Hornby's financial updates to the Stock Market

[JSpencer]

Indeed, but the problem is a lot of their good models that weren't being duplicated by other companies, such as the LNER 4-4-0s and 4-6-0s, Southern S15 & Class 67 amongst many others were also available at massive discounts indicating that over production was a significant issue for them.

 

In terms of duplication, I agree it doesn't help but at least in the case of the King it would seem Hornby were well advanced with their product when the rival was announced and their Class 71 beat the competition to market by a long time, duplication is an unavoidable risk of the model business and it is not really Hornby's fault if some of their projects were announced by others as well.

They have historically over produced or under produced and rarely got the figures right. Personally, I would give retailers say 6 months to get their orders in and build my production plans around that (with some exceptions such as railroad whereby you might expect to take 2 years to shift stuff as you will be making many more to get a cheaper price). Compound this to warehousing being outsourced - that certainly adds pressure to shift stuff quickly and panic sets in.

 

Things are made worse by offering too much at once for one region. SR and NE fans suddenly found themselves with several different new classes appearing in quick order, most, like myself kept our orders down to one of each class! Merchant navies have been something of exception to that probably because big colourful express locos sell.

 

Conversely, they have been slow to capitalise on the Pecketts success, a lone pure industrial ( the austerity exempt as many made it, one or another, into national service) was bound to be a winner.

 

There are signs they are learning though after deciding to up the production numbers of the Ivatt Duchess. That said they still do limited editions by the 1000, which is hardly limited in this day and age.

Edited April 16, 2017 by JSpencer

[RJS1977]

"The company needs to broaden its customer base and draw in a younger crowd, not narrow it to ageing miniature-train spotters,"

 

Couldn't have put that better myself!

[Nimbus]

"The company needs to broaden its customer base and draw in a younger crowd, not narrow it to ageing miniature-train spotters,"

 

Couldn't have put that better myself!

Surely you don't share his apparent ageist contempt for most of us here on RMweb?

 

The Nim.

Edited April 17, 2017 by Nimbus

[The Stationmaster]

"The company needs to broaden its customer base and draw in a younger crowd, not narrow it to ageing miniature-train spotters,"

 

Couldn't have put that better myself!

 

Although the strange thing is that every time it has tried to do that in the past decade it has finished up in a financial mess - very much like the situation Mr Anton is moaning about while proposing the same 'magic bullet' yet again.

 

Now he might well have different and well thought out alternatives to the previous magic bullets but he certainly hasn't offered anything beyond a load of semi-meaningless words (if press reports are accurate) with no indication whatsoever of how he would achieve what he says he would achieve.  Something of a hollow vessel in my view running a rather poor electioneering campaign which one hopes any responsible shareholder would see through.  As to the losses he seems to be harping on about 'lost shareholder value' rather than the actual losses incurred on the balance and surely any but the most naive of investors understands that share prices can go down as well as up and that after the Olympics fiasco, licence buying sprees and other mismanagement of the past it's hardly surprising the share price fell off the edge of the cliff - in fact the amazing thing would be if it hadn't done that.

 

So overall in my opinion the bloke seems to have all the attributes of a snake oil salesman with no more understanding of Hornby's business and recent history than many other people - the difference being that they are not putting themselves forward as a potential Chairman of the group.

[dibber25]

No one should hold the ageing 'miniature train-spotter' in contempt. We're the ones who have money to spend - now - on the models we want, but we aren't able to wait forever. Certainly, try to encourage younger modellers but you're talking young middle-aged, not kids. I reckon the market of electric trainsets for kids is pretty well dead. It enjoyed a revival of sorts with Thomas, but that was back in the 1980s. Model railways for kids haven't kept pace with the advances in electronics that have seen a host of developments in other toys. Movie franchises go to the likes of Lego now. Hornby had one shot at it with Toy Story and they blew their chance. If I was Hornby, I'd be pursuing the high-quality, high-end, high age, end of the market for all I was worth now, and make hay while the sun shines. Tomorrow is likely to be very bleak indeed. The way forward for the hobby now, is as a creative craft hobby that is a unique blend of art and engineering, for those for whom a computer screen is too virtual and is not reality enough. (CJL)

Edited April 17, 2017 by dibber25

[ruggedpeak]

Although the strange thing is that every time it has tried to do that in the past decade it has finished up in a financial mess - very much like the situation Mr Anton is moaning about while proposing the same 'magic bullet' yet again.

I'd question the sanity of anyone proposing to repeat the car crash of the last few years. Younger people and a more consumer orientated approach are precisely not where the market is, as the last managment regime proved comprehensively and beyond any reasonable doubt. If this Anton fella is spouting this sort of nonsense then I fear for the company and the progress it has made.

 

And that's the polite version!

[JeremyC]

I'd question the sanity of anyone proposing to repeat the car crash of the last few years. Younger people and a more consumer orientated approach are precisely not where the market is, as the last managment regime proved comprehensively and beyond any reasonable doubt. If this Anton fella is spouting this sort of nonsense then I fear for the company and the progress it has made.

 

And that's the polite version!

Isn't one of the definitions of insanity said to be doing the same thing over and over again and expecting different results? Like another commentator I wonder if the problem is really that the corporate structure of Hornby is no longer 'fit for purpose' for the business they're in.

[lochlongside]

Isn't one of the definitions of insanity said to be doing the same thing over and over again and expecting different results? Like another commentator I wonder if the problem is really that the corporate structure of Hornby is no longer 'fit for purpose' for the business they're in.

Sugar... you  took Einstein's quote out of my mouth !!

 

We have had not so good UK-made Hornby toy trains, cheaply made media toys, Olympic toys, and “Design clever”. None have proved to be a magic instant money spinner. Hornby have now over the last two years produced a range of high grade locos and coaches, and a few excellent wagons, cleaned up the majority of the 00 awards, and along the way drastically reduced their losses (from around £7M to £1M). That cannot be coincidence.

New Pistoia if I remember correctly significantly increased their holding of Hornby shares to 20% when the price crashed about a year ago, and they (and Mr Ruffer 3^rd largest holding around 11% and I believe a 4th person [Downing?] with around 6%) have now put Mr Anton in as consultant to review the situation with a view to improving the value of their holdings i.e. boost the share price and the overall shareholder return (which currently is zero.). Given the timescale of their investment it looks like, unlike Phoenix, that they are not long-haul investors.

It is not clear why they selected Mr Anton (his history IMHO is not what I would have looked for (just google Victoria carpets and Anton  – you will find online references juxtaposing his name with ousting directors, break-ups, director incentivisation schemes, boardroom bustups etc – and that was only one report in the Independent 2 Oct 2012), His ground breaking (!!) finding that Hornby should place more emphasis on the toy market to attract in younger customers and then retain them as a pipeline for the future (costs are such that younger enthusiasts must find it difficult)  is motherhood and apple-pie, and it is not clear what he really means to do.  I would assume from the remarks reported in the Daily Telegraph  11 Apr 2017 that he considers the hobbyist market as aging and that by his comments about toys, he could mean fewer Pecketts, and more Nellies; and possibly more contentiously for the future of Hornby,  that he is the person to lead this novel   approach.

(I could also be slightly witty at Mr Anton’s expense about not running ones trains in close contact with the carpet in case they get clogged up and stop working altogether but I won't ....oh b***** said it anyway !!).

If Hornby's fortunes really are turning round as the current Chairman/CEO believe then this move could be construed opportunism by Mr Anton; and if he is successful his quoted "toy market" comment would not fill me with optimism for the continuation of the higher grade products we have been recently getting, even if  he does improve the share price in the short run. I cannot see in his history the sort of passion for the business (dreadful phrase but....) that would continue the current improvements.

 

In response to your comment it is probably not Hornby's corporate structure that is unfit but the current dominance of a small number of powerful shareholders.   Methinks like Dibber25 that it is time buy while I can, and jack up the credit card limit now to make sure I get it all before the next car crash!!

Edited April 17, 2017 by lochlongside

[Mike Storey]

No one should hold the ageing 'miniature train-spotter' in contempt. We're the ones who have money to spend - now - on the models we want, but we aren't able to wait forever. Certainly, try to encourage younger modellers but you're talking young middle-aged, not kids. I reckon the market of electric trainsets for kids is pretty well dead. It enjoyed a revival of sorts with Thomas, but that was back in the 1980s. Model railways for kids haven't kept pace with the advances in electronics that have seen a host of developments in other toys. Movie franchises go to the likes of Lego now. Hornby had one shot at it with Toy Story and they blew their chance. If I was Hornby, I'd be pursuing the high-quality, high-end, high age, end of the market for all I was worth now, and make hay while the sun shines. Tomorrow is likely to be very bleak indeed. The way forward for the hobby now, is as a creative craft hobby that is a unique blend of art and engineering, for those for whom a computer screen is too virtual and is not reality enough. (CJL)

 

I understand your logic as regards the current cash-cow that is the mature enthusiast, but otherwise, I could not disagree more, in respect of a long term survival plan. All recent evidence shows a resurgence in craft hobbies for the young, away from the computer screen, although the latter remains the largest by far, but not growing any more, apparently. Lego, Marklin and others are showing how to do it, and are being very successful. Hornby just have to find the right combination of products. Their latest entrance (due soon, we are told) may well start to re-grow their market share, if it is the right product and marketing proves adept.

 

It is clear that demographics, house sizes and prices and real income non-growth, all herald a very difficult period for any inessential hobby expenditure, but despite the odds, whilst adults of any working age are tending to scrimp, they tend not to scrimp on their children (if surplus income is available). This has always been a middle to upper class dominated hobby, despite what we might like to think (and plenty on here will disagree with that), and the evidence shows that this part of the spectrum of potential buyers has not suffered as badly as those classed as JAM by the PM. Anecdotally. I know of six different families who have bought train sets for their youngish offspring in the past three years, purely to get them off their computers. None of them are JAM's to be sure, and two of the fathers are extreme petrol-heads with no interest in trains whatsoever. Four of these bought from Gaugemaster, at their prices!!! And queued for the privilege. In at least two cases (both extended family members), the interest has continued and Christmas and Birthday presents are easy to choose now. I know that two of the others have not forsaken their new hobby.

 

Your argument, much based on your clear experience and close knowledge of the industry, is however truly pessimistic and self-fulfilling, and resonates with the doomsayers of the past 40 years, which have not only been proving wrong, but wrong squared, given the advances in the hobby in the past 20 years at least. I remember an editorial in MRC several decades past which said much as you have - Make Hay while the Sun Shines. The hobby has lasted much longer than they did. Let's hope Hornby can emulate the nous of others and get themselves back to where they were, albeit with probably a smaller overall market than that of days yore, but a much more, potentially, profitable one, it would seem.

 

And, by way of post-script, Argos clearly disagrees with you too.

[JSpencer]

Heller in France often have stands at shows now giving away small cheap Arian models. My son picked one up and built his kit.

 

A lot of young do fantasy games like war hammer, many go on to grow and relive history. I myself do re-enacting in WWII and medieval, on 27th of may I will be putting sword fighting displays at Cergy Pontoise.

 

The point is, I meet people of all ages, fresh blood is coming in all the time even though there are no medieval shops or re-enacting shops locally.

Clubs and shows are a big key to bringing in new blood, Hornby can play a role there and need to focus on what can be given away and what can be done and sold cheaply.

Once in, the railroad range and other infrastructure exists.

I did not start medieval sword fighting until I was 43, new blood will come in from all ages not just the young.

 

Railways were fashionable once because you had record breakers and kids wanting to drive them. Those days are gone, but history, art and craft have a big appeal. Dressing up and living like the Middle Ages, is much more fun than any computer game. When I worked for the signal box, I learned quickly that you had 10 times more chance of selling something if you let them handle the object for real then any other type of sales technique combined.

I fondly remember now someone coming in for a tinlet of paint when we got talking about a £300 wrenn loco in the cabinet, I asked if he wanted a closer look, he did, from there on he was doomed... One £300 sale made out of a tin of paint!

[dibber25]

I understand your logic as regards the current cash-cow that is the mature enthusiast, but otherwise, I could not disagree more, in respect of a long term survival plan. All recent evidence shows a resurgence in craft hobbies for the young, away from the computer screen, although the latter remains the largest by far, but not growing any more, apparently. Lego, Marklin and others are showing how to do it, and are being very successful. Hornby just have to find the right combination of products. Their latest entrance (due soon, we are told) may well start to re-grow their market share, if it is the right product and marketing proves adept.

 

It is clear that demographics, house sizes and prices and real income non-growth, all herald a very difficult period for any inessential hobby expenditure, but despite the odds, whilst adults of any working age are tending to scrimp, they tend not to scrimp on their children (if surplus income is available). This has always been a middle to upper class dominated hobby, despite what we might like to think (and plenty on here will disagree with that), and the evidence shows that this part of the spectrum of potential buyers has not suffered as badly as those classed as JAM by the PM. Anecdotally. I know of six different families who have bought train sets for their youngish offspring in the past three years, purely to get them off their computers. None of them are JAM's to be sure, and two of the fathers are extreme petrol-heads with no interest in trains whatsoever. Four of these bought from Gaugemaster, at their prices!!! And queued for the privilege. In at least two cases (both extended family members), the interest has continued and Christmas and Birthday presents are easy to choose now. I know that two of the others have not forsaken their new hobby.

 

Your argument, much based on your clear experience and close knowledge of the industry, is however truly pessimistic and self-fulfilling, and resonates with the doomsayers of the past 40 years, which have not only been proving wrong, but wrong squared, given the advances in the hobby in the past 20 years at least. I remember an editorial in MRC several decades past which said much as you have - Make Hay while the Sun Shines. The hobby has lasted much longer than they did. Let's hope Hornby can emulate the nous of others and get themselves back to where they were, albeit with probably a smaller overall market than that of days yore, but a much more, potentially, profitable one, it would seem.

 

And, by way of post-script, Argos clearly disagrees with you too.

 

I take your point but I see very little that fills me with any kind of optimism. Fewer children - fewer families - coming to exhibitions. Nothing among my grandchildren to suggest that there will be any interest of their own once grandad's trains are gone. Whilst Argos might disagree (my recent shopping experiences there have not left me wanting to hurry back) I see nothing at ToysRus or Smyths that suggests they see railways as having any interest for kids at all. And these are the frontline in pitching to sell to kids/parents for kids. The real danger in the toy market is not so much the lack of interest among kids as the fact that the big names, Lego etc are so dominant that lesser players such as Hornby wouldn't get a look in, even if these stores stocked them. I remember an editorial in MRC back in the 1960s that said the hobby would die out with the end of steam. It shrunk but didn't die and it has enjoyed some modest revivals thanks to such things as Lima diesels and then to Chinese manufacturing. But we have some serious historic disadvantages which mitigate against British outline ready-to-run: We have a dominant scale which is at odds with the rest of the World, a demand for trains to negotiate impossibly tight tramway curves, a desire (among some/many?) to have every tiny detail correct on every individual member of every class and an exceptional degree of price sensivity. None of these things sits well with manufacturers, most of whom are now working across international markets where there's a high degree of compatibility, a greater willingness to except that some details or variations may need to be done by the modeler, and much less concern over prices.......and just ask Rapido about getting the APT-E and the GNR single round 18in radius curves! (CJL)

Edited April 18, 2017 by dibber25

[Legend]

Having "much less concern over prices" is going to do nothing to attract people to the hobby whether they are 5 , and their parents having to fork out, or 50 . This is already an expensive hobby , making it even more expensive does nothing for the generations whose disposable income will be less than their parents.

 

While I get the fact that there could be more and more accurate models priced appropriately e.g. The Rails/ Rapido Dyno car for limited numbers of modellers, that's not going to attract folk into the hobby . There absolutely needs to be reasonably priced models in the future,

Edited April 18, 2017 by Legend

[APOLLO]

There absolutely needs to be reasonably priced models in the future,

 

I agree and that is where Hornby's Railroad range comes in. Hornby do need to maximise on both the Railroad ranges and the "top end" stuff. They need a brand name for the top end stuff, perhaps have three ranges, Railroad, and (say) Silver Seal for the middle range and Gold Seal for the very detailed / expensive stuff. I think the Crosti should be in the middle "Silver Seal" range.

 

Anyway, good luck to Hornby. Your products are excellent, you just need good management and marketing.

 

Brit15

[adb968008]

Certainly, try to encourage younger modellers but you're talking young middle-aged, not kids. I reckon the market of electric trainsets for kids is pretty well dead. 

 

I'm a person in the point 1 bracket, my child in point 2.

 

Both I and my child agree, that the best toy / mode is one that  that has :

 

1. construction element,

2. an achievement element

3. recreational/creative element

 

is the best toy.. as you get 3 lots of bang for your buck.

 

Thats why Lego is doing so well... you build it, look at it, assemble it into the scenery (play/imagine with it).

 

Trainsets dont have any of this any more, yet the tech exists to do it easier now than ever.

 

If Hornby the focus shifted more to:

 

1. the scenery & stock, self assembled (pre-painted) with scenarios...

...a parcels office came with parcels.. and a parcels van to put the parcels in..

... a coach that can be assembled, with a removable roof to put passengers in..

... a ticket office with tickets, sound and microphone

 

2. The stock being more interactive, with a manageable self assembly element (not just a bag with the impossible bits to self attach), but Pre-printed/painted.

 

this is how lego moved from being a box with bricks in, to a 3D puzzle waiting to be built... it used to be called CKD, Kitmaster etc.. but the tech exists to make them easy and fun today, with super detail/pre-painted for all age groups. It could also contain VR / AR elements and apps which neednt be expensive and avoid a lot of the costs of DCC.

Scalextrix is part way down that road, and a lot cheaper.

 

Modellers have become lazy, the fun element is taking it from the box and putting it on the track, then putting it back in the box again.

This however will not wash with a Chinese labour force, making a mint from doing the work for us.

Edited April 18, 2017 by adb968008

[adb968008]

I take your point but I see very little that fills me with any kind of optimism. Fewer children - fewer families - coming to exhibitions. Nothing among my grandchildren to suggest that there will be any interest of their own once grandad's trains are gone. Whilst Argos might disagree (my recent shopping experiences there have not left me wanting to hurry back) I see nothing at ToysRus or Smyths that suggests they see railways as having any interest for kids at all. And these are the frontline in pitching to sell to kids/parents for kids. The real danger in the toy market is not so much the lack of interest among kids as the fact that the big names, Lego etc are so dominant that lesser players such as Hornby wouldn't get a look in, even if these stores stocked them. I remember an editorial in MRC back in the 1960s that said the hobby would die out with the end of steam. It shrunk but didn't die and it has enjoyed some modest revivals thanks to such things as Lima diesels and then to Chinese manufacturing. But we have some serious historic disadvantages which mitigate against British outline ready-to-run: We have a dominant scale which is at odds with the rest of the World, a demand for trains to negotiate impossibly tight tramway curves, a desire (among some/many?) to have every tiny detail correct on every individual member of every class and an exceptional degree of price sensivity. None of these things sits well with manufacturers, most of whom are now working across international markets where there's a high degree of compatibility, a greater willingness to except that some details or variations may need to be done by the modeler, and much less concern over prices.......and just ask Rapido about getting the APT-E and the GNR single round 18in radius curves! (CJL)

 

 

It feels like a  speech as an adult not as a kid. To me, thats the crux of the problem..

To appeal to kids, its got to be a kids toy. Kids really dont care about Scale, Curves, Detail or Price.

 

Kids want trains they can assemble, that look like their ride to school and recreate the drama they see each day, including their station, cars, passengers, shops, buses plus an element of entertainment drama.. Police/Fire/Action... did you ever crash or race a train as a kid ?

 

Lego brings movies to life, even all the non-Hornby Thomas the tank ranges do.. I really have a hard time imagining Thomas the tank engine being in a shark attack.. but my daughter doesnt.. and that costs £30-40 for that 20 minutes of fun.. and unfortunately after that 20 minutes.. well the shark can only attack so many times.

 

A railroad B17 with loco drive doesnt do anything for a kid, neither does an unrebuilt super detail merchant navy, but a budget tender drive WC with a train load of crystal palace supporters going to a match might resonate with slightly more, especially if both teams unpainted players were ready to be painted/have stickers stuck on and placed in the train and a green mat with a small ball to play on... whilst that 2016 event was a niche one off, I suspect more than a railroad B17, especially if the prototype theme was adopted a bit more. Laugh as you might, but a Southern Railway strike set would also have some kids appeal.... Thats why Tornado did so well.

A Layout series representing a short preserved railway with a mixed collection of preserved stock... a container trains with cargo to go inside..a tanker that holds water, a coal wagon that can be emptied or even an EMU with a mechanism that can open the sliding doors...

 

in my mind Railroad is too detailed and too bespoke.. it should have stayed tender drive, moulded hand rails, (but maybe with a stock chassis and can motor), and should focus more on the railway environment of today ( preserved and modern mainline)... that should make manufacturers happy too.. 2 chassis fits all, steam, diesel and electric as it used to be... and let the kids do more of the assembly... thats one area of the UK economy which is cheaper per hour than China, it teaches & entertains them too.

 

 

 

 

working across international markets where there's a high degree of compatibility,

NMRA and NEM really dont sit well together... even Hornby's USA release S100 and European S100's have considerably different toolings, that goes beyond just a coupling... I found out the hardway !

 

But when it comes to running on the same track, Ive successfully  run US/European and UK stock on the same layout both with their respective stock, both when I lived in the US (MRC Controller /110v down to 12v DC with Atlas track) and the UK.. coupling compatibility being the biggest issue, Ive generally found US stock is plain inefficient when it comes to power consumption, Europe stock but much smoother, but more standardised in mechanisms... but when it's made in china,...well it's made in china and an 8BA and a can motor is pretty much stock for everyone.. HO & OO.

 

Glass half full or half empty

 

If the future of UK modelling is just to give up an die... then what does puzzle me.. is how PIKO came from being the worst of Eastern European, to having some scale quality models that beat UK models in detail, and yet serve a market who's disposable income is 1/5th the UKs, is not particularly familiar with model rails .. and are able to successfully produce these models cheaper than our UK models and in less quantities.. so successfully cultivating that market that they have sold out on several limited releases and expanded the range to over 7 different toolings.... Piko's Expert range (SU45/SP42/CHME3/EU06/7/ET22 and Twin EU07) PKP range is envious to look at.. and er..I understand they manfacturer 00 gauge models for more than 1 UK supplier.

 

Yes it is twin motored and those pantographs aren't Plastic.. and it costs only a few £ more than the new class 87.

http://www.dcc24.eu/sites/default/files/images/Piko%2096363%20Lokomotywa%20towarowa%20elektryczna%20ET41-152%20PKP%2018.jpg

 

The EU07 etc all cost c£100, some less and thats RRP.. so some continental models are both newer, more detailed, cheaper and higher quality than the UK, in some parts of Europe and work on our curves too.

 

 

Thats just my opinion anyway.

Edited April 18, 2017 by adb968008

[ruggedpeak]

What I fear is the t-shirts and playing cards and spin off nonsense, flogging the "brand" to within an inch of its life. I was there when Lego decided back in the early 2000's to become the biggest toy company on the planet by doing everything from software to clothing. Anton needs to clarify what he means, as Lego nearly went bust not so long ago, and only came back when it stuck to what it was good at....

 

http://knowledge.wharton.upenn.edu/article/innovation-almost-bankrupted-lego-until-it-rebuilt-with-a-better-blueprint/

 

Indeed there are whole books on it. Bottom line, stick to what you are good at and what you are known for, do it really well and evolve (e.g. Lego licensing of brands like Batman etc). Hornby has been through this cycle once, it needs some stability to rebuild.

Edited April 18, 2017 by ruggedpeak

[Mike Storey]

I take your point but I see very little that fills me with any kind of optimism. Fewer children - fewer families - coming to exhibitions. Nothing among my grandchildren to suggest that there will be any interest of their own once grandad's trains are gone. Whilst Argos might disagree (my recent shopping experiences there have not left me wanting to hurry back) I see nothing at ToysRus or Smyths that suggests they see railways as having any interest for kids at all. And these are the frontline in pitching to sell to kids/parents for kids. The real danger in the toy market is not so much the lack of interest among kids as the fact that the big names, Lego etc are so dominant that lesser players such as Hornby wouldn't get a look in, even if these stores stocked them. I remember an editorial in MRC back in the 1960s that said the hobby would die out with the end of steam. It shrunk but didn't die and it has enjoyed some modest revivals thanks to such things as Lima diesels and then to Chinese manufacturing. But we have some serious historic disadvantages which mitigate against British outline ready-to-run: We have a dominant scale which is at odds with the rest of the World, a demand for trains to negotiate impossibly tight tramway curves, a desire (among some/many?) to have every tiny detail correct on every individual member of every class and an exceptional degree of price sensivity. None of these things sits well with manufacturers, most of whom are now working across international markets where there's a high degree of compatibility, a greater willingness to except that some details or variations may need to be done by the modeler, and much less concern over prices.......and just ask Rapido about getting the APT-E and the GNR single round 18in radius curves! (CJL)

 

We agree on the need for improved marketing through better retailer presence, but the Argos example was pointed - as exampled further above - Hornby will be in multiple Sainsbury stores over the next five years. Likewise Hobbycraft have retained Hornby items, albeit you have to hunt to find them. Toys-R-Incredibly-Expensive-With-Us, and little old Smyths, have a bizarre marketing model, and even when they did stock railways, I never bought from them, at those prices. In fact I have almost never bought from them, and I don't know why anyone does for anything.

 

But where we differ widely is the historic disadvantages - if that is so, why is the UK market still so much larger than that of all other European markets, bar Germany? Why have there been at least three major new entrants to the UK (Dapol, Heljan and now Rapido) over the past decade or so, not to mention the increasing number of commissioners, and bi-mode players such as DJ Models? There is clearly optimism within the industry, albeit these are for the scale modeller, but they need the Hornby brand to drive the next set of customers. You will be hard put to identify more than a tiny handful like this right across Europe. Marklin are showing how to begin to combat Lego, so let's hope Hornby can do the same. Bachmann are having a stab, but don't have the brand name recognition or range of outlets. So don't despair with your grandchildren! It may yet happen, even if with just one....

[jjb1970]

If the future of UK modelling is just to give up an die... then what does puzzle me.. is how PIKO came from being the worst of Eastern European, to having some scale quality models that beat UK models in detail, and yet serve a market who's disposable income is 1/5th the UKs, is not particularly familiar with model rails .. and are able to successfully produce these models cheaper than our UK models and in less quantities.. so successfully cultivating that market that they have sold out on several limited releases and expanded the range to over 7 different toolings.... Piko's Expert range (SU45/SP42/CHME3/EU06/7/ET22 and Twin EU07) PKP range is envious to look at.. and er.. they manfacturer 00 gauge models for more than 1 UK supplier.

 

Yes it is twin motored and those pantographs aren't Plastic.. and it costs only a few £ more than the new class 87.

http://www.dcc24.eu/sites/default/files/images/Piko%2096363%20Lokomotywa%20towarowa%20elektryczna%20ET41-152%20PKP%2018.jpg

 

There EU07 etc all cost c£100, some less and thats RRP.. so some continental models are both newer, more detailed, cheaper and higher quality than the UK in some parts of Europe now and work on our curves too.

 

 

 

I have been very impressed with the two Piko Expert models I have, a Br103 and an Italian Vectron. Both are nicely detailed and finished and run superbly. However I think I may take a different lesson from Piko. They have demonstrated how it is possible to split a range into three parts - Expert, Hobby & Classic. They also illustrate how design clever could have worked. Their Expert series which are aimed at the higher end of the market balance separate details and moulded details and are well designed so as to maximise the models impact while keeping manufacturing complexity and cost sensible. For example they tend to use moulded on wipers, lack the buffer beam detail of rivals and use more moulded detail. For all that they capture the look of the prototype superbly, are keenly priced and are great operator models which have been very well received in a market which values high levels of detail and appears to be more willing to spend money for the right product than the OO market. I think there is a market for good scale models that opt out of the arms race of ever more extreme separate details etc provided it is done well and offers value for money and not in the cack handed way tried by Hornby (in fairness the SR EMUs worked well). The Hobby range also indicates that in Germany too there is a ready market for the equivalent of the newer, better Railroad models, good scale models for the price conscious with the Classic range there.

The company that has really impressed me over recent months is LE Models, their ETR220 series EMUs and tri-bo electric models are beautifully done (as good as anything I've seen in HO) and yet very keenly priced given the extremely high levels of detail, great finish and running qualities.

[RJS1977]

I agree and that is where Hornby's Railroad range comes in. Hornby do need to maximise on both the Railroad ranges and the "top end" stuff. They need a brand name for the top end stuff, perhaps have three ranges, Railroad, and (say) Silver Seal for the middle range and Gold Seal for the very detailed / expensive stuff. I think the Crosti should be in the middle "Silver Seal" range.

 

Anyway, good luck to Hornby. Your products are excellent, you just need good management and marketing.

 

Brit15

 

Trouble is, the Railroad Range currently seems to be aimed at the 50-somethings. The current list of locos on the Hornby website (none listed as currently in stock, which I think shows how half-hearted Hornby's commitment to Railroad is) are:

 

* Coal merchant's 0-4-0

* BR blue class 20

* County 4-6-0

* BR green Class 73

* LMS liveried Jinty

* BR green Class 31

* Railfreight Class 37

* BR Schools

* Inter City Class 90

* LNER B17

* BR black 5

* Crosti 9F

* BR blue Deltic

* GWR 14XX

 

How many of these are likely to have been seen by someone under 20 years old? Probably the Jinty, Black 5, 14XX (at preserved lines) and possibly the Deltic.

[gc4946]

I think the Railroad range should be differentiated more clearly:

 

Products:

 

- all ex-Margate, ex-Airfix/Dapol and ex-Lima ranges to be classified as Railroad products, with additions as specifically commissioned, e.g. class 395 Javelin, P2 and Tornado 

- key steam locos such as Flying Scotsman, Mallard and Tornado available at all times

- contemporary liveries of stock based on Railroad model tooling available during the company's franchise period

e.g. Scotrail, East Midlands Trains and Northern 156s, Virgin East Coast 91s and Mk4s, classes 66 and 92

 

In promotional literature:

 

- separate reference numbering sequence e.g. RD rather than R

- print catalogue version pages differentiated as such and grouped together (as well as online)

 

 

 

[adb968008]

Trouble is, the Railroad Range currently seems to be aimed at the 50-somethings. The current list of locos on the Hornby website (none listed as currently in stock, which I think shows how half-hearted Hornby's commitment to Railroad is) are:

 

* Coal merchant's 0-4-0

* BR blue class 20

* County 4-6-0

* BR green Class 73

* LMS liveried Jinty

* BR green Class 31

* Railfreight Class 37

* BR Schools

* Inter City Class 90

* LNER B17

* BR black 5

* Crosti 9F

* BR blue Deltic

* GWR 14XX

 

How many of these are likely to have been seen by someone under 20 years old? Probably the Jinty, Black 5, 14XX (at preserved lines) and possibly the Deltic.

 

Absolutely spot on.

 

 

In my mind the railroad range should be full of either preserved, or current mainline, and if done wisely, one could be an advert for the other.

At the same time it should be more simplified, but instantly recognisable..its a toy at a toy market... like all toys it's destination is the bin... after all thats where most of the non-Hornby Thomas's  and all last christmas's fads end up...

 

Lima was massively popular in the 90's as for the most part it was a 3 piece moulding (body/windows/chassis).. but with a decent paint job... that could be factory assembled in minutes, and cost a teenagers weekend pocket money, and usually advertised on the back cover of Rail Magazine, reflecting what was on the front cover 4 weeks earlier... Today that same market is 30 years older, buying into the super detailed options offered by Bachmann.. With age, Quality replaced Quantity.

The railway isnt the same today and neither was Lima's quantity strategy a good one, but a range reflective of todays railways at a cheap / detail compromised price, with decent paint job..

 

Today there's a hole at the bottom of the market for the kids with an assumption that catering at the higher end will reap grander rewards, when sale after sale suggests maybe that wasnt the case, at least at the demand anticipated.  To be fair, it looks like the top end is becoming more balanced, but a strategy at the less discerning younger modeller is needed, but just churning out 70's old guff isnt it.

 

Don't forget the shop keepers skill to sell it, at Hamleys last weeks the 20 something sales guys was at a loss at what was what, he doesnt know his LSWR coaches dont go with a D49 as he's never seen either, I can't imagine too many fathers buying 3x £40 coaches for their child... nice display, well stocked but without a clear target buyer. Scalextrix is much simpler... two cars on a track and race.. theres a reason to see why it's not a super detailed Scammell tractor racing a budget range London bus.

 

At risk of going on i'll knock it off, as whilst posting here is one thing, unfortunately it's not going to the Marketing or R&D office doors and I'm sure they know better anyway. Lets see what the shareholders say.

Edited April 18, 2017 by adb968008

[Caledonian]

Speaking as the father of two boys aged 18 and 12 respectively, I have to relate that the first played trains for a while [and indeed was my excuse for getting into the hobby] but has since moved on. The second likewise did so for a while but hasn't for some time. The pretty coloured lights on the various screens took their toll on both, but yet both are very creative and even the older one still plays with Lego.

 

The problem with railways appears to be its limiting nature.

 

Although neither was involved with the Toy Story fiasco the problem there was its lack of imagination. It was a Wild West train with a couple of Toy Story characters - novelty fades very quickly indeed.

 

Proper trains: much better. Lot of scope for loading/unloading wagons and moving stuff [including that blue police box] around, but its either operated on a fixed layout which is boring after a while, or assembling track takes too long. 

 

There's probably more to it than that, but I do want to stress that this isn't a theory or an opinion but experience. Rare [and often very talented] individuals aside, railway modelling isn't a kids hobby, there are far too many other attractions out there

[Mel_H]

Needs a subscription - could you please paraphrase? Is this any more than previous reports regarding their second largest shareholder a few days ago?

 

Google happily supplies the whole article - it's in a 'Thomas' style; clearly, they'd been to the pub... And PA photos still seems to have only one picture of a 'toy train' (The old Cl 29, with an hand) that gets rolled out everytime there's a press article, as it does in this case.

 

But That's not a surprise. On Hornby's website, there's just an email address/phone number for Hornby's PR firm.

 

Most half-decent firms have 'ready to use' hi-res pictures available to download from the corporate part of their website. These days, journalists and picture desks in a hurry want to choose and use photos in an instant.

 

Anyway, whinge over, here's the FT story (16 April), in full, below:

 

Investor builds up head of steam over Hornby

 

Thomas the Tank Engine maker needs to avoid trainspotters’ siding, says critic

 

Patience is a virtue on the Island of Sodor, toy train land and home to Thomas the Tank Engine.

 

There, “the really useful crew” whistle in harmony, buffer, share, peep and puff along together. Pushy interlopers almost always get their comeuppance.

Life is not so wholesome elsewhere in toy train land.

 

Last week, the chairman of Hornby, which makes Thomas and his friends as well as Scalextric and Corgi cars, was relegated to the really useless crew by one critic.

Alexander Anton, non-executive director of rugmaker Victoria, who also manages legacy property portfolios, proposes to shunt Roger Canham, chairman for the past five years, off the board.

 

Mr Anton is coupled to New Pistoia Income, a mysterious fund that owns about 20 per cent of Hornby, making it the Kent model maker’s second-largest investor after Phoenix Asset Management.

 

New Pistoia and Mr Anton have, it seems, become impatient with Mr Canham over Hornby’s wheezing progress towards recovery. Mr Anton says the company has lost more than £30m of shareholders’ money in five years and is on track to lose more.

 

That may be a bit hard on Mr Canham, an “iron man” triathlete. Hornby’s wheels were wobbling and its axles aching when he joined the board in 2012.

 

The legacy of overstocking memorabilia for the 2012 Olympics and multiple problems with supplies in China have chugged on.

Still, the group came close to breaching banking covenants last year and lost its second chief executive in four years. The shares at 33p are a third of what they were in mid-2015.

However, on April 7, Hornby puffed out a statement claiming that it might soon crest the hill. The group still made a loss in the year to March.

 

Nonetheless, after finding that half its product range earned more than 90 per cent of profits, it has stopped producing quite so many thousands of toys and is focusing on the most profitable lines.

That sounds sensible. Better late than never.

 

The old Margate factory site has also been sold and Hornby has stopped undercutting the retailers who specialise in selling its model planes, trains and automobiles to diehard die-cast buffs.

 

The debt that threatened to derail Hornby a year or so ago is being whittled away. Instead of £7m net debt last year, Hornby has more than £1m net cash, whistled Hornby’s newish chief executive, Steve Cooke. The shares accelerated 10 per cent.

 

Not good enough, wheeshes sleek and silvery Mr Anton.

 

The strategy is wrong. The company needs to broaden its customer base and draw in a younger crowd, not narrow it to ageing miniature-train spotters, he told journalists last week.

 

Mr Anton has expressed concerns about Hornby’s governance, too. He thinks Phoenix, which is chaired by Mr Canham and owns 34 per cent of Hornby, exerts too much control.

 

This “is not in accordance with principles of good corporate governance and therefore is not in the best interests of the wider shareholder base”, says Mr Anton.

 

This is the man who in 2012 was part of an ill-tempered board spat at Victoria, then the Anton family business, which resulted in him being made a non-executive director, with Geoffrey Wilding, a Kiwi private equity veteran, becoming executive chairman.

 

Mr Anton, still a close associate of Mr Wilding, was on the board that two years later sanctioned a complex incentive plan involving derivatives that allowed the New Zealander to take close to half the carpet company as a reward for beating performance hurdles.

 

Mr Wilding has since reduced his holding to about 33 per cent — about the same size as Phoenix Asset Management’s stake in Hornby.

 

The taciturn Mr Canham’s record is not gilt-edged. He is not much given to chuffing cheerfully and it is by no means full steam ahead for Hornby.

 

If this were Sodor, Sir Topham Hatt, the fat controller, would urge him to learn his lessons but would keep him in the yard. Mr Canham’s tenure at Hornby is less secure.

 

His chairmanship of Phoenix does not assure his position.

 

A year ago, Mr Canham was shunted as chairman of CPP, the insurer, even though Phoenix was the York group’s second-biggest investor.

 

Nonetheless, shareholders in Hornby should take their time and think carefully about whether the model engine maker’s chairman should be displaced now and, if so, who should replace him.

Edited April 18, 2017 by Mel_H

[Mel_H]

It feels like a  speech as an adult not as a kid. To me, thats the crux of the problem..

To appeal to kids, its got to be a kids toy. Kids really dont care about Scale, Curves, Detail or Price.

 

Kids want trains they can assemble, that look like their ride to school and recreate the drama they see each day, including their station, cars, passengers, shops, buses plus an element of entertainment drama.. Police/Fire/Action... did you ever crash or race a train as a kid ?

 

Lego brings movies to life, even all the non-Hornby Thomas the tank ranges do.. I really have a hard time imagining Thomas the tank engine being in a shark attack.. but my daughter doesnt.. and that costs £30-40 for that 20 minutes of fun.. and unfortunately after that 20 minutes.. well the shark can only attack so many times.

 

A railroad B17 with loco drive doesnt do anything for a kid, neither does an unrebuilt super detail merchant navy, but a budget tender drive WC with a train load of crystal palace supporters going to a match might resonate with slightly more, especially if both teams unpainted players were ready to be painted/have stickers stuck on and placed in the train and a green mat with a small ball to play on... whilst that 2016 event was a niche one off, I suspect more than a railroad B17, especially if the prototype theme was adopted a bit more. Laugh as you might, but a Southern Railway strike set would also have some kids appeal.... Thats why Tornado did so well.

A Layout series representing a short preserved railway with a mixed collection of preserved stock... a container trains with cargo to go inside..a tanker that holds water, a coal wagon that can be emptied or even an EMU with a mechanism that can open the sliding doors...

 

in my mind Railroad is too detailed and too bespoke.. it should have stayed tender drive, moulded hand rails, (but maybe with a stock chassis and can motor), and should focus more on the railway environment of today ( preserved and modern mainline)... that should make manufacturers happy too.. 2 chassis fits all, steam, diesel and electric as it used to be... and let the kids do more of the assembly... thats one area of the UK economy which is cheaper per hour than China, it teaches & entertains them too.

 

 

NMRA and NEM really dont sit well together... even Hornby's USA release S100 and European S100's have considerably different toolings, that goes beyond just a coupling... I found out the hardway !

 

But when it comes to running on the same track, Ive successfully  run US/European and UK stock on the same layout both with their respective stock, both when I lived in the US (MRC Controller /110v down to 12v DC with Atlas track) and the UK.. coupling compatibility being the biggest issue, Ive generally found US stock is plain inefficient when it comes to power consumption, Europe stock but much smoother, but more standardised in mechanisms... but when it's made in china,...well it's made in china and an 8BA and a can motor is pretty much stock for everyone.. HO & OO.

 

Glass half full or half empty

 

If the future of UK modelling is just to give up an die... then what does puzzle me.. is how PIKO came from being the worst of Eastern European, to having some scale quality models that beat UK models in detail, and yet serve a market who's disposable income is 1/5th the UKs, is not particularly familiar with model rails .. and are able to successfully produce these models cheaper than our UK models and in less quantities.. so successfully cultivating that market that they have sold out on several limited releases and expanded the range to over 7 different toolings.... Piko's Expert range (SU45/SP42/CHME3/EU06/7/ET22 and Twin EU07) PKP range is envious to look at.. and er..I understand they manfacturer 00 gauge models for more than 1 UK supplier.

 

Yes it is twin motored and those pantographs aren't Plastic.. and it costs only a few £ more than the new class 87.

http://www.dcc24.eu/sites/default/files/images/Piko%2096363%20Lokomotywa%20towarowa%20elektryczna%20ET41-152%20PKP%2018.jpg

 

The EU07 etc all cost c£100, some less and thats RRP.. so some continental models are both newer, more detailed, cheaper and higher quality than the UK, in some parts of Europe and work on our curves too.

 

 

Thats just my opinion anyway.

 

I too am very happy with my EU07, and the Rivarossi double decker coaches I bought to go with (yes, I know it's not that prototypical, but it's my layout etc...)

[Mel_H]

Absolutely spot on.

 

 

In my mind the railroad range should be full of either preserved, or current mainline, and if done wisely, one could be an advert for the other.

At the same time it should be more simplified, but instantly recognisable..its a toy at a toy market... like all toys it's destination is the bin... after all thats where most of the non-Hornby Thomas's  and all last christmas's fads end up...

 

Lima was massively popular in the 90's as for the most part it was a 3 piece moulding (body/windows/chassis).. but with a decent paint job... that could be factory assembled in minutes, and cost a teenagers weekend pocket money, and usually advertised on the back cover of Rail Magazine, reflecting what was on the front cover 4 weeks earlier... Today that same market is 30 years older, buying into the super detailed options offered by Bachmann.. With age, Quality replaced Quantity.

The railway isnt the same today and neither was Lima's quantity strategy a good one, but a range reflective of todays railways at a cheap / detail compromised price, with decent paint job..

 

Today there's a hole at the bottom of the market for the kids with an assumption that catering at the higher end will reap grander rewards, when sale after sale suggests maybe that wasnt the case, at least at the demand anticipated.  To be fair, it looks like the top end is becoming more balanced, but a strategy at the less discerning younger modeller is needed, but just churning out 70's old guff isnt it.

 

Don't forget the shop keepers skill to sell it, at Hamleys last weeks the 20 something sales guys was at a loss at what was what, he doesnt know his LSWR coaches dont go with a D49 as he's never seen either, I can't imagine too many fathers buying 3x £40 coaches for their child... nice display, well stocked but without a clear target buyer. Scalextrix is much simpler... two cars on a track and race.. theres a reason to see why it's not a super detailed Scammell tractor racing a budget range London bus.

 

At risk of going on i'll knock it off, as whilst posting here is one thing, unfortunately it's not going to the Marketing or R&D office doors and I'm sure they know better anyway. Lets see what the shareholders say.

 

I agree - spot on. When younger, my son wanted to buy what he could see running on the network - all very colourful too. Detail was not key, but good running and reliable couplings were. When I'm at Model Rail shows, the conversations I overhear seem to suggest that little has changed in this regard. The biggest snag is that back in the day of Lima, 47s were plentiful in real life. Now they are not, and it's units that are. For this, I don't have an answer...

Edited May 11, 2017 by Mel_H