand that MZ will continue to accept their vouchers but at 50% of their face value. I am asking Santander, as my VISA card supplier, to make up the other 50% as part of the chargeback rules. 

[The Nth Degree]

I understand that MZ will continue to accept their vouchers but at 50% of their face value. I am asking Santander, as my VISA card supplier, to make up the other 50% as part of the chargeback rules. 

That's not correct. The condition is that you can't use vouchers to purchase items at any greater percentage than 50% of the value of the item. For example, if an item you want costs £20 you can only use vouchers up to the value of £10. The remaining 50% has to be in real money.

[The Stationmaster]

There are some interesting opinions in this thread, some quite negative regarding ModelZone. I've never been in one or know, generally, how their prices of all ranges compare to their competitors or RRPs.

 

However, I do know a little about 'concessions'. It appears that Hornby used ModelZone as a concession for their products so, in almost every case that I know of, the pricing structure in that particular concession would be set by Hornby, not ModelZone. MZ, by way of compensation, would receive either rent for the sales and stock space or commission from the sales, or a combination of both.

 

It could be that Hornby aided and abetted MZs demise by taking up valuable floor space for little or no return?

Judging by the Reading branch - which might of course be atypical - Hornby items occupy less than 15% of the display space with basically no serious competitor in the town or nearby now that Hoobycraft's range has been seriously chopped.  It costs Modelzone nothing except shelfspace and price entry/updates  and they presumably get a percentage on every Hornby item sold which sounds like quite a good deal as they are not having to invest in stock - which might be slow moving.  

[Legend]

I have just had the latest Hornby newsletter in which they say they have made price reductions on many of their new wagons and carriages (including the new Mark 1s). I wonder if this is as a result of the Modelzone failure.See http://Hornby.hornbynews.com/rp//383/process.clsp?t=28EE6A9E3BC94F980549A968F6060EB0F

Looks like a dose of reality is setting in. If this is one of the first moves of new management then I'm all for it. Well done them!

[Norm81]

The days of the specialist chain stores are over, it seems. While clothing and food outlets will continue to survive, I think the rest will not be able to keep going. What might happen though is that independents could create niches, as long as they have an online presence as well.

 

Something that independent model shops could explore is the idea of friendliness and social interaction. Why not have a tea and coffee corner, with some chairs and tables, so that the customers can sit in and have a chinwag about models and modelling? It's being done in other sectors like bookshops.

 

Well, my local shop has friendliess, social interaction and I'm always offered a cuppa even though I only go in maybe once a month after payday.

 

I've browsed in modelzone before but never bought anything directly from them, though I do have a test car 6 bought off eBay.

[Xerces Fobe2]

Modelzone were not a model shop but rather a very poor retail outlet as the majority of their staff were clueless about the products they were trying to sell.

 

XF

[Miss Prism]

I understand MZ Holborn is the only MZ with a Hornby concession - the rest of the MZs own their Hornby stock, but of course how much of it is actually currently paid for is another matter. I also understand MZ is re-instating near-RRP prices for items that were previously discounted; this might be on instruction from the Deloitte administrators as a move to make the stock value of MZ look bigger, but personally I can't see the logic of this, as it is likely in my view to make it more unattractive to a whiteknight saviour. In anycase, this is likely to be a temporary stance, and the big stock selloff is likely to commence in three or four weeks' time. Hornby, Gaugemaster and Peco are likely to be major creditors if/when liquidation commences, depending on how successful the stock selloff process is. Even if MZ does reappear under a different company guise, I imagine at least a dozen outlets will not re-open.

 

On the matter of MZ vouchers, I have no grounds for disagreeing with Nth Degree's report, but I would imagine Trading Standards would take a dim view of MZ's current position, but it does depend entirely on the small print of the Voucher scheme. (Correspondingly, there is some logic in raising any currently-discounted prices.)

 

What I don't understand is how Amerang has been swept up into the administration process (Amerang being a separate company, and allegedly profitable). Maybe Amerang has concluded it would not be able to continue if its principal retail outlet (MZ) were to disappear.

[Clive Mortimore]

I just love all this speculation. How about all of us wishing the administrators, all the best in finding a way of keep Modelzone trading.

 

 

Modelzone were not a model shop but rather a very poor retail outlet as the majority of their staff were clueless about the products they were trying to sell.

 

XF

 

Hi Nigel

 

Having worked in a model shop from what you suggest the staff at Modelzone seem well matched with most the customers I served.

[The Stationmaster]

 

I understand MZ Holborn is the only MZ with a Hornby concession - the rest of the MZs own their Hornby stock, but of course how much of it is actually currently paid for is another matter. I also understand MZ is re-instating near-RRP prices for items that were previously discounted; this might be on instruction from the Deloitte administrators as a move to make the stock value of MZ look bigger, but personally I can't see the logic of this, as it is likely in my view to make it more unattractive to a whiteknight saviour. In anycase, this is likely to be a temporary stance, and the big stock selloff is likely to commence in three or four weeks' time. Hornby, Gaugemaster and Peco are likely to be major creditors if/when liquidation commences, depending on how successful the stock selloff process is. Even if MZ does reappear under a different company guise, I imagine at least a dozen outlets will not re-open.

 

On the matter of MZ vouchers, I have no grounds for disagreeing with Nth Degree's report, but I would imagine Trading Standards would take a dim view of MZ's current position, but it does depend entirely on the small print of the Voucher scheme. (Correspondingly, there is some logic in raising any currently-discounted prices.)

 

What I don't understand is how Amerang has been swept up into the administration process (Amerang being a separate company, and allegedly profitable). Maybe Amerang has concluded it would not be able to continue if its principal retail outlet (MZ) were to disappear.

 

Interesting pint there Miss P - according to 'The Daily Telegraph' Business section report the Hornby concession runs through all 47 Modelzone stores and it, not Modelzone, owns the stock.  The report from Hornby itself does not say that but does say it considers its interest are 'protected to an acceptable level'.  However it has been noticeable in the past that Hornby prices in the Reading branch have generally moved exactly in accord with Hornby's own website prices including 'sale' offers going on at the same time and ceasing at the same time.  (Mind you I did get an ex display 'Castle' at very good price last year.)

 

Incidentally as far as Amerang are concerned I have wondered for some time if the stock they supply to Modelzone is accounted for between the two parts of the group - so possibly hence the holding group's reference to protecting Amerang's position?  (in order to avoid quantities of its line falling into the hands of a receiver and then being sold for what it will fetch before turning up in competition with Amerang?)

[Miss Prism]

Incidentally as far as Amerang are concerned I have wondered for some time if the stock they supply to Modelzone is accounted for between the two parts of the group - so possibly hence the holding group's reference to protecting Amerang's position?  (in order to avoid quantities of its line falling into the hands of a receiver and then being sold for what it will fetch before turning up in competition with Amerang?)

 

Yes, that sounds plausible, Mike.

[simoncorkswill]

And I thought Hawkins Bazaar had gone Belly up as well!

They certainly closed some outlets a while back.

 

Keith

That is correct , mordicae moved in when he left model zone , he actually built up model zone and originated from amerang I think ,hence amerang being swept up in administration . As you dig deeper you begin to get a picture of why this happened, it is a weak business model , sure some private capital business may well be roped in , how long it lasts who knows .

[EddieB]

Eddie, whereabouts in Essex are you?  There seems to be a lot of shops all over Essex (http://ukmodelshops.co.uk/county/Essex) without a Modelzone in sight.

I'm in Ilford, so my nearest non-MZ outlet is The Engine Shed, Leytonstone (but only as an "out of my way" journey).  MZ stores in Romford, Westfield and New Oxford Street tend to be the most handy in terms of work and family shopping trips.

[47164]

MZ have been very good for special editions, but their general prices are enough to drive people away , which is a shame against competition  such XBOX etc The high street does need a chain of model shops, but maybe economics are stacked against them.... so nows the time to really support your independant local model shop.   

[Crantock]

Modelzone opened on Sundays.   The number of model shops open on Sunday is pitifully few.  

 

That apart, they were overstaffed and overpriced.  But good for that "need" purchase of paint on a Sunday.  

[Coombe Barton]

Modelzone opened on Sundays.   The number of model shops open on Sunday is pitifully few.  

 

That apart, they were overstaffed and overpriced.  But good for that "need" purchase of paint on a Sunday.  

 

But our nearest one is a hour and a half round trip plus three quids parking away. That's a load of chunk out of a Sunday.

 

I expect it's the same for a lot of people.

[Grafarman]

Visited Modelzone in Westfield, Stratford yesterday evening, was greeted by friendly staff and after asking if they had any N gauge stuff left was directed to a case with a few items in; the assistant was suitably apologetic but as it turned out it was fine as they had a Farish Pullman FK at half price and an RFO for £17.  As I had a £10 gift voucher I decided to buy the RFO as I already had enough Pullmans, and got a VW camper van for £3 to make up the £20 to use the voucher.  No more than I'd pay on the internet and I had the chance to 'handle' the goods before purchase; no problems...

 

I for one will miss them; like EddieB above, The Engine Shed in Leytonstone is my nearest 'proper' model shop, but Dave's stock has been dwindling for a number of years and I only visit there when I know he has some secondhand stuff come in...

 

Interestingly, there was a mall-booth store on another level at Westfield with some lovely ladies offering beauty tips and treatments to passers-by...their name? 

 

Models' Own

[Gruffalo]

News today shows unsecured creditors loosing out big time whilst administrators charging up to £1000 per hour are managing to reduce the pain of insolvency to banks and secured lenders. MZ isn't the biggest one and won't be the last as we all swing to e-commerce where, whilst there are risks to purchasers, they seem to be little more than what we face shopping on the High Street in these days when stock is brought in to order.

[Linners]

I've just returned from holiday, and I consider this to be sad news, not least for those staff who must be wondering about whether they will continue to have a job in these hard financial times.

 

Very early on, one poster states that this is akin to Beatties 2. I must say that when Modelzone opened in Cardiff, and then Swansea, I was really pleased, and having researched the company a little it struck me just how similar to Beatties the Modelzone business was - not least that their so called flag-ship store being in Holburn in London (only recently re-locating to New Oxford St).

 

I also believe that Beatties was "owned/managed" by parent company Richard Kohnstan or RIKO, just as Modelzone was owned by Amerang, a large toy and model supplier to trade. Furthermore their expansion and new store opening was proliferative to say the least (almost akin to Greggs) - and to me this did seem to be a cause for concern as hobby/toy items are very much in the province of luxuries rather than necessities.

 

That said I have bought items in both the Cardiff and Swansea stores, the swansea one being a real shot in the arm for modellers in this part of the world since the demise of the Swansea model shop. Despite many RRP's there were always bargains to be had (again might this have been an early sign? I bought a Tamiya RC kit for 50% less than the RRP just over 20 months ago). As an N-gauge modeller, I could not say their coverage of the Farish range was particularly wide, but as others rightly say there was also the opportunity to obtain general consumables such as paint, glue and scenery.

 

I'm not sure that Hornby will be interested in moving into high street sales - concessions (or shops within shops) are a much cheaper way of maintaining a high street presence, again Hornby had an outlet in David Morgan, a much missed and highly valued department store in Cardiff which was sold for apartments and high street retail outlets, and I bought a great deal from them until closure, and again a godd range of bargains was usually available.

 

I hope a successful rescue package will be forthcoming, I certainly hope that the Signal Box will also survive, until then fingers crossed and best wishes to all those staff who will be watching and waiting with bated breath.

[Stevelewis]

But our nearest one is a hour and a half round trip plus three quids parking away. That's a load of chunk out of a Sunday.

 

I expect it's the same for a lot of people.

My nearest MZ  is/was  but  30 mins  or so drive  away  but I never  ever  made  a  special journey  there |I only  called  in  when I was  actually in the  City  for  work purposes,

 

I find it  far  easier  and  less expensive in terms of  time  and  money  to  Mail order,   A journey to  local MZ  took around  30 mins as mentioned  above, 10 mins  or more  getting  in and  then  out of a   car park  Car  park  costs   £4.00    possibly more depending on time  and  around a gallon  of  petrol 

 

Wheras an order to a well know Retailer  which i do  quite  frequently  takes  around  10 mins  next day  delivery costs £7.00 and of course  the  orders  costs  quite a bit  less!

[RJS1977]

Modelzone opened on Sundays.   The number of model shops open on Sunday is pitifully few.  

 

That apart, they were overstaffed and overpriced.  But good for that "need" purchase of paint on a Sunday.  

 

That in itself may have been a contributory factor. Unless you sell significantly more over 7 days than in 6 (and people only have a fixed amount of money to spend), the extra staffing/lighting costs can wind up costing more than the increased sales. 

[Coach bogie]

I am not a regular frequenter of Modelzone ( I use Peter's Spares and Waltons of Altrincham as my main modelshops) but did visit the Holborn branch before it moved, if I was in London. On enquiring about certain items, I was told it was not in stock. Instead of the sales person offering to order it in, I was recommended to go and purchase from MZ online. I have seen this happen with other cutomers. It happened to my wife who was trying to buy me something 'trainy' for a present. When my wife did search the item online, the same product obviously pops up from competitors. Not being train shop savvy, Hattons got the business. How many other less informed customers were lost in this way?  When measuring till receipts per store, this could not have helped the total annual profit.

 

I always wondered how a model shop could remain profitable after paying out for London (and other big city) rents/taxes. Clearly they can't. The shops that are still around from my youth are in suburbs or low rent areas.

 

Mike Wiltshire

[melmerby]

The high street does need a chain of model shops, 

Not sure how the High Street needs a chain of model shops. They are hardly high on most peoples shopping list!

 

Desriable maybe be for the likes of us, but not IMHO "needs".

 

Keith

 

EDIT: these days most of the customers seem to be adults.

A lot of who would have been customers years ago, "boys", now want mobiles, mp3s and games consoles etc

[Coombe Barton]

Not sure how the High Street needs a chain of model shops. They are hardly high on most peoples shopping list!

 

Desriable maybe be for the likes of us, but not needs.

 

Keith

 

But if you don't showcase the 'toy' end of the market in places where families frequent how are you going to get new people (especially kids) into the hobby?

[RJS1977]

But if you don't showcase the 'toy' end of the market in places where families frequent how are you going to get new people (especially kids) into the hobby?

 

Quite. As I've said before, I don't have a problem with the availability of the modern super-detailed models, but I believe there still needs to be more of the "budget" type models made available for those of us who can't afford/justify buying the more expensive models, or for those of us who want to carry out a repaint/modification. I think the lack of more affordable models (not just in the railway range, but aircraft and buses too) may well have been another factor in MZ's problems.

[Coombe Barton]

So apart from 'Thomas', how do we get people into the hobby?

 

And yes, this is a question that's been asked many, many times on this forum, do please don't answer. Let's concentrate on the MZ issues.

 

The thing is, I consider myself a modeller yet the last time I bought anything RTR was ages ago. I've bought kits mostly from the specialist end of the market. MZ doesn't have a chance with someone like me. They need volume (and deep packets) from their customers. Recession,austerity and high prices don't help.

 

But is there room for part-ex or secondhand being promoted? Would that encourage more people?

 

Or do you need the specialist input that very few people have? And they'd be spread too thin.