Hornby discounts

[Pandora]

The message from the new Hornby Chair and discounting may be aimed at concerns by retailers.  In the past retailers have  taken up warehouse clearance stock pushed out by Hornby as discount runs , who  them find Hornby have made further online  discounts leaving  brick and mortar retailers with over-stocked shelves and non-competitive prices

[Coryton]

The message from the new Hornby Chair and discounting may be aimed at concerns by retailers.  In the past retailers have  taken up warehouse clearance stock pushed out by Hornby as discount runs , who  them find Hornby have made further online  discounts leaving  brick and mortar retailers with over-stocked shelves and non-competitive prices

 

I think it was aimed at explaining that they wouldn't be making profits better in the short term by flogging off stock at a discount, doing harm in the long term.

[Widnes Model Centre]

The message from the new Hornby Chair and discounting may be aimed at concerns by retailers.  In the past retailers have  taken up warehouse clearance stock pushed out by Hornby as discount runs , who  them find Hornby have made further online  discounts leaving  brick and mortar retailers with over-stocked shelves and non-competitive prices

 

You win the most accurate post of the year as far as we are concerned.

[hermes]

It may be a trade secret or you may not be allowed to say but what is mark up on Hornby items?

 

Before anyone bites my head off l am fully aware of the costs of running a shop, l used to run one,(not model) so l would think given the limited market for sales a profit of 25% would be the lowest l would go for. Anyone want to put there head above the parapit and put me right.

[royaloak]

Dapol do a similar thing with their OO coach range. Plastic injection, painted and fully assembled in Wales for around £14, or assemble it yourself for £11, a 21% reduction.  

You have just reminded me I need to order some suburban coaches off them.

[gribble]

You win the most accurate post of the year as far as we are concerned.

 

Respectfully, and for the sake of balance, Hornby ceased selling discounted products through their own website at the beginning of 2016, that is unless you were looking for an XXXXL Hornby branded T-shirt. They simply haven't undercut retailers by selling at huge discounts direct online for more than 18 months. Perhaps this is the most accurate post but only if it's 2015?

 

*gribble*

[Gulliver]

Respectfully, and for the sake of balance, Hornby ceased selling discounted products through their own website at the beginning of 2016, that is unless you were looking for an XXXXL Hornby branded T-shirt. They simply haven't undercut retailers by selling at huge discounts direct online for more than 18 months. Perhaps this is the most accurate post but only if it's 2015?

 

*gribble*

 

Agreed, and I think it was the previous CEO Steve Cooke (?) who put a stop to all of this, so I am not sure they have actually said anything new!

[gribble]

Agreed, and I think it was the previous CEO Steve Cooke (?) who put a stop to all of this, so I am not sure they have actually said anything new!

 

Hornby's quote is certainly open to interpretation. I intepreted it as saying they were no longer going to clear the wareouse by selling off stock to retailers at a huge discount, ie we wont see the like of the current situation where B19's/K1's/Kings etc are available at knock down prices from multiple retailers because Hornby will tough it out until the customer buys them all at or near RRP. This logiclly means that Hornby will produce smaller production runs, as to do otherwise risks tying up capital on shelves in a warehouse for a long time, which doesn't genereate revenue or profit. Perhaps we are seeing hints of this mindset already in their return to smaller run limited editions and the return of various luminaries to the organisation, perhaps with a view to getting a better grip on customer desires and market saturation for each model?

 

Time will tell.

 

*gribble*

[Legend]

Respectfully, and for the sake of balance, Hornby ceased selling discounted products through their own website at the beginning of 2016, that is unless you were looking for an XXXXL Hornby branded T-shirt. They simply haven't undercut retailers by selling at huge discounts direct online for more than 18 months. Perhaps this is the most accurate post but only if it's 2015?

 

*gribble*

Yes they stopped under cutting on their website. However I think they did sell bulk items at discount to certain retailers, eg Hattons, Rails, maybe more , which is why things like K1s and Mk1 coaches appeared at very low prices, effectively undercutting their dealer network .

 

To some extent this is a restatement of the policy, but I think maybe this one carries a bit more conviction. It’s probably aimed at their dealer network so that they place orders at the beginning of the year for the 2018 range with some confidence they won’t be dramatically undercut by certain big boys. So the timing is spot on

 

As also previously pointed out they have probably already run down excess stock and introduced by last CEO have only been producing limited quantities of new models , as evidenced by the Peckett.

[Widnes Model Centre]

Respectfully, and for the sake of balance, Hornby ceased selling discounted products through their own website at the beginning of 2016, that is unless you were looking for an XXXXL Hornby branded T-shirt. They simply haven't undercut retailers by selling at huge discounts direct online for more than 18 months. Perhaps this is the most accurate post but only if it's 2015?

 

*gribble*

 

Respectfully, those concerns are still very much current and still being felt by retailers. It was only last Summer, (2016) when Steve Cooke sat in the rear of our shop and explained there would be no more fire sales. We had invited him to the shop to explain the massive stock dumping through certain outlets.  By the time he came to leave we had an email to say that there was a fire sale starting the following day. He seemed a little lost for words.

 

May not have been through Direct Sales but through other outlets. 2016 was actually the year of the great fire sale. We still have stock that we are selling for a lot less than we paid for it. Retailers still have stock that they paid less for than the same items they bought months earlier. Why do you think there are so many bargains still knocking around? We are led to believe that retailers were buying from other retailers as it was a lot cheaper than buying from Hornby. From our own point of view Hornby shot themselves in the foot, we told Steve Cooke that.

 

To misquote George Orwell from his novel, Animal Farm, "All Retailers Are Equal But Some Are More Equal Than Others". In my humble opinion the previous management at Hornby flattered to deceive. Put simply. we couldn't trust them. We are led to believe that we don't all pay the same for Hornby products.

 

We continue to see stock being dropped through their National Accounts. Until this announcement there was still among a lot of retailers a real fear that another fire sale was only just around the corner. Difficult to place orders with Hornby when that fear is foremost in your thoughts. Once bitten twice shy as the saying goes.

 

Why is that fear subsiding? Retailers are putting their faith in  Lyndon Davies, a man with nearly 40 years experience of this industry. I have often been outspoken when it comes to Hornby, mainly because I believe in principles. His announcement as CEO led to much jumping for joy in the trade.

 

If Mr Davies is reading this: May I suggest that there are a lot of fantastic people employed by Hornby with a real love of their company. Start at the bottom and speak to staff, not their managers, who have "been there, done that and got the XXXXL T Shirt. Their love of Hornby is infectious.

 

For those readers who have missed this, an insight well worth reading.

 

http://www.gaugemaster.com/articles/product-spotlight/oxford-diecast-Interview.html

[Clearwater]

To the points on production runs, it’s notable that the new Ivatt Coronations appear to be selling out quickly. Perhaps these were shorter runs than the Kings.

 

David

[Dunsignalling]

To the points on production runs, it’s notable that the new Ivatt Coronations appear to be selling out quickly. Perhaps these were shorter runs than the Kings.

 

David

More likely to be that, unlike the Kings, they haven't been produced before.

 

There will be plenty of people happily running older versions of the King that haven't bothered with the new one. 

 

John

[Chamby]

More likely to be that, unlike the Kings, they haven't been produced before.

 

There will be plenty of people happily running older versions of the King that haven't bothered with the new one. 

 

John

More likely that there are just the two coronations to choose from at the moment. There seemed to be a lot of kings all at once.... I am waiting for a lined black Ivatt Coronation, early British Railways livery. I wonder how long the wait will be?

[gribble]

Respectfully, those concerns are still very much current and still being felt by retailers. It was only last Summer, (2016) when Steve Cooke sat in the rear of our shop and explained there would be no more fire sales. We had invited him to the shop to explain the massive stock dumping through certain outlets.  By the time he came to leave we had an email to say that there was a fire sale starting the following day. He seemed a little lost for words.

 

May not have been through Direct Sales but through other outlets. 2016 was actually the year of the great fire sale. We still have stock that we are selling for a lot less than we paid for it. Retailers still have stock that they paid less for than the same items they bought months earlier. Why do you think there are so many bargains still knocking around? We are led to believe that retailers were buying from other retailers as it was a lot cheaper than buying from Hornby. From our own point of view Hornby shot themselves in the foot, we told Steve Cooke that.

 

To misquote George Orwell from his novel, Animal Farm, "All Retailers Are Equal But Some Are More Equal Than Others". In my humble opinion the previous management at Hornby flattered to deceive. Put simply. we couldn't trust them. We are led to believe that we don't all pay the same for Hornby products.

 

We continue to see stock being dropped through their National Accounts. Until this announcement there was still among a lot of retailers a real fear that another fire sale was only just around the corner. Difficult to place orders with Hornby when that fear is foremost in your thoughts. Once bitten twice shy as the saying goes.

 

Why is that fear subsiding? Retailers are putting their faith in  Lyndon Davies, a man with nearly 40 years experience of this industry. I have often been outspoken when it comes to Hornby, mainly because I believe in principles. His announcement as CEO led to much jumping for joy in the trade.

 

If Mr Davies is reading this: May I suggest that there are a lot of fantastic people employed by Hornby with a real love of their company. Start at the bottom and speak to staff, not their managers, who have "been there, done that and got the XXXXL T Shirt. Their love of Hornby is infectious.

 

For those readers who have missed this, an insight well worth reading.

 

http://www.gaugemaster.com/articles/product-spotlight/oxford-diecast-Interview.html

 

A fine point. If I was a retailer who has just placed an order to find the same models halved in price (wholesale) the next week to clear the decks I'd certainly be questioning doing business with that supplier again. It's easy to see why so many retailers are refusing to order in much if any Hornby anymore. I guess in any business though, its not possible to rule out a fire sale from time to time and this presents an issue. Slow moving stock has to be moved eventually and this is a challenge facing any manufacturer. Feedback from retailers suggest Hornby need to be better (much better) at managing this process. When I hear the statement about no more discounting I take it with a pinch of salt, but maybe what they mean is they'll do it less often by managing their pipeline a bit better. If the numbers dont stack, there will be sale to raise cash. This is an unavoidable truth and a new chief exec with a press release doesn't reinvent basic economics. The bills still need paying after all. As Legend says, this press release is designed to win over reluctant retailers so they place some orders. If not enough orders are placed, well...

 

*gribble*

[adb968008]

Hornby's quote is certainly open to interpretation.

Quite,

My interpretation was, another year, another CEO. Feels like the first thing every CEO does at Hornby is find an excuse to blame for poor sales figures and missing targets in the current year, is to blame a policy of the predecessor, so he is covered at next years EOY accounts and buys him more time.

I’d more forgiving if a new CEO arrived and said “Here is a turnaround plan in line with a new strategy and needs x amount of time to implement it”... but I have never seen that, which makes me think there’s a bit of a struggle with grappling the problem by each new CEO.

 

Excuses since 2013: The Olympics, Sanda kan, the ERP system, European and Direct sales and now 2017 the holding back of discounts.

Similarly we’ve had Martin, Ames, Cooke, Johnson.. thats a lot of CEO turnover in a short period.

 

My opinion, Hornby is too big to support its business. It can increase prices but it’s got to face up to its costs, as growth just isn’t there at the levels needed. It’s of note that Oxford Rails prices are substantially lower than Hornby’s.. Oxfords Radial is £105 vs Hornby’s £140..yet Oxford seems to be doing ok at a lower price point across the entire range, my assumption is Oxford can do Hornby’s job at much lower costs.

Edited October 27, 2017 by adb968008

[Chamby]

It’s of note that Oxford Rails prices are substantially lower than Hornby’s.. Oxfords Radial is £105 vs Hornby’s £140..yet Oxford seems to be doing ok at a lower price point across the entire range, my assumption is Oxford can do Hornby’s job at much lower costs.

RRP means very little in a discounted market. It is what products are being sold for that counts - that is the real “price point”.

 

Right now I can buy a new Hornby BR black Radial for £82 and an Oxford Rail one for £88 from Hattons. More than 10 in stock of both... Hornby versions are now on sale at a lower price point than Oxford.

 

That illustrates the points being made by retailers here rather well.

[jjb1970]

On price, it isn't quite as simple as just comparing prices. Oxford model trains tend to significantly undercut those of other companies (not just Hornby), they also tend to display a lesser attention to getting it right and have a sense of having been developed to be 'good enough'. That isn't necessarily a bad thing and I believe there is a very good argument in support of slightly cheaper but still good models. However if customers want suppliers to go the final mile to get things right then there will be a cost to that. So it may be an apples and pears comparison.

For all that I have commented several times that there are very few fixed costs in any business and that I question the production efficiency and cost base of some of these companies. So certainly it may be true that Oxford is a much leaner, more efficient company.

[Fenman]

On price, it isn't quite as simple as just comparing prices. Oxford model trains tend to significantly undercut those of other companies (not just Hornby), they also tend to display a lesser attention to getting it right and have a sense of having been developed to be 'good enough'. That isn't necessarily a bad thing and I believe there is a very good argument in support of slightly cheaper but still good models. However if customers want suppliers to go the final mile to get things right then there will be a cost to that. So it may be an apples and pears comparison.

For all that I have commented several times that there are very few fixed costs in any business and that I question the production efficiency and cost base of some of these companies. So certainly it may be true that Oxford is a much leaner, more efficient company.

Quite. It's like those people who made unfavourable comparisons between Bachmann's prices and those of Vi Trains (whatever happened to them?). Apples and pears.

 

I'm one of those who'd rather get a better product by paying more, though I also recognise that's not even an option for some people. The market can surely support both approaches, without us trying to make every manufacturer produce only models that meet our own particular detail/price requirements?

 

I vaguely remember that the *average* time in post of a private sector CEO is 18 months. Attrition rates are incredibly high. If I were a newly appointed CEO, I'd be desperately trying to buy myself a bit more time...

 

Paul

[The Stationmaster]

To the points on production runs, it’s notable that the new Ivatt Coronations appear to be selling out quickly. Perhaps these were shorter runs than the Kings.

 

David

 

Part of the problem with the 'Kings' was that they appeared in a number of versions and then fell into the Year 2 trap with even more versions.  It was old Hornby marketing at its most ridiculous.  I suspect Year 2 and Year 3 production is something which is going to largely disappear from Hornby's marketing - indeed it already is disappearing - and they will look to recover development costs in Year 1 (which could affect prices or the number of variants made available in that Year).  Year 2 will no doubt be around for some very popular models, such as the Pecketts, but with far greater care than we saw with various items in the past.

On price, it isn't quite as simple as just comparing prices. Oxford model trains tend to significantly undercut those of other companies (not just Hornby), they also tend to display a lesser attention to getting it right and have a sense of having been developed to be 'good enough'. That isn't necessarily a bad thing and I believe there is a very good argument in support of slightly cheaper but still good models. However if customers want suppliers to go the final mile to get things right then there will be a cost to that. So it may be an apples and pears comparison.

For all that I have commented several times that there are very few fixed costs in any business and that I question the production efficiency and cost base of some of these companies. So certainly it may be true that Oxford is a much leaner, more efficient company.

 

Overall Oxford (and of course even more so LCD) is massively leaner than Hornby but it does of course have a much less diverse range of brands and types of models etc.

[Dunsignalling]

Part of the problem with the 'Kings' was that they appeared in a number of versions and then fell into the Year 2 trap with even more versions.  It was old Hornby marketing at its most ridiculous.  I suspect Year 2 and Year 3 production is something which is going to largely disappear from Hornby's marketing - indeed it already is disappearing - and they will look to recover development costs in Year 1 (which could affect prices or the number of variants made available in that Year).  Year 2 will no doubt be around for some very popular models, such as the Pecketts, but with far greater care than we saw with various items in the past.

 

Overall Oxford (and of course even more so LCD) is massively leaner than Hornby but it does of course have a much less diverse range of brands and types of models etc.

The 'Year 2 Trap', i.e. having second wave models arriving long before the market has properly absorbed the initial releases, will be one of the most urgent things in the new CEO's in-tray.

 

It resulted in what was effectively the dumping of newly released versions of several locos, inhibiting sales of overhanging stocks from the initial batches even more. Most of the items heavily discounted from day one seemed to go, in bulk, to larger dealers, further deterring the smaller ones from ordering Hornby products other than against definite pre-orders.

 

Timing is everything, and far too often, Hornby have got theirs badly wrong, damaging both their own bottom line and goodwill across much of the retail trade. They appear to have got it right with the Pecketts, but I hope that isn't just a fortuitous convergence of factors largely outside their control..

 

It has to be corrected, or new releases will linger on the shelves as an expectation of cheaper Year 2 models becomes a self-fulfilling prophecy. OK, we may benefit to the tune of a few quid by keeping our wallets shut for a while but, ultimately, it will result in fewer new Hornby models for us to buy.

 

Year 2 really has to mean Year 2, and probably well into Year 2 at that. 

 

John

Edited October 28, 2017 by Dunsignalling

[Steamport Southport]

Quite. It's like those people who made unfavourable comparisons between Bachmann's prices and those of Vi Trains (whatever happened to them?). Apples and pears.

 

Still going strong. The British models were made as a commission.

 

Scroll down for latest catalogue in PDF format.

 

http://www.vitrains.it/en/node/14

 

 

 

Jason

[darren01]

"The only way out I see is for Hornby to cut off all spare parts, so when ours break..their broken, eventually attrition may force us to buy new." 

 

I know i would not be happy spending over £150.00 for a loco and it going pop in a year, also with the short runs would you be able to obtain another one?.

[darren01]

Respectfully, those concerns are still very much current and still being felt by retailers. It was only last Summer, (2016) when Steve Cooke sat in the rear of our shop and explained there would be no more fire sales. We had invited him to the shop to explain the massive stock dumping through certain outlets.  By the time he came to leave we had an email to say that there was a fire sale starting the following day. He seemed a little lost for words.

 

May not have been through Direct Sales but through other outlets. 2016 was actually the year of the great fire sale. We still have stock that we are selling for a lot less than we paid for it. Retailers still have stock that they paid less for than the same items they bought months earlier. Why do you think there are so many bargains still knocking around? We are led to believe that retailers were buying from other retailers as it was a lot cheaper than buying from Hornby. From our own point of view Hornby shot themselves in the foot, we told Steve Cooke that.

 

To misquote George Orwell from his novel, Animal Farm, "All Retailers Are Equal But Some Are More Equal Than Others". In my humble opinion the previous management at Hornby flattered to deceive. Put simply. we couldn't trust them. We are led to believe that we don't all pay the same for Hornby products.

 

We continue to see stock being dropped through their National Accounts. Until this announcement there was still among a lot of retailers a real fear that another fire sale was only just around the corner. Difficult to place orders with Hornby when that fear is foremost in your thoughts. Once bitten twice shy as the saying goes.

 

Why is that fear subsiding? Retailers are putting their faith in  Lyndon Davies, a man with nearly 40 years experience of this industry. I have often been outspoken when it comes to Hornby, mainly because I believe in principles. His announcement as CEO led to much jumping for joy in the trade.

 

If Mr Davies is reading this: May I suggest that there are a lot of fantastic people employed by Hornby with a real love of their company. Start at the bottom and speak to staff, not their managers, who have "been there, done that and got the XXXXL T Shirt. Their love of Hornby is infectious.

 

For those readers who have missed this, an insight well worth reading.

 

http://www.gaugemaster.com/articles/product-spotlight/oxford-diecast-Interview.html

Love this bit in the Article .Finally, the engineering advances has meant that the time getting a product to market has decreased, it took a year back in the 70’s. Today, give me a subject and the motivation and I could get it to market in 6 months.

Edited November 1, 2017 by darren01

[Ron Ron Ron]

I don't know if will amount to any large discounting, or dumping of stock, but Hornby will have a second and separate stand at Warley in a couple of weeks time.

It's listed on the show guide as "Hornby Sales".

 

Is it an attempt to emulate Bachmann's exhibition sales effort?

 

.

[adb968008]

RRP means very little in a discounted market. It is what products are being sold for that counts - that is the real “price point”.

Right now I can buy a new Hornby BR black Radial for £82 and an Oxford Rail one for £88 from Hattons. More than 10 in stock of both... Hornby versions are now on sale at a lower price point than Oxford.

That illustrates the points being made by retailers here rather well.

Your comparing the wrong price.

 

That price quoted is the end user.

It’s the price sold by Hornby to retailer that matters, the retailer is Hornby’s customer.

 

I don't know if will amount to any large discounting, or dumping of stock, but Hornby will have a second and separate stand at Warley in a couple of weeks time.

It's listed on the show guide as "Hornby Sales".

 

Is it an attempt to emulate Bachmann's exhibition sales effort?

 

.

Isn’t Hornby offering a special Warley 50th ltd edition of 1450 ?

Maybe it’s an outlet for that ?

Edited November 8, 2017 by adb968008