Hornby is dead, long live the new Hornby

[Joseph_Pestell]

No basically it means selling them off cheap Phil - i.e. in Hornby's case both selling stuff out f its direct outlet at a lower price than normal retail (and in fact in some cases at well below the trade price to retailers) and selling it cheap in order simply to get rid of of it.  Another way of describing it is to undervalue your product by selling it at much less than it would normally be worth at retail level.

 

Which is an incredibly self-destructive strategy in the medium to long term. It should only ever be used in cases of dire emergency when no other option available.

 

Perhaps, if as reported above, the business is to have a better capital base, they won't need/want to do this again.

[dibber25]

This year, the magazines are starting to wonder what role they play? Hornby have stopped sending samples. Even here, even Bachmann are not shipping samples over by airfreight for reviews, review samples being taken from the main stock. Overall it seems models will be with many end consumers before a review can come out.

 

Hornby now announce things on the fly. Great for me but magazines which knew about it beforehand only learn about as I do. I do not think Hornby are alone in that however and may just be copying new low overheads entrants. (I dare not call them low cost!)

 

 

Thanks to Andy for responding to this, but I do wonder why anyone can make so positive a statement and be so utterly WRONG. Posts such as that are precisely why the hobby needs magazines and websites produced by professionals and cannot rely on the supposedly authoritative postings of individuals. Bachmann has not made any changes to the way it supplies review samples and is on record in public (on this forum) as having stated that it values magazine reviews and will continue to supply as it always has done. With regard to Hornby, the supply of samples has long been erratic and some magazines have been making their own arrangements, on and off, for years without any adverse effect on the timing of reviews. The main magazines continue to reach in excess of 100,000 readers a month. Many of them are not internet-savvy, do not look at forums, and many of them are potential Hornby customers. The magazines will continue to serve them with information and reviews of Hornby products as they have done in the past. 

CHRIS LEIGH

[BR(S)]

Chris, you might want to edit your post #29 as the post you quoted has merged into your own posting and it all reads as your own view (especially for those who only read a few sentences before firing off a response)!

[Andy Y]

Chris, you might want to edit your post #29 as the post you quoted has merged into your own posting and it all reads as your own view (especially for those who only read a few sentences before firing off a response)!

 

Now sorted.

[jjb1970]

I know that the forums only represent a proportion of the hobby and that many many modellers never join or follow any of them. However I think that the number of modellers who do not access the Internet must be rather small now and declining as I know very few people (of all ages down to small children and right up to people in their 90's) who do not use the Internet at all and it is now the principal source of information for many (I won't say most as I cannot substantiate it). So whilst many modellers avoid forums, I'm guessing they do visit manufacturer web sites, shop on-line and do research into the prototype on-line. So I do think there has been a fundamental shift towards the Internet. That is not to say magazines do not have their place, I buy magazines as well as using the Internet and I'm sure there are those who rely on magazines with no web access but overall I think the trend has been and will continue to be towards on-line information. So whilst I am not sure whether Hornby's move towards direct comms is ideal and it may be slightly premature, I also do not see it as a silly move either.

[The Stationmaster]

I know that the forums only represent a proportion of the hobby and that many many modellers never join or follow any of them. However I think that the number of modellers who do not access the Internet must be rather small now and declining as I know very few people (of all ages down to small children and right up to people in their 90's) who do not use the Internet at all and it is now the principal source of information for many (I won't say most as I cannot substantiate it). So whilst many modellers avoid forums, I'm guessing they do visit manufacturer web sites, shop on-line and do research into the prototype on-line. So I do think there has been a fundamental shift towards the Internet. That is not to say magazines do not have their place, I buy magazines as well as using the Internet and I'm sure there are those who rely on magazines with no web access but overall I think the trend has been and will continue to be towards on-line information. So whilst I am not sure whether Hornby's move towards direct comms is ideal and it may be slightly premature, I also do not see it as a silly move either.

It is interesting to look at Hornby's Annual Report - linked in a post on the previous page of this thread - where magazines are highlighted as a means, among others, of communicating the product to the marketplace.  Or maybe they just mean ads in magazines?

['CHARD]

The future for modern image surely has to be in multiple units, EMU's and AC electrics specifically.

 

There's next to nothing in 25v AC EMUs out there, yet a wealth of subject matter to pick from.

Similar AC electrics are seldom served.

 

Whilst not a fan of AC electrics, and the constant story that electrics don't sell, if you look at the continent (which means Germany, and it's Europe that our Chinese friends want the UK to be like)..you can see  how many modelled classes have been done and how popular they are.

I don't have any doubts that an 81 could sell and as the 84 is an NRM loco.. maybe that might hit the Locomotion list ?.. Heljan 86s are pretty rare.

 

but I do believe that classes 303, 304/5/8 would sell very well and some of the more modern 313/319/321 etc would find a place.

 

 

It is very pleasing to see more pre-grouping stock out there... maybe as they've announced LSWR and GW stock, we could move on to some nice L&Y coaches and perhaps some GNR / NER ones ?

 

The future for modern image is a very hard phrase to wrestle with! Class 303/4/5/8 are steam era in origin, 313 are now old EMUs and 319/321 are way beyond half-life. I don't see any evidence that any of these would sell 'well' enough in the sense that would make the sort of returns Hornby demands. 

 

The real 'Modern Image' by today's standards isn't badly served by Hornby, they have made the Pendolino and Javelin, after all.  How many of these sell beyond the trainset market is open to conjecture, but I can't remember seeing many, or indeed any, running at shows.

 

Hornby hasn't rushed to update the 86, 87, 90 or 91, and its 86 is considered sufficiently good by many respected modellers, that it was the reason for the failure of Heljan's admittedly foot-shooting effort.

 

I don't know if it's lack of OHLE that stifles the market, or just that to many, leccies are simply underwhelming.

[Legend]

 

 

Thanks to Andy for responding to this, but I do wonder why anyone can make so positive a statement and be so utterly WRONG. Posts such as that are precisely why the hobby needs magazines and websites produced by professionals and cannot rely on the supposedly authoritative postings of individuals. Bachmann has not made any changes to the way it supplies review samples and is on record in public (on this forum) as having stated that it values magazine reviews and will continue to supply as it always has done. With regard to Hornby, the supply of samples has long been erratic and some magazines have been making their own arrangements, on and off, for years without any adverse effect on the timing of reviews. The main magazines continue to reach in excess of 100,000 readers a month. Many of them are not internet-savvy, do not look at forums, and many of them are potential Hornby customers. The magazines will continue to serve them with information and reviews of Hornby products as they have done in the past.

CHRIS LEIGH[/quote)

 

 

Surely this can be a win win scenario with Hornby talking direct to their end customers and magazines following on with the news for those who do not have access to the net. However this must be a rapidly shrinking band with even my parents aged in their 80s accessing the net. I think this direct approach of Hornby is refreshing and its a two way street as they are clearly paying attention. I also don't agree we should revert to only getting our news from magazines.

[Graham Walters]

It's one thing to make announcements, and another to produce the goods, time will tell if Hornby can produce the stock they are promising in the quantities to fulfill the market at the right price, the rise of RTR models is an example of a manufacturer trying to please two masters, surely it cannot long term support both ?

 

As for the "Golden Age" being more popular, I think this is down more to variety rather than demand, I have very little interest in diesels, and to my eye they all look the same, they are roughly the same size, and you have to know what you are looking at to spot differences. Whereas with steam the differences are a lot more obvious, the engines have been given names etc, and then there are the romantic images of loco's steaming to the seaside or to the Dales, very evocative.

 

On another note I have had to switch to 'N' gauge because of space, Hornby seem to ignore this, and it could be their downfall, as houses get more expensive, and space inside and out becomes more of an issue to many, I can only see 'N' getting even more popular, and 00 becoming a specialised gauge.

[dibber25]

 

 

Thanks to Andy for responding to this, but I do wonder why anyone can make so positive a statement and be so utterly WRONG. Posts such as that are precisely why the hobby needs magazines and websites produced by professionals and cannot rely on the supposedly authoritative postings of individuals. Bachmann has not made any changes to the way it supplies review samples and is on record in public (on this forum) as having stated that it values magazine reviews and will continue to supply as it always has done. With regard to Hornby, the supply of samples has long been erratic and some magazines have been making their own arrangements, on and off, for years without any adverse effect on the timing of reviews. The main magazines continue to reach in excess of 100,000 readers a month. Many of them are not internet-savvy, do not look at forums, and many of them are potential Hornby customers. The magazines will continue to serve them with information and reviews of Hornby products as they have done in the past.

CHRIS LEIGH[/quote)

 

 

Surely this can be a win win scenario with Hornby talking direct to their end customers and magazines following on with the news for those who do not have access to the net. However this must be a rapidly shrinking band with even my parents aged in their 80s accessing the net. I think this direct approach of Hornby is refreshing and its a two way street as they are clearly paying attention. I also don't agree we should revert to only getting our news from magazines.

I never said anyone should ONLY get their news from magazines (we have a Model Rail website and Facebook page, too) but I DO know Model Rail readers and it is my experience that every time we do anything which is ONLY on-line, we get lots of flack from readers who feel excluded because they don't have internet access. It is also a fact that the growth of Kindle etc and on-line books has led to INCREASED sales of printed books, not a loss of sales. As to the availability of review samples I have two Hornby '700s' on their way to me, expected to arrive on Saturday. Had they come direct from Margate as free samples, they would normally have turned up by courier late on Friday afternoon (Hornby samples usually arrived last thing Friday) so I don't envisage any significant difference in when the review will get published. Too late for issue 211, so they'll be in 212. So, one way and another, not making too much difference to us.

CHRIS LEIGH

[jjb1970]

I find I often buy books twice, a "working copy" on Kindle and a good hard cover copy for my home library so certainly the E-Reader has multiplied book sales in my case.

I don't think it is either - or but both in terms of magazines and on-line communications, in the same way that many use both on-line ordering and visits to physical model shops to buy models. That said personally I do expect the market to tilt more towards on-line channels whether or not I like it.

[newbryford]

 

 

As for the "Golden Age" being more popular, I think this is down more to variety rather than demand, I have very little interest in diesels, and to my eye they all look the same, they are roughly the same size, and you have to know what you are looking at to spot differences. Whereas with steam the differences are a lot more obvious, the engines have been given names etc, and then there are the romantic images of loco's steaming to the seaside or to the Dales, very evocative.

 

 

 

Apologies for going OT.

 

Hmmm - A GWR man ( I presume GWR, as that's the avatar) saying that all diesels look the same. Very much a case of the kettle calling the pot green  black.

I have enough trouble distinguishing between the various 4-6-0's of Swindon persuasion. King/Castle/Star/Saint/Grange/Hall/Manor/County - there may be others - just another same looking green loco to me. And don't even start on pannier tanks.

Quoting that the differences are noticeable by looking at names - ???? Just the same as noting that the differences are noticed by a different number. Evocative has nothing to do with it.

 

If you're not interested in diesels, then that's all you need to say.

 

Cheers,

Mick

[Ozexpatriate]

It is interesting to look at Hornby's Annual Report ... where magazines are highlighted as a means, among others, of communicating the product to the marketplace.  Or maybe they just mean ads in magazines?

In the graphic Mike, where it says "Clubs, Magazines and Subscriptions"? This wasn't emphasized anywhere else and I though I haven't checked, don't think there's any change to the strategy diagram since it was first published.

 

I wondered if the "magazine" reference was to the Collectors' Club magazine, but it's vague enough to be a catch-all.

 

Good to read the annual report, much more detail than I'd expect but points of note are:

 

1. Moving completely from Margate (closing the visitor centre there)

2. Success, growth and expansion of the online marketing and sales channel business

3. Expand further into European markets

4. Reducing dependence on retailers, more focus on online, concession and exhibition selling.

5. Looking at manufacturing in SE Asia, plus securing own premises in China.

 

 

All seems very upbeat, but if they are seeking to raise £15mn then it has to be.

The delisting/relisting on the AIM branch to raise £15mn (15,789,474 new Ordinary Shares at 95 pence per share) is an interesting and creative move. Share price is 92p at the close.

 

The Telegraph headlines this move as: Troubled model trainmaker Hornby delists to raise £15m on AIM (My emphasis.)

 

It will be interesting to see what the business sections of the morning paper make of this. The combination of relisting the company, modifying their banking covenants again, and the mixed bag of results (operating and underlying profit with a reported loss*) demonstrates a couple of things to me:

 

1. The business is fragile, but returning to profitability

2. The executive team is really committed to Hornby PLC's success **(below)

 

* I haven't looked at the balance sheet in detail, but one-time charges for outsourcing logistics and moving to Sandwich will likely account for a lot of the difference between an operating profit but reporting a loss.

 

** This comment:

It is imperative that we do not allow the iconic heritage of our brands to wane but continue to build on the huge passion that is evident amongst our existing enthusiasts and also engage a new audience for our hobby and toy products.

The implication that things are pretty grim (the implied potential collapse of the brands) is stronger language that you see from most CEOs.

[Guest]

...and then there are the romantic images of loco's steaming to the seaside or to the Dales, very evocative.

 

Tosh. 1986, a grubby Class 37 or a pair of 20s and a filthy rake of Mk1/Mk2 coaches purring their way to Skeggy on a summer Saturday. That's all the "romance" I need. Can't you even bring yourself to love the Choppers, Graham? Like your beloved kettles, they rather stupidly only have a cab at one end....

 

Tongue... superglued... to... inside... of... cheek...

[APOLLO]

I have grubby old steam locos alongside both squeaky clean and mucky diesels running through the filthy coal iron & cotton landscape that was Ince, Wigan back in the late 50's / early 60's. Even the sparrows and dogs on my layout have pneumonia !! Romance indeed (of the Colin T Gifford kind).

 

Golden era, steam hauled trains full of happy people off to the seaside or dales, even a grubby pair of 20's (or  a B1) to Skeggy was mostly (except for holidays) beyond my ken as a youth, so I don't model that scene, I have nothing against those that do, there are many superb layouts of this nature, but not for me. I would like to do the S&D, a superb line which I had the good fortune to travel on Bath to Evercreech Jcn as a kid, but I really prefer urban grot for my layouts, and I can't model trees !!!

 

As to Hornby, well through the "Bargains" section of this site I managed to bag a few cheap items from there website recently, too cheap some would say, but who can refuse a bargain ?. Good luck to them, I hope they "live long and prosper", as Spock would say.

 

Brit15

[ruggedpeak]

** This comment:

The implication that things are pretty grim (the implied potential collapse of the brands) is stronger language that you see from most CEOs.

I don't think the quote suggests that at all, it basically says they can't rest on their brand laurels, and are clearly working hard not to.

 

The full report is relatively upbeat, and it makes a lot of sense to pay down bank debt and also move to market that does not have the horrifically expensive processes that the main FTSE has. For a company with a cap of about £36m it is not worth being on the main list as it costs too much to maintain.

 

They decided to raise funds to pay down debt, but could not afford the bankers and other fees required to meet the requirements to produce a prospectus and pay the various outfiuts required to raise funds on the main market. Interestingly yesterday the volume of shares traded wasn't too far off the entire number of shares issued, and cetainly way off anything seen for some time.

[DaveClass47]

The future for modern image surely has to be in multiple units, EMU's and AC electrics specifically.

 

There's next to nothing in 25v AC EMUs out there, yet a wealth of subject matter to pick from.

Similar AC electrics are seldom served.

 

Whilst not a fan of AC electrics, and the constant story that electrics don't sell, if you look at the continent (which means Germany, and it's Europe that our Chinese friends want the UK to be like)..you can see  how many modelled classes have been done and how popular they are.

I don't have any doubts that an 81 could sell and as the 84 is an NRM loco.. maybe that might hit the Locomotion list ?.. Heljan 86s are pretty rare.

 

but I do believe that classes 303, 304/5/8 would sell very well and some of the more modern 313/319/321 etc would find a place.

 

 

It is very pleasing to see more pre-grouping stock out there... maybe as they've announced LSWR and GW stock, we could move on to some nice L&Y coaches and perhaps some GNR / NER ones ?

Hi,

 

I think it is time Electrics were seriously invested in.   A new Class 87 and a new Class 91 with MK4 DVT is crying out to be produced.   The 91 is an iconic East coast loco and its the only ECML flagship that has not received a new lease of life (Hornby have the superb A3, A4, HST and Bachmann the Deltic).   

 

As for the 86's and 87's...both icons of the WCML.   There is so much potential in terms of liveries with these locos I cannot understand the manufacturers reluctance towards them.   

 

Glad to see Bachmann investing in the electrics with the new class 90, but it will be late 2017 until this rolls of the production track!

 

Check out my thread "Who wants a newly tooled class 91?"....as you can see, there is plenty of appetite for a new one....I only hope Hornby listen to my regular emails requesting a new 91 and DVT!   The wait goes on, but with every month that goes by a new 91 gets closer!!

[Littlethorpe]

 

On another note I have had to switch to 'N' gauge because of space, Hornby seem to ignore this, and it could be their downfall, as houses get more expensive, and space inside and out becomes more of an issue to many, I can only see 'N' getting even more popular, and 00 becoming a specialised gauge.

 

I agree as I have also made the same switch. I recently sold off all my OO Gauge stuff that had been boxed up and sitting in the loft for four years. Even if more space became magically available I would stick with N Gauge as I prefer to run prototypical length trains as far as is possible.

 

I'm sure that N Gauge must be in Hornby's future plans but they can't do everything at once. As a holder of a small number of Hornby Shares I want them to be successful and would love to be able to help by purchasing N Gauge products from them at some point in the future.

 

David

[Ronny]

That's exactly what it means plus selling your product at well under its normal market price or at a lower price than others are selling it at - which are all things Hornby has been doing.  (it might well be called 'dumping' in the USA?).

 

It does not mean this in the US. Here, selling below normal price is described as "having a sale" or "running a promotion". "Dumping" means selling below your production cost (i.e. selling at a loss) to force your competitor out of business. Often illegal. "Underselling" is never used to describe these acivities.

 

Thanks for the reply. I guess the common language strikes again :-)

[Ronny]

Which is an incredibly self-destructive strategy in the medium to long term. It should only ever be used in cases of dire emergency when no other option available.

 

Perhaps, if as reported above, the business is to have a better capital base, they won't need/want to do this again.

 

All businesses sell off slow moving stock at reduced prices. Often through the most surprising routes. For example, IBM liquidizes some of its slow sellers through eBay. Typically though, businesses have annual sales or regular promotions like a weekly "deal", just like Hornby.

 

And ALL businesses will have slow moving stock at some point or another no matter how brilliant they are are forecasting demand.

 

So please don't view this as poor management by Hornby. The new team is doing a great job and have the resuts to back them up. And they didn't have to be bought out by a foreign company to do it. If you're British, a cause for celebration I would think.

[Ronny]

The future for modern image surely has to be in multiple units, EMU's and AC electrics specifically.

 

There's next to nothing in 25v AC EMUs out there, yet a wealth of subject matter to pick from.

Similar AC electrics are seldom served.

 

Whilst not a fan of AC electrics, and the constant story that electrics don't sell, if you look at the continent (which means Germany, and it's Europe that our Chinese friends want the UK to be like)..you can see  how many modelled classes have been done and how popular they are.

I don't have any doubts that an 81 could sell and as the 84 is an NRM loco.. maybe that might hit the Locomotion list ?.. Heljan 86s are pretty rare.

 

but I do believe that classes 303, 304/5/8 would sell very well and some of the more modern 313/319/321 etc would find a place.

 

 

It is very pleasing to see more pre-grouping stock out there... maybe as they've announced LSWR and GW stock, we could move on to some nice L&Y coaches and perhaps some GNR / NER ones ?

 

To nit pick, I don't think either of the two recent announcements are pre-grouping. I wish they were.

[Ozexpatriate]

The full report is relatively upbeat ...

Certainly, it is the role of the CEO to express confidence in the company for the shareholders. Notwithstanding that, they have a lot to be justifiably pleased about. Returning to underlying profitability is an important milestone.

 

I'm not trying to be negative but balanced. They've made a lot of progress, but still have a long way to go. It's my impression that they were on the brink and I think they are in a stronger position now.

 

The 95p share offering is a creative move. It is not often done because it is dilutive to the existing shares and I think it is a measure of positive executive relationships with their large investors that they decided to do this.

 

I think it's a fair price. Net assets per share value were 81.1p so if the company is successful this should represent a good investment for investors.

[Graham Walters]

Apologies for going OT.

 

Hmmm - A GWR man ( I presume GWR, as that's the avatar) saying that all diesels look the same. Very much a case of the kettle calling the pot green  black.

I have enough trouble distinguishing between the various 4-6-0's of Swindon persuasion. King/Castle/Star/Saint/Grange/Hall/Manor/County - there may be others - just another same looking green loco to me. And don't even start on pannier tanks.

Quoting that the differences are noticeable by looking at names - ???? Just the same as noting that the differences are noticed by a different number. Evocative has nothing to do with it.

 

If you're not interested in diesels, then that's all you need to say.

 

Cheers,

Mick

 

Assuming I was talking just GWR is mistake, I was considering the variety of engines across  the big four, yes there are similarities in engines, but the variety across the big four was surely bigger than what we have now with diesels.

['CHARD]

Assuming I was talking just GWR is mistake, I was considering the variety of engines across  the big four, yes there are similarities in engines, but the variety across the big four was surely bigger than what we have now with diesels.

What we have NOW, undoubtedly.

 

But rewind to a random year like, just for the sake of argument, 1968, and just off the top of my head you could have seen twenty distinctly different main line diesel profiles.

[newbryford]

What we have NOW, undoubtedly.

 

But rewind to a random year like, just for the sake of argument, 1968, and just off the top of my head you could have seen twenty distinctly different main line diesel profiles.

 

Whereas there were three steam profiles -

1: chimney, boiler, wheels and tender

2: chimney, boiler, tanks, wheels and no tender EDIT 2 - see post#55 below

3: an A4.  Oops - Edit - no A4's on the mainline in 1968..........

 

 

Cheers,

Mick