Nile_Griffith Posted February 10, 2016 Share Posted February 10, 2016 So if we start saving now thats only £540 for each RMwebber, I'll get my cheque book Go on then! I'll buy a couple of shares. Link to post Share on other sites More sharing options...
The Black Hat Posted February 10, 2016 Share Posted February 10, 2016 I think part of the problem with Hornby has been the fact that sales like Black Friday, etc plus others have been a way to try and get people to buy directly merely to raise the balance sheet. It has however, changed the way in which some buy from them with some of us waiting to see what will be on sale. Its no surprise sales this year compared with last are well down as the post Christmas sale last year was much bigger and had many more items in the range reduced. This time round there was no where near as much for sale. The figures thus bare true relation of this, but the reasoning has not been correctly interpreted. Despite the fact that Hornby seems to be making significant progress with model railways, I can't help but feel that its largely other sectors that must be weighing the company down. I think Scale-extrix and airfix probably sholder more of this than model railways which does seem to be getting better products to market but also on a reliable time basis. The price of some of these might be high to begin with but both the company and retailers will be taking hits when they start to be reduced. I think we need to accept that part of the reason of low prices now is that stock is being shifted to generate income, whether that means a profit or loss for both Hornby and retailers seems to be what we need to find out for long term durability of the hobby. Link to post Share on other sites More sharing options...
DJM Dave Posted February 10, 2016 Share Posted February 10, 2016 Last thought...... Those of you who have sat there bored at my presentations, which, ironically included a Hornby Director at RMWeb live in Coventry last year ( he recorded it by the way but hasn't heeded the thoughts) I said this..... Sorry to paraphrase....... '' Anyone running a model railway company 'MUST' in my opinion, be a model railway enthusiast and have an interest in the hobby. Not as a business but as a pastime. Those who aren't modellers tend to be 9-5'ers and don't 'love' the hobby but see it from a bean counters point of view or as a view to just be short termist to get maximum profit from bonuses. This means that they don't move with the market quickly enough, ( new liveries etc) and as such, because modellers are transient in nature in their areas of modelling ( 1 day steam industrial, the next pre grouping the next ultra up to date modern) you miss the boat because your attention is drawn purely to the bottom line, not an amalgam of the bottom line and the hobby! If your not living model railways, you have no excuse for being in the business and shouldn't be.'' 8 Link to post Share on other sites More sharing options...
cary hill Posted February 10, 2016 Share Posted February 10, 2016 Currently being discussed on BBC 5 live after the 61% fall in the share price today. Link to post Share on other sites More sharing options...
Clearwater Posted February 10, 2016 Share Posted February 10, 2016 Currently being discussed on BBC 5 live after the 61% fall in the share price today. Plus articles on bbc website and guardian website. Given Hornby is a minnow of a company, this illustrates the potential value of the brand. DJM Dave makes a good point. I seem to recall that Jeremy Hosking was a major shareholder at one point. I'd wager that there was an element of sentimentality in that investment... Someone like him would be a good owner of Hornby from our perspective as users of their products David Link to post Share on other sites More sharing options...
KalKat Posted February 10, 2016 Share Posted February 10, 2016 Spotted this while looking through the news ........http://www.bbc.co.uk/news/business-35538800 Link to post Share on other sites More sharing options...
RMweb Premium PMP99 Posted February 10, 2016 RMweb Premium Share Posted February 10, 2016 I doubt this information is available, but it would be interesting to know the % turnover of the different aspects of Hornby's business. Additionally, within the model railway sector, I wonder how much the railroad/train set type area contibutes compared to the higher quality models that we buy/discuss on here? My guess, and it is only a guess, is that the former is quite significant. Link to post Share on other sites More sharing options...
Andy Y Posted February 10, 2016 Share Posted February 10, 2016 In a similar tone to Dave's earlier point and Clearwater's comments about a known entity I was discussing the other day about the merits of a business having a face or faces that customers can relate to and the affinity/loyalty that can bring if they are respected. Most of us know what that used to mean in the context of Hornby, I've always tempered any comment about the Red H with a caveat that there are some great people in the business who do care passionately about what they're producing and recent products bear testimony to that and they've achieved good work with The Engine Shed in that respect. However the leaders of such a business have to live it and breathe it if they expect that of their staff, comments to me from people within the business indicate that higher levels and newcomers have reportedly laughed at people stereotypically within the hobby. From a media perspective there's been several appointments that leave me scratching my head, people who do not understand the customer and relations with the media (unless they have a special relationship) and the bizarre decision to turn away free page space to showcase products; from a retail support perspective I've heard many tales of frustration (and they're not getting any less apart from odd examples) - many feel their biggest rival is their supplier. We've seen restructures and streamlining, cost reductions and better times forecast; we've also seen frantic attempts to get cash in the till and placating statements to investors but where has it got the business? Today's a sad day as it looks like they're on their knees begging for a banker's grace, (surely an oxymoron?). I'm as guilty as anyone for putting positive statements forward in analysis when they've had difficult years and I personally feel they've failed to repay that loan in the way they've not engaged with their customers, the media, or me. Sorting out the supply chain and producing good quality models is only part of the whole; what's the point of that if you've damaged a key aspect of survival, the brand? Today that brand isn't worth half what it was yesterday; we laughed at Tesco not being able to add up, we laughed at Ratner's inappropriateness but this isn't that far removed. There has been much talk in polite company over several months over what the future may hold for Hornby and I wouldn't be surprised to see the sale of portions of the empire to appease the lenders; if Hornby is to remain a British institution I think it will be downsized, maybe considerably, but would that be a bad thing? Maybe then I may buy a product without it sticking in my throat to do so. 11 Link to post Share on other sites More sharing options...
mow Posted February 10, 2016 Share Posted February 10, 2016 FT coverage. http://www.ft.com/cms/s/0/b8427dac-cfce-11e5-92a1-c5e23ef99c77.html#axzz3znH8aGun Link to post Share on other sites More sharing options...
RMweb Gold Metr0Land Posted February 10, 2016 RMweb Gold Share Posted February 10, 2016 Last thought...... Those of you who have sat there bored at my presentations, which, ironically included a Hornby Director at RMWeb live in Coventry last year ( he recorded it by the way but hasn't heeded the thoughts) I said this..... Sorry to paraphrase....... '' Anyone running a model railway company 'MUST' in my opinion, be a model railway enthusiast and have an interest in the hobby. Not as a business but as a pastime. Those who aren't modellers tend to be 9-5'ers and don't 'love' the hobby but see it from a bean counters point of view or as a view to just be short termist to get maximum profit from bonuses. This means that they don't move with the market quickly enough, ( new liveries etc) and as such, because modellers are transient in nature in their areas of modelling ( 1 day steam industrial, the next pre grouping the next ultra up to date modern) you miss the boat because your attention is drawn purely to the bottom line, not an amalgam of the bottom line and the hobby! If your not living model railways, you have no excuse for being in the business and shouldn't be.'' Indeed, you wouldn't expect to run a succesful fashion empire unless you had your eye on the market, AND could react quickly, AND had an eye on the bottom line as well - but these people seem to think that 'business acumen' is all you need in this market. Link to post Share on other sites More sharing options...
mow Posted February 10, 2016 Share Posted February 10, 2016 Before the calls for the nationalisation of Hornby plc, this wonderful coverage in The Daily Mirror highlights lazy journalism at its worst. http://www.mirror.co.uk/news/business/Hornby-hits-buffers-train-set-7346835 Must be 50 years since that Castle Class Third Rail Hornby Dublo model appeared in the shops. Link to post Share on other sites More sharing options...
MarkSG Posted February 10, 2016 Share Posted February 10, 2016 (edited) Meanwhile, James May has called for people to "buy a train set today" to "save Hornby": https://twitter.com/MrJamesMay/status/697382284731813888 http://www.theguardian.com/business/2016/feb/10/Hornby-warns-it-will-lose-6m-pounds-this-year Edited February 10, 2016 by MarkSG Link to post Share on other sites More sharing options...
RMweb Gold ruggedpeak Posted February 10, 2016 RMweb Gold Share Posted February 10, 2016 Maybe then I may buy a product without it sticking in my throat to do so. I think that is an excellent summary. I took my profit on the shares last year, missed the peak where it was over £1, but it was clear Xmas was going to be poor and the price would slide. I never expected it to go down this much however. On the loan, given the relatively small (to the bank) size of it, they have many options including simply shutting down the business and flogging off what it can. Don't assume they will spend any effort trying to keep it going if it will be time consuming or costly. I'd also point out that my impression is that in OO models (and they won't separate out the figures so we can't analyse in more detail) the retail trade is awash with non-moving stock. The fact that I could go online right now and spend thousands of pounds (may be tens of) on massively discounted OO locos, wagons and coaches indicates to me there is a major overstock problem. Not just Hornby, others still have huge amounts of non-moving stock in the trade, based on looking at retailers websites. At the end of last year I got my Xmas present of an Arriva 67, all the Arriva Mk3's and the DVT for half RRP, by taking advantage of Hornby bundles and retailers discounts. Brilliant for me but no way to run a business. All are quality products, but also having been burnt by their web exclusive limited editions, there is no reason for me to pay full price or even close to full price for anything unless it is truly exceptional. Have also bought 2 Hornby 31's (NR & DCR) since Xmas as both at large discounts (that it would have been rude not to buy). Why would I pay £130 or more for a model that if I sit tight for a few months I can probably pick up for under £100, possibly well under? The only thing I have or will pay full price for this year is likely to the LTS Class 66's, and the Dapol 68 if it comes out. Other than that I'll snap up bargains as they appear. I hope the retailers I am buying from are still making money, but you can't sustain a manufacturing business in a market awash with discounted stock. 1 Link to post Share on other sites More sharing options...
Mel_H Posted February 10, 2016 Author Share Posted February 10, 2016 Hornby PLC has 39,160,000 shares issued, each one of those is worth less than 40p currently. It is possible that the whole PLC could be bought for a little over £15M at todays prices. The brands alone are worth more than that. They closed down 60% at 31.5p per share today Link to post Share on other sites More sharing options...
dibber25 Posted February 10, 2016 Share Posted February 10, 2016 Wow, having just walked in the door being out of Internet connection since early today I've come across this...... Yikes. Doesn't anyone at margate / wherever it's based now, know that unleashing a shed load of product before Christmas at xxx prices to the trade, take a while to soak through, then if you combine it with a 5 week month (January) where most people have spent out for Christmas it's going to spell trouble. Couple this with losing sales longer term on new but duplicated items, Adams Radial for instance, cuts profit on your substantial investment. Losing models to third parties isn't going to help ( yup, guilty as charged m'lud), and this looks to be getting even worse for them this year as more 'bread and butter' models are getting picked up by smaller and not so small manufacturers. Selling the Crown Jewels in property is short term it's too, as once it's sold, great you have the money, but bad if you put it in the pot only to see it go completely due to 'inaccuracies' in your cash projections. The way stockings are treated, apparently, isn't good, with bad trade terms, then getting undercut by no stock being available to them but is for direct sales. As for direct sales, it's all well and good doing this as you make money in the short term, but in the long term ( if indeed the current people in charge are thinking that far ahead and not just looking at their shorter contracts and bonuses), you taint the pool and must either get rid of direct selling, or adopt it fully, and blow stockists out. Now, some of us manufacturers think differently and will support our lifeblood ( you the modeller and the stockists, such as Mike and Gareth) wherever possible. This is the only way, in my opinion, to be. Look after the stockist, give them a fair margin, and give them the stock to sell. Do this and simply put, you will thrive, do it the Kent way, and you'll nose dive as seen today. I'll be watching the share price though, with a view to becoming a part owner of that brand....... Mind you, if we all started a crowd source......... Worth remembering that in the last 2 years some manufacturers have fallen into the pay for goods up front with factories in China rather than the line of credit they have ( this has affected me too, to a degree) and it will hurt bigger players more who sell or expect to sell 4/5000 loco's at a time. Well put, Dave. I'm curious about the £1m write-off following stock taking. Does that mean - There's £1m of stock that's 'missing' or that there's a £1m of stock that they've decided they'll never sell (ie, someone found a ton of Olympic Games tat in the back of a cupboard)? Or is there another reason? Finally, I think Hornby needs friends at a time like this and it it has systematically trashed its relationship with its friends. (CJL) 1 Link to post Share on other sites More sharing options...
Republic of Ruislip Posted February 10, 2016 Share Posted February 10, 2016 Nice to see that some papers can still report properly, especially one that was once renowned for its typos. Really sad day for the model and hobby industry to see such headlines, it doesn't seem that long ago that Hornby under Frank Martin were the darlings of the City Pages. Let's hope that something positive can come out of this mess, not only for our hobby, but for all the staff at Hornby. Link to post Share on other sites More sharing options...
cary hill Posted February 10, 2016 Share Posted February 10, 2016 However the leaders of such a business have to live it and breathe it if they expect that of their staff, comments to me from people within the business indicate that higher levels and newcomers have reportedly laughed at people stereotypically within the hobby. Always a recipe for success when running a business - contempt for your employees, contempt for those involved in your distribution network and your end customers. Link to post Share on other sites More sharing options...
Mel_H Posted February 10, 2016 Author Share Posted February 10, 2016 Well put, Dave. I'm curious about the £1m write-off following stock taking. Does that mean - There's £1m of stock that's 'missing' or that there's a £1m of stock that they've decided they'll never sell (ie, someone found a ton of Olympic Games tat in the back of a cupboard)? Or is there another reason? Finally, I think Hornby needs friends at a time like this and it it has systematically trashed its relationship with its friends. (CJL) I can only quote from my experience, but a number of online purchase attempts have later been followed with an e-mail saying the items are out of stock. It seems that the stock just wasn't there, which I suspect is one of two reasons (or a combination). The stock on the shelves didn't match the computer system due to inputting errors when the new warehouse and system went live, or a stock take wasn't done when stock was transferred to the new warehouse. A third reason is that stock has been removed from the shelves (for example to satisfy a shop order) and the system has not been updated. I don't think it's damaged stock as that was sold off at the beginning of 2015. Link to post Share on other sites More sharing options...
RMweb Premium PMP99 Posted February 10, 2016 RMweb Premium Share Posted February 10, 2016 Sorting out the supply chain and producing good quality models is only part of the whole; what's the point of that if you've damaged a key aspect of survival, the brand? Today that brand isn't worth half what it was yesterday; we laughed at Tesco not being able to add up, we laughed at Ratner's inappropriateness but this isn't that far removed. There has been much talk in polite company over several months over what the future may hold for Hornby and I wouldn't be surprised to see the sale of portions of the empire to appease the lenders; if Hornby is to remain a British institution I think it will be downsized, maybe considerably, but would that be a bad thing? Andy makes some very valid points in his post above and clearly the brand has been seriously damaged from a financial perspective. However, I wonder if we have yet to reach the point where the brand is seriuosly damaged in the eye of the bulk of its customers, unlike Ratner's where people almost immediately stopped buying, and perhaps that holds out a little more hope. Unfortunately however, I suspect Andy is right that we are likely to see the company split up - the uncertainty will be who takes what and will some areas be lost completely? Link to post Share on other sites More sharing options...
Andy Y Posted February 10, 2016 Share Posted February 10, 2016 A third reason is that stock has been removed from the shelves (for example to satisfy a shop order) and the system has not been updated. I would suspect that is the fundamental reason; if goods have been shipped to shops and retailers didn't receive invoices for several months it's entirely reasonable to see stuff could fall down the back of the sofa. You either have stock or the payment for it, not both; and if you've got neither you've got a problem. Link to post Share on other sites More sharing options...
RMweb Gold ruggedpeak Posted February 10, 2016 RMweb Gold Share Posted February 10, 2016 Let's hope that something positive can come out of this mess, not only for our hobby, but for all the staff at Hornby. Yes, I think all our comments need to be tempered by the fact this is probably not nice for them. Ultimately we all want Hornby to survive, but there seems to be an urgent need to get rid of those who have consistently blundered. Hopefully the Board will be smart enough to get on with this and supporting the staff to deliver the Pecketts, the 71, the Caley 67 and all the great things for 2016. Alleged trendy social media offices in Shoreditch etc probably need getting rid of too IMHO - I don't believe tweets and Faceys or whatever you get on Facebook actually sell models. Link to post Share on other sites More sharing options...
macaroni1st Posted February 10, 2016 Share Posted February 10, 2016 Surely this has been coming. The leaving of Simon Kohler. The refusal to supply models to the magazines for review. The treatment of the retailers. The emphasis put on The Club and internet trading. Quite a lot of railway modellers are in later life but they have disposable income to purchase expensive models. However they are often great traditionalists and the internet may not be for them. I hope something can be done as Hornby is a great brand and have produced some great models. 2 Link to post Share on other sites More sharing options...
woodenhead Posted February 10, 2016 Share Posted February 10, 2016 Looking at other threads I think we can lay any dreams of N gauge or a return of TT to bed for the foreseeable future. It's sad that Hornby is lurching from one disaster to another, perhaps a break up and a reestablishment of a railway company, it can still include the Euro brands but get out of kits, paint and novelties. Link to post Share on other sites More sharing options...
Forester Posted February 10, 2016 Share Posted February 10, 2016 They closed down 60% at 31.5p per share today Worth pointing out that Barclays shares are also down 45% in the last six months and Barclays currently has extremely serious problems of its own putting its own independence at risk. Anyone believing Hornby's £9m debt is insignificant as far as Barclays is concerned should think again. Link to post Share on other sites More sharing options...
Mel_H Posted February 10, 2016 Author Share Posted February 10, 2016 (edited) Indeed, you wouldn't expect to run a succesful fashion empire unless you had your eye on the market, AND could react quickly, AND had an eye on the bottom line as well - but these people seem to think that 'business acumen' is all you need in this market. Certainly it's not easy and Hornby hasn't made all the right calls in terms of the subjects for its models; however even those very close to the market such as magazines also get it wrong occasionally and have to discount on relatively small limited editions (No names in particular, it afflicts them all from time to time). Also, the backdrop is a retail downturn at the moment across all sectors. Current info is that footfall to shops in general has been down significantly year-on-year since Christmas. Generally, results can lag behind the market and Hornby seems to be (on model railways) making up lost ground with new model production - which tends to drive sales. Oxford Rail is the only one making progress in this market, while Bachmann has slowed down it appears (any news on the re-tooled 158, announced exactly four years ago??). Perhaps the chaps at Barwell saw this coming earlier and managed to adjust their stock and production levels to meet demand? Edited February 10, 2016 by Mel_H 1 Link to post Share on other sites More sharing options...
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