changes to Hornby 2016 range

[John M Upton]

We now seem to have reached a stage where in addition to the annual Hornby new products announcement (in which it is usually stated that everything announced will be released that year) we also can pencil in the annual announcement that a large chunk of the range announced for this year won't be coming this year after all or indeed at all.

 

How on Earth can a business run like this?

[Fenman]

We now seem to have reached a stage where in addition to the annual Hornby new products announcement (in which it is usually stated that everything announced will be released that year) we also can pencil in the annual announcement that a large chunk of the range announced for this year won't be coming this year after all or indeed at all.

 

How on Earth can a business run like this?

I'm not sure it's any worse than Bachmann announcing stuff but then, 4 or 5 years later, admitting much of it hasn't even left the design studio, let alone got close to production.

 

Even Hornby is, relatively speaking, more a cottage industry than a mega-corp. Their supply lines are long and complicated and, as a relative minnow, the leverage they have over their suppliers will be modest. And their complicated finances hem them in.

 

Paul

[rovex]

Perhaps after the frothing thread we have every year we could start a thread speculating on which models will be cancelled or delayed

[Godfrey Glyn]

We now seem to have reached a stage where in addition to the annual Hornby new products announcement (in which it is usually stated that everything announced will be released that year) we also can pencil in the annual announcement that a large chunk of the range announced for this year won't be coming this year after all or indeed at all.

 

How on Earth can a business run like this?

 

It may be more an outcome of where the company is at present and in the light of the very significant uncertainty that lies ahead with any currency fluctuations that may result from the June referendum. I suspect that we are seeing a business that must demonstrate utmost prudence to its bankers. I gather from a friend that works in a bank that they are expecting a lot of turbulence in the exchange rate if the country votes to leave the EU with a significant fall in the value of the pound. That might help our exports in the short term but its going to hit our model railway companies big time. Given that it is very difficult to guess the result of the vote and then the subsequent drop in the pound I suspect none of us would rush to order the manufacture of the models that will need to be paid in a foreign currency later in the year - unless of course money is freely available.

Happy days!

all the very best

Godfrey

[JSpencer]

We now seem to have reached a stage where in addition to the annual Hornby new products announcement (in which it is usually stated that everything announced will be released that year) we also can pencil in the annual announcement that a large chunk of the range announced for this year won't be coming this year after all or indeed at all.

 

How on Earth can a business run like this?

 

Hornby's market is actually quite Niche. There are some 70 million people in the UK but probably no more than 50000 railway modelers stretched across many scales, all on various budgets. When you look sales of model railways in the early 70s and compare it to now, models sold in the 10s of thousands each year. They could repeat the same model year in and year out with the same running number.

Those models were in essence toy trains by modern standards but would have no chance in a toy market today. Then in the late 70s, early 80s, model railways crashed badly. Looking at the published production figures for Wrenn (back then a niche player), it really did crash. Overnight numbers of models sold slumped to somewhere like 10% of what they were before. Trains had become boring...

 

The 80s were really the struggling years. Fighting to keep a spot in the toy market and trying to please the fine scale modeler. It was a loose/loose situation. Companies went to the wall, RIKO was stuck with lots of Lima and forced to sell it off cheap over a few years and so on....

 

Then Replica, Dapol and Bachmann arrived, set up smaller runs with new models giving choices in running numbers and liveries. These pleased more discerning modelers and they avoided the toy market completely. Hornby struggled in the 90s until in moved to china and followed the super detailed crowd.

We then hit the boom decade. Lots of new models, highly detailed in plenty of colours for cheap price.

 

Now the price has exploded....

 

Today, when looking at the wish list survey, despite the broad lengths that are done to hit a large audience, the number of replies is barely 2000. The max number for any item barely 400. At the same time they might get several requests for a particular model, but it is several requests.

What does this mean?

A manufacturer clearly does not have enough replies in the survey to be absolutely sure that what they make will actually sell. They would need 2000 requests/wish list replies for that. So the choice, propose nothing (death assured) or propose something based on the requests/surveys and see what orders come in.

 

A company like Hornby will need to produce and - more importantly - sell a certain amount of stock in a year to pay off the loans and keep some 250 people employed.

Doubtless the program they announce is based on overachieving the target revenue needed to run the company.

However if orders are not there, then producing the items will tie up money (which is very short right now) and even loose the company money. So cancellations and postponement are the only viable course.

This is not the end of it, if too much is postponed/cancelled, the target revenues are still at risk, which ultimately means scaling back the costs (staff mainly - and consultants are the first to go) required to run the operation.

On the bright side, some items may be selling better than expected (though I doubt they will compensate for the delayed/cancelled items).

 

These are not easy times, and I feel Hornby has no choice but to announce and then cancel/postpone items to effectively test the market place. Its the lowest risk option.

[ThaneofFife]

I'm not sure it's any worse than Bachmann announcing stuff but then, 4 or 5 years later, admitting much of it hasn't even left the design studio, let alone got close to production.

 

Even Hornby is, relatively speaking, more a cottage industry than a mega-corp. Their supply lines are long and complicated and, as a relative minnow, the leverage they have over their suppliers will be modest. And their complicated finances hem them in.

 

Paul

 

but is that on a couple of pages from the catalogue or are you talking about a handful of models?  this Hornby announcement seems to eclipse any past Bachmann aberrations.  I certainly don't recall tens of tens of models being announced then put back.  the class 40 took about 5 years I believe a set back of around 2 years.  ive no doubt there are other examples but not so sure its on the scale of this latest Hornby announcement.

[Ozexpatriate]

Perhaps after the frothing thread we have every year we could start a thread speculating on which models will be cancelled or delayed

Or perhaps conduct a pool for actual release dates?

 

I don't have the energy/enthusiasm to bother to track it myself, but it would be interesting to see accurate records of announcement to delivery duration for all model railway rolling stock products over the last several years.

 

I suspect the actual data would be quite interesting and quite a mixed bag.

[Ozexpatriate]

Today, when looking at the wish list survey, despite the broad lengths that are done to hit a large audience, the number of replies is barely 2000. The max number for any item barely 400. At the same time they might get several requests for a particular model, but it is several requests.

What does this mean?

I have no doubt that the survey results are very representative of what the model railway enthusiast community would like to purchase.

 

Your point that the absolute numbers are indeed very small is quite telling and reflects just how small the British outline model railway market really is.

 

People have such high expectations of what are in fact quite small companies with a long history of boom, bust and marginal profitability, (even if they are a household brand name), with quite small annual revenues. 

[Legend]

What wish list survey is this then?

[Ozexpatriate]

What wish list survey is this then?

This one I presume.

[Legend]

Ah the big survey. Never realised it was only 2000. Interesting. Still it was really jst RMWeb, MREmag and BRM I think. Model Rail seem to have done there own thing. Wonder how many took part there

[Butler Henderson]

How many simply did not bother with either survey would be an interesting survey, find them about as interesting as the Police Commissioner Elections - oh, look there's my unused poll card.

[ruggedpeak]

I think the issue could be lack of pre-orders I know my local shop have not ordered any top of the range models with tts as they feel someone who spends £160 on a top of the range diesel is not usually looking for a budget sound unit. If they are looking to spend this amount they want a full function unit, they have ordered several tts sound railroad models as market is good for these and several Bachmann full spec sound model such as class 66.

 

I feel Hornby may have misjudged the market in regards who wants tts sound with this year's top of the range models.

I agree entirely. The Caley 67 is a case in point - a lovely full price model but of limited geographical and operational use, yet released with TTS to push the RRP

up to £170. Very odd, especially after the success of the Railroad TTS models. Obviously no sales data, but the price of the 67 has already fallen below £130. Fingers crossed it will drop again shortly. This is compounded by the recent fire sales tactics that have meant I have picked up 67's for £80, so my personal price point now for the model is around the £100.

 

Hornby need to stop trying to be clever and focus on the basics and what is proven to work.

 

AS an aside, 86401 has been sitting around at Ilford EMD for some time in its new Caley livery. Looks very nice too.

[JSpencer]

I personally have no issue buying a full spec model with TTS sound. Indeed I even ordered the TTS sound merchant navy.

 

Function wise, its as capable as a normal chip. The down side is that it cannot be reblown and many sounds are generic. But I'm paying only £30 extra instead of £100+. Some shops even remove the unit and sell them separately.

 

Cert, I might eventually go overboard and do a full blown job on a Merchant Navy (though I have several other subjects I want to tackle first), but TTS has allowed me to expand the sound fleet without much additional cost (albeit by only 2 out of 20!).