Hornby Hobbies Ltd ? 2013 Product Delays and Modelzone Announcement

[Btourer]

Hi everyone,

 

Having visited my local model shop at least once a month since the beginning of the year and most recently yesterday, the situation with the volume of Hornby products that are being sent to retailers is very poor indeed. There is very little in stock, and as the year has progressed the display cabinet with the locos and the shelves with the carriages and wagons have become increasingly bare.

 

Last year I must have purchased at least ten Hornby locomotives, however I am only looking for maybe a couple of Thompson B1s this year. There is plenty in the carriage range that interests me, however, the Thompson suburbans have been delayed until next year, the Gresley corridor 3rds I wanted last year have still not arrived and when the Gresley suburbans came out recently I could only get one composite and one third.

 

My local model shop has always been a big Hornby retailer, at times in the past they did not have any Bachmann stock in store at all. Lately though, they have been increasing the amount of Bachmann stock in store. It is a real shame that Hornby cannot supply products to meet the demand, because it is not only affecting Hornby but also local, family owned businesses that have been loyal to Hornby as a brand. If this trend continues, it could ultimately lead to the end of Hornby. You can't make money as a manufacturer without stock, and you can't afford to alienate your retailers by only sending a package with only one or two locos and a couple of coaches every month for them to sell.

 

I hope that Hornby can make it through their difficulties and make next year a success, models like their A3, A4, Britannia, Clan and B1 are excellent and they deserve to succeed. But based on the unreliability of timely delivery of new products, product (and livery/names - 3 versions of 'Flying Scotsman in one catalogue!!!) selection and 'Design Clever', I have some doubts.

[Ian Hargrave]

Hornby already sell direct and keep retailers short.Remember the '2-BIL' saga ? I would have no confidence in Hornby's concern for the retail trade.......Rhett Butler to Scarlett O' Hara in 'Gone With The Wind'  would summarise the situation in a nutshell.

[7013]

Went into my local shop today. It has run its Hornby stock right down and is discounting some locos, like Btourer my shop used to carry a large Hornby stock and a small Bachmann stock, they are about equal now and have shrunk considerably over the last year. I was amazed to see that there were only about 6 Hornby Wagons and 6 coaches on the shelf, I was told that it was a combination of many things, i.e. The recession, difficulty with supplies and consumers not buying. They said they could order stuff for me but it may take a while to come in. Fortunately for this shop it has a large diverse range and caters for many hobbies and toys, sadly it seems they don't need Hornby as much as they used to, and this is an official Hornby stockist. What did surprise me is that kits, craft, and modelling materials have shown a large increase in stock.

[Andy W]

Presumably Hornby will start reclaiming the large amount of stock sitting in Modelzone branches as, regrettably, they inevitably close. As this is concession stock it isn't included in the closing down sales now emblazoned across the store fronts.

What they do with the stock when it reappears at Margate is arguable - do they try to sell it through the website or make it available to the model trade? How many model shops have reduced their Hornby stock because they can't get supplies of what they want to sell, and would accept this stock if it became available?

[Budgie]

Presumably Hornby will start reclaiming the large amount of stock sitting in Modelzone branches as, regrettably, they inevitably close. As this is concession stock it isn't included in the closing down sales now emblazoned across the store fronts.

What they do with the stock when it reappears at Margate is arguable - do they try to sell it through the website or make it available to the model trade? How many model shops have reduced their Hornby stock because they can't get supplies of what they want to sell, and would accept this stock if it became available?

Does the part of this stock that has been removed from boxes to be displayed qualify for a price reduction (as ex-display stock)?

[Andy W]

Only if they can't get it back in the boxes without this being obvious, or if it has been damaged while on display, I'd have thought.

[G-BOAF]

Since when did model shops sell current items at a below the stores prices just for being on display? If you buy the last one from any retailer with a shop, it is normally the 'display item'. Unless it is shop soiled or very old stock, I wouldn't expect a discount. If I were a collector who never removed itesm form boxes, this may affect my decision to buy,

[robmcg]

I think a shop which can sell a product as unmarked and new has every right to take it out and test run or display it and subsequently sell it for full price.  The buyer has trade law protection after all.   It is impossible to take some new models out of their packaging without leaving traces, like crumpled tissues on earlier Hornby and Bachmann RTR 00 models, but boxes can be carefully opened without a trace.  Display dust will be evident if left out for long. Buyer's choice; 'un-opened, un-tested', or test-run and so on.

 

I think caveat emptor and if I like the model and it is unmarked, even if it has been test run, I will possibly pay full retail. Of course I'll always bargain for a discount.

[simoncorkswill]

Hi everyone,

 

Having visited my local model shop at least once a month since the beginning of the year and most recently yesterday, the situation with the volume of Hornby products that are being sent to retailers is very poor indeed. There is very little in stock, and as the year has progressed the display cabinet with the locos and the shelves with the carriages and wagons have become increasingly bare.

 

Last year I must have purchased at least ten Hornby locomotives, however I am only looking for maybe a couple of Thompson B1s this year. There is plenty in the carriage range that interests me, however, the Thompson suburbans have been delayed until next year, the Gresley corridor 3rds I wanted last year have still not arrived and when the Gresley suburbans came out recently I could only get one composite and one third.

 

My local model shop has always been a big Hornby retailer, at times in the past they did not have any Bachmann stock in store at all. Lately though, they have been increasing the amount of Bachmann stock in store. It is a real shame that Hornby cannot supply products to meet the demand, because it is not only affecting Hornby but also local, family owned businesses that have been loyal to Hornby as a brand. If this trend continues, it could ultimately lead to the end of Hornby. You can't make money as a manufacturer without stock, and you can't afford to alienate your retailers by only sending a package with only one or two locos and a couple of coaches every month for them to sell.

 

I hope that Hornby can make it through their difficulties and make next year a success, models like their A3, A4, Britannia, Clan and B1 are excellent and they deserve to succeed. But based on the unreliability of timely delivery of new products, product (and livery/names - 3 versions of 'Flying Scotsman in one catalogue!!!) selection and 'Design Clever', I have some doubts.

 

Talking to my local retailer , they advise that simply as Hornby have cosied up to the likes of Model Zone , flogged there own stuff online in direct competition , even to the extent of having offers that are not made available to the retailer , reducing discount to the trade , shorted retailers on supplies such as the 2 bil and 42/72xx that they now give preference to Bachmann and others as Hornby clearly do not want to support them .

[Ian Hargrave]

Hornby heading for the 'direct sell' route exclusively ?  Denials,rebuttals,protestations......'Who,me,guv......would I,honestly.......I'm Delboy's best mate'

[Budgie]

Does the part of this stock that has been removed from boxes to be displayed qualify for a price reduction (as ex-display stock)?

<Bernard Bresslaw (remember him?)>

I only asked.

</Bernard Bresslaw>

[Oldddudders]

Hornby heading for the 'direct sell' route exclusively ?  Denials,rebuttals,protestations......'Who,me,guv......would I,honestly.......I'm Delboy's best mate'

I'm afraid that in an era when so many of us (even within the UK) make our major purchases online, Hornby shareholders would seem to have a right to expect that their company maximises the value of its production by doing just that. Of course, while other brands continue to play fair with what's left of the high street and the boxshifters, Hornby may struggle to sell as much at full RRP. But if they make killer products the market will chase them. OTOH, too many slip-ups like the 4-VEP and it's curtains.

[Ian Hargrave]

If this IS truly the path they are following,then OK....fine ....but now their product has to be 'high-end' every time with meticulous attention to consistency of finish,quality and DELIVERY. Maybe,then, direct sell would be beneficial to a certain degree.Not,of course to the dwindling retail trade. A simple tweak might be to follow Bachmann's example and rigorously control distribution  and resale price by cutting out the wholesale distributors.

 

       There is still no evidence of a tighter control of manufacturing at the sharp end......i.e. QC and delivery timescale. We live in the hope of better things to come.Hornby is the little girl with a curl in the middle of her forehead.

[The Stationmaster]

If this IS truly the path they are following,then OK....fine ....but now their product has to be 'high-end' every time with meticulous attention to consistency of finish,quality and DELIVERY. Maybe,then, direct sell would be beneficial to a certain degree.Not,of course to the dwindling retail trade. A simple tweak might be to follow Bachmann's example and rigorously control distribution  and resale price by cutting out the wholesale distributors.

 

       There is still no evidence of a tighter control of manufacturing at the sharp end......i.e. QC and delivery timescale. We live in the hope of better things to come.Hornby is the little girl with a curl in the middle of her forehead.

While I understand very much the point the other Ian (Olddudders) has made I tend to agree with this Ian (Hargrave) on this one.  Hornby are capable of turning out some top notch stuff and some of it is undoubtedly worth the RRP price level (and is probably still a bargain in a number of examples).  But at the other end of the scale, and in between the two extremes I seriously wonder if some of their products are marketable at anywhere near RRP and it would seem that message has, to some extent, got through to them in the light of recent price revisions.

 

However they still sit - I feel - rather uncomfortably in the current marketplace.  They are clearly trying to reduce deep discounting by retailers, hence their revised trade terms and I don't think that is necessarily a bad thing - but it is a much better thing when RRP reflects perceived product value and when it is not subsequently seen as too high by those who have come into the hobby at Railroad/Thomas level; I think that is a risk they run, to their longer term disadvantage.

 

But I don't think there's anything wrong with them selling direct if that happens to rock their boat - provided they do so on a level playing field and don't 'support' their market position by denying supplies to front line retailers thus potentially putting such businesses at risk.  And if they are going to sell at 'high end' RRP, be it direct or through concessions etc, then the product we buy has got to come with the quality that matches the price.  To some extent that is subjective as we all see value for money in different ways but at least it must mean that all parts are present and fitted correctly and the thing works in the way intended.  Maybe we should go back to the good old Hornby Dublo days of the little 'tested by' tag attached to every new loco - obviously that will push the price up but it will also push down the returns and the moaning quotient.

[7013]

Are Hornby going down the direct sell route or is this speculation? If that were the case I see the demise of Hornby as a railway model manufacturer on the horizon

[Fat Controller]

Are Hornby going down the direct sell route or is this speculation? If that were the case I see the demise of Hornby as a railway model manufacturer on the horizon

They have been doing a certain amount of selling via their web-site for some time now, but the most recent development has been their announcement that the N gauge 'Brighton Belle' will be available from them alone.

[The Stationmaster]

Are Hornby going down the direct sell route or is this speculation? If that were the case I see the demise of Hornby as a railway model manufacturer on the horizon

Their past few reports have emphasised the increase in sales from direct selling and concessions and added that they see this as an important area for the future which will continue to grow.  However as it happens direct sales actually declined between year ended 2012 and year ended 2013 although by nothing like as great an extent as sales via independent retailers; sales via concessions rose slightly.

 

Hornby reaffirmed their commitment to independent retailers in Andy's interview with Roger Canham so we will have to see what transpires when the next batch of new products arrive as that should prove the commitment one way or another.  The increasingly probable loss of the Modelzone concessionary outlets also injects another factor into the whole mix as it allowed quite a wide spread of 'High Street' outlets which will potentially be lost and thus might release both stock availability and market share to independents, maybe!

[frobisher]

They have been doing a certain amount of selling via their web-site for some time now, but the most recent development has been their announcement that the N gauge 'Brighton Belle' will be available from them alone.

As I commented elsewhere, that's not necessarily the same thing, but a by product of the fact that it is an Arnold/Hornby International not a Hornby UK product and Hornby UK are not the UK distributers of Hornby International.

[Matabiau]

I believe Hornby have every right to sell occasional items direct from their website, they already do so through their collectors' club for OO models and no-one complains. My only gripe in the case of the Arnold Brighton Belle is that this wasn't made clear from the outset. Lots of customers upon reading the announcement with joy proceeded to place orders (or at least reservations) through their local retailers only to be told later on that Hornby had decided to restrict UK sales to their website.

I would very much like to buy a model through their website but Hornby have recently changed their online sales software so my credit card is rejected as the site is unable to handle French postal addresses. It seems to mess around with the format so that it no longer corresponds to the bank's (correct) version and as such the transaction, although authorized by the bank, is rejected. 

[G-BOAF]

Does the part of this stock that has been removed from boxes to be displayed qualify for a price reduction (as ex-display stock)?

Just re-read this post. Having initially disagreed with it, I've rethought. If I'm buying a model on display, and the retailer reboxes it, fine, I've seen the model and knew it was on display.

If it was on display, reboxed and sent back to Hornby for redistribution 'as new' to the trade, or to Hornby this is NOT RIGHT, becuase I will be buying something new and untouched, when this may not be the case. Subtle difference but a valid one. I will guess that display stock will be left to maintain a Hornby presence.

[phil gollin]

,

 

This link was posted on a modelling board, nothing specifically about trains (except for the headline), it SEEMS to be about some (????) of the Airfix kit range ;

 

http://edition.cnn.com/2013/08/01/business/Hornby-model-planes-trains/index.html?hpt=hp_bn1

 

 

STORY HIGHLIGHTS

• Part of Hornby's Airfix range, the iconic model plane kit, will soon be made in the UK
• Now the company can react to market demand much faster and the CEO can keep an eye on the quality
• In China private-sector wages rose 14% in 2012, up from a 12.3% increase in 2011

 

(CNN) -- UK company Hornby's model planes and trains have been made in low-cost emerging markets for decades. Now, piece by piece, production is being brought back home.

 

Hornby's iconic model plane kit, part of the company's Airfix range, will soon be made in the UK. The company will be making up to 1,000 of the kits a day.

 

"It's a very British brand with huge heritage.. once upon a time it was all manufactured here in the UK," says Roger Canham, Hornby chief executive. "Airfix actually went to India, but the marketplace is changing now."

 

Hornby's reversal is the latest in the trend of "backshoring" that has seen British businesses such as Topshop, Symington's, Caldeira, and DFS, all repatriating some manufacturing from China in the face of rising labor costs overseas.

 

Canham says offshoring production has never been easy. "Some of the difficulties you have are going to a different time zone, talking to people who don't necessarily speak the same language, actually, or culturally, or even technically."

 

Those were challenges Canham was willing to face when the cost-saving was significant. But such benefits are no longer a given.

 

In China, private-sector wages rose 14% in 2012, compared to a 12.3% increase the previous year, according to China's National Bureau of Statistics. The ageing population has led to a shrinking labor force, likely to contribute to rising wages in years to come.

 

This isn't Hornby's first back-pedal on production in an emerging market. Earlier this year, it brought some of its Humbrol paint facility back from China following labour disputes and concerns about quality. Offshoring production also meant there was a lag time in meeting consumer demand.

 

"Just the physical shipping time will be about four weeks," Canham says. "So even if we found out today that this product was selling very strongly and we placed additional orders, that's four weeks of the market that we have potentially missed."

 

Now the company can react to market demand much faster and the chief executive can keep an eye on the quality of the production of the Airfix models, once more labeled "Made in Britain."

[Ozexpatriate]

This link was posted on a modelling board, nothing specifically about trains (except for the headline), it SEEMS to be about some (????) of the Airfix kit range ;

To the best of my understanding it's only the new "LEGO"-like quick-build kits.  They look fun - particularly for youngsters familiar with LEGO.

 

We've discussed it before a couple of times.

 

I'll see if I can find my post with pictures.

[robmcg]

Their past few reports have emphasised the increase in sales from direct selling and concessions and added that they see this as an important area for the future which will continue to grow.  However as it happens direct sales actually declined between year ended 2012 and year ended 2013 although by nothing like as great an extent as sales via independent retailers; sales via concessions rose slightly.

 

Hornby reaffirmed their commitment to independent retailers in Andy's interview with Roger Canham so we will have to see what transpires when the next batch of new products arrive as that should prove the commitment one way or another.  The increasingly probable loss of the Modelzone concessionary outlets also injects another factor into the whole mix as it allowed quite a wide spread of 'High Street' outlets which will potentially be lost and thus might release both stock availability and market share to independents, maybe!

 

Is anyone able to cast light on Hornby's current trading and delivery of products?  Seems very quiet except for continuing delays, with RTR 00 trains at least.

 

Perhaps I have missed any recent news or statements from the company?

 

Rob

[Ozexpatriate]

Perhaps I have missed any recent news or statements from the company?

There's the royal baby Corgi commemorative mini announced in July, but I'm guessing that's not what you are looking for.

 

But since you mentioned it, there is an interim trading statement from July 25.

 

It doesn't contain much, but it is telling that Roger Canham felt obliged to make a public statement after the first quarter. Hornby don't usually announce any interim statements until the close of the first half, at the end of September.

 

There is a £0.2m writedown due to ModelZone and this outlook:

As we look towards the end of the year, consumer confidence in the pre-Christmas period will be an important factor in determining the overall result for the current financial year. We have a strong new product pipeline and initial indicators of listings and orders are encouraging. On time delivery of our product will also be an influential factor, as our new manufacturers start to deliver a greater percentage of our production and the important Christmas product lines have been given the appropriate priority.

(my emphasis)

 

I had thought we were getting past hoping Father Christmas would bring them turnover for being good little girls and boys, but the comment on 'on-time' delivery of product is spot-on.

[The Stationmaster]

Some of that statement is quite amusing and leads to some further comments on their marketing - albeit not railway in this instance.  They currently have in the Airfix line a Lancaster, retailing at c£25-26, they also have a special pack Lancaster for the Battle of Britain Memorial flight which comes with paints plus a Hurricane and a Spitfire retailing at c.£33-35, plus another option, again including paints, for which you get the Lancaster plus a choice of a separately packaged Spitfire or Me 109 (normal retail well in excess of £5) for c.£30.  So who will buy a Lanc on its own for £25-26?  And of course they do train packs which virtually give away coaches with a loco which is already discounted from its individual RRP.

 

Such combinations don't suit every buyer of course but they do leave retailers wondering what Hornby Group are thinking?

 

Incidentally delivery of the main tranche of GW 8 coupled tanks is still scheduled for this month according to my two 'local' retailers.  And picking up on Michael's final point above I would have thought that for model railways the modern version of Christmas for Hornby (and others) is most likely the Warley show although I understand that sales still tend to rise towards the calendar year end (which is probably as much a consequence of product arrival on the shelves rather as the time of year).