Hornby 2023 Annual Report

[adb968008]

3 hours ago, BachelorBoy said:

 

Don't forget us, the consumers :-)

 

If it gets passed on.

 

if its in the warehouse, its already bought and paid for, at the old exchange.

Similarly a devaluation doesnt immediately benefit if theres been a currency hedge.

 

[Widnes Model Centre]

21 hours ago, The Stationmaster said:

 

Major effort to clear down inventory without harming brand values.

Looks like it’s started.

 

 Very large reductions on the Play Trains range. E.g. Flash train set, R9332M, was £64.99 now £49.99. 
However, R9334 was £11.99 now reduced to only £13.99.

 

That has certainly devastated er sorry devalued our stock. 

[Rhydgaled]

3 hours ago, Widnes Model Centre said:

Looks like it’s started.

 

 Very large reductions on the Play Trains range. E.g. Flash train set, R9332M, was £64.99 now £49.99. 
However, R9334 was £11.99 now reduced to only £13.99.

 

That has certainly devastated er sorry devalued our stock. 

Are these price reductions, for the purpose of clearing warehouse stock, going to be limited to the Hornby website or will they also be selling some of their stock off to retailers (as in model shops like Hattons, TMC, Derails etc.) cheaper than previously - in which case we may see (more) special offers from retailers too?

Or is it only the Play Trains range that they have surplus warehouse stock in anyway?

[The Stationmaster]

13 hours ago, adb968008 said:

Relies on convincing the retailer to want to buy buy buy though.

 

I’m interested to see what retail channels they go for.
 

The 3 point focus was clear, TT120, Digital Market Place and Hobby Rewards.. none of these obviously relate to “National Retail” as far as I see.

 

National Retail isnt defined, whether thats the existing channel, or an attempt at high st supermarket/ amazon etc is unknown.

Capsule range said it was based around dumbing down existing models to reduce price.

 

I take this to be more main range relegated to railroad, in some cases, like the 153 or 8F imo its already there, in others I actually see some sense in dialing back the detail on the 50,56,60 as theyve a serious challenger in front of them. In steam I am less sure what avenues they could turn, most of the last 6-7 years has been tooling renewal, (duplication),  or producing oddballs and experimentals which really have a short half life… if you have a W1 are you really going to buy a dumbed down second one ? The other option is resting superdetail and reverting back to old 1980’s toolings (25/58/142 etc)

 

if I were to guess, i’d link Existing retail to Capsule and Digital, Hobby and TT to their website.

where this leaves the superdetail models, I do not know.

 

Reading between the lines though it feels that 00 as we know it in Hornby is going to change, whether it works for modellers is one thing, and whether it works for Hornby may just be another.

 

 

 

 

 

I agree very much with your final paragraph.  There definitely look to be changes on the near horizon - and already taking place on 00/. Quite which way they'll go I wonder but there's a lot of emphasis on TT120 and if they're truly savvy they should be pumping those sets into the 'national retailer' area to capture newcomers who might then advance beyond the trainset and to an area where Hornby currently have. no real competition.

 

'National retailer' sales used t be separately identified in sales figures but that ceaseda long time ago and it was handled by a different sales person.  Clearly it remain important business to them - around 12% of their UK sales judging by what wasn't sold into that market last Christmas.  So it's an area they need to get back into purely for sales income if nothing else.  They ceased to identify sales figure by brand some years ago but what I can see developing is that once new products have been carefully assessed against market demand there might be competition between brands on the basis of forecast profitability of new investment and bottom line return on money invested.   That might also mean getting quantities right so they can actually supply what retailers order rather than either not meeting orders or piling unsold stuff in expensive warehousing.

[RJS1977]

13 hours ago, adb968008 said:

Relies on convincing the retailer to want to buy buy buy though.

 

I’m interested to see what retail channels they go for.
 

The 3 point focus was clear, TT120, Digital Market Place and Hobby Rewards.. none of these obviously relate to “National Retail” as far as I see.

 

National Retail isnt defined, whether thats the existing channel, or an attempt at high st supermarket/ amazon etc is unknown.

Capsule range said it was based around dumbing down existing models to reduce price.

 

I take this to be more main range relegated to railroad, in some cases, like the 153 or 8F imo its already there, in others I actually see some sense in dialing back the detail on the 50,56,60 as theyve a serious challenger in front of them. In steam I am less sure what avenues they could turn, most of the last 6-7 years has been tooling renewal, (duplication),  or producing oddballs and experimentals which really have a short half life… if you have a W1 are you really going to buy a dumbed down second one ? The other option is resting superdetail and reverting back to old 1980’s toolings (25/58/142 etc)

 

 

 

 

 

 

I'd suggest that there is plenty in the "back catalogue" that could be reintroduced as part of Railroad if priced appropriately, particularly from the ex-Dapol range - including the J94 Austerity (a preservation stalwart!), the "old" Terrier and the 14XX.

 

As I've said before, for Railroad really to work, it needs to have at least an express loco, a medium-sized goods loco and a tank loco plus appropriate rolling stock from each of the Big 4, and equivalents for the BR steam/transition era, rail blue, and onwards. Ideally as many of these as possible should have identities of locos that are represented in preservation (and ideally, "in ticket" and can be ridden behind).

 

I'd also suggest that perhaps the "Railroad" name is a little tainted by association with the "train set" end of the range - Railroad isn't just for children, it's also for adults on lower budgets. I'm not sure what an appropriate name would be though - needs to be something that says it's the basic range without saying it's the basic range if you see what I mean!

[The Stationmaster]

12 hours ago, Clearwater said:

The problem with Margate isn’t necessarily is what is in the Centre but that it’s in Margate.  It’s geographically remote, hence also bad as a distribution centre, but won’t have anything like the passing casual visitors that another location might otherwise secure.

 

It’d be interesting to compare their visitor numbers with pecorama.  But the pecorama offering is quite multi-dimensional (gardens, soft play, mini railway, mini golf etc).  What exactly are they planning and how are they going to get the numbers to visit?

Warehousing is of course some way from Matgete in teh hands of amajor distrubtion company with good motorway access and handling produv ct from various companies; far better situated than Margate.

 

The problem with any indoor attraction at/near a seaside resort is that for the general market its footfall is very weather dependent.  Sunny day they're on the beach etc, wet days they need somewhere indoors.  The name will attract some visitors obviously but the casual market is a different thing.   And apart from 'the seaside' Margates is in a geographical location which is too remote to attract quite a lot of people.

 

But, as you say, the Pecorama comparison shows the range of things that a good attraction needs to get visitors in.   Some things for a variety of age ranges, some things for good weather (essential near the seaside), and something for bad weather which those there for the outdoor things will also be tempted to visit.  All on a single site, with plenty of parking space (ideally for mountain goats), and with a shop immediately after the model railway layouts have whetted your appetite.  In many respects it's not  the most accessible attraction in that area but it pulls in lots of visitors because of what it offers.

 

Simple comparison - we go to that part of the world because South Devon/south Dorset has plenty of interesting things to visit so we do go to Pecorama as it's 'handy'.  I'm far less tempted to visit Margate because getting there is a much longer drive and you really need a car to get out of the place if you stay in that corner of Kent.

[60027Merlin]

13 hours ago, shunny said:

I think Hornby need more specialist to help with predicting demand, some good examples I spoke to several retailers after mine told me he was allocated 3 full rakes of Mk3 coaches but only 1 set of power cars. They all have said something similar so there will be a glut of coaches but not enough power cars to pull them. Another example new TTA wagons shops being allocated 3 of each. If Hornby understand the market better they would know these are block train wagons and people will buy multiple (yet no triple packs in range) so again missed sales. My local shop often says he can't get enough items from Hornby due to production numbers but was allocated  more M7's in BR malachite green than any other loco and he is based in central Scotland?

 

Re your last sentence;

 

Of course!  the vast majority of us modellers up north model the Southern stuff !

 

(In fact they fly of the shelves like a lead weight).

Edited August 2, 2023 by 60027Merlin

[Clearwater]

30 minutes ago, The Stationmaster said:

Warehousing is of course some way from Matgete in teh hands of amajor distrubtion company with good motorway access and handling produv ct from various companies; far better situated than Margate.

 

The problem with any indoor attraction at/near a seaside resort is that for the general market its footfall is very weather dependent.  Sunny day they're on the beach etc, wet days they need somewhere indoors.  The name will attract some visitors obviously but the casual market is a different thing.   And apart from 'the seaside' Margates is in a geographical location which is too remote to attract quite a lot of people.

 

But, as you say, the Pecorama comparison shows the range of things that a good attraction needs to get visitors in.   Some things for a variety of age ranges, some things for good weather (essential near the seaside), and something for bad weather which those there for the outdoor things will also be tempted to visit.  All on a single site, with plenty of parking space (ideally for mountain goats), and with a shop immediately after the model railway layouts have whetted your appetite.  In many respects it's not  the most accessible attraction in that area but it pulls in lots of visitors because of what it offers.

 

Simple comparison - we go to that part of the world because South Devon/south Dorset has plenty of interesting things to visit so we do go to Pecorama as it's 'handy'.  I'm far less tempted to visit Margate because getting there is a much longer drive and you really need a car to get out of the place if you stay in that corner of Kent.

 

Pecorama also has a neat all year round model.  Huge soft play barn.  Clearly runs large number of under 5s birthday parties year round.  Ditto the Pullman coach for that special afternoon tea.  It's not just train orientated.

[HExpressD]

1 hour ago, Rhydgaled said:

Are these price reductions, for the purpose of clearing warehouse stock, going to be limited to the Hornby website or will they also be selling some of their stock off to retailers (as in model shops like Hattons, TMC, Derails etc.) cheaper than previously - in which case we may see (more) special offers from retailers too?

Or is it only the Play Trains range that they have surplus warehouse stock in anyway?

I don't think it's stock clearing, I think it's just jiggling some prices to make them a tad more realistic 

[Fireline]

21 minutes ago, HExpressD said:

I don't think it's stock clearing, I think it's just jiggling some prices to make them a tad more realistic 

 

I think it's the realisation that, especially in the current economic climate, you aren't going to sell the sets to people that lead to kids getting into the hobby, if the sets are beyond most people's budget. When the Santa set was almost £100, you could see that a swift injection of common sense was needed. Take a lower percentage on a sale, or take 100% of a no sale....

[adb968008]

2 hours ago, RJS1977 said:

 

I'd also suggest that perhaps the "Railroad" name is a little tainted by association with the "train set" end of the range - Railroad isn't just for children, it's also for adults on lower budgets. I'm not sure what an appropriate name would be though - needs to be something that says it's the basic range without saying it's the basic range if you see what I mean!

Hornby arent short of brand name, but this capsule could become “Hornby” with the detailed stuff becoming “Dublo” and a bit more exclusive perhaps ?

 

When I look at Hornby, sometimes I see Gordon Ramseys kitchen nightmares, but despite the variable outcomes of the show, there is concurrent themes that relate..

1. inefficiency, stress and fatigue

2. a viable business suffering 

3. a bloated menu with quality issues that causes 1 & 2

4. a brand name to save it.

5. Enough customers to support it, but are alienated.

 

If the new CEO reduces Hornbys menu, focuses on “pasta” as its easy, fast, cheap and people seem to like it, the burden to tool a war could be reduced, and for the exclusive menu theres brand names available… TT120, Dublo.

 

if selling variations of pasta based dishes to the high street turns Hornby around and makes them profitable then he’s done his job. It puts the super detailed models  as more exclusive deserts.. which is why I wonder if they become dublo ?

Not sure where it puts the modeller, but high st/ kids are covered as is collectors.. one known for consistent bulk,the other for high disposable income.

Edited August 2, 2023 by adb968008

[melmoth]

4 hours ago, Clearwater said:

 

Pecorama also has a neat all year round model.  Huge soft play barn.  Clearly runs large number of under 5s birthday parties year round.  Ditto the Pullman coach for that special afternoon tea.  It's not just train orientated.

 

OT, I think the soft play area has gone now. It was converted into factory space during lockdown and I don't think it's mentioned on the Pecorama website anymore.

[The Black Hat]

4 hours ago, 60027Merlin said:

 

Re your last sentence;

 

Of course!  the vast majority of us modellers up north model the Southern stuff !

 

(In fact they fly of the shelves like a lead weight).

 

Only because people make models because of what is collectively available. In terms of making other models if there are is a corresponding model available then it leads on to making others and that in turn ends up satisfying those modelling an area. 

 

Usually this starts with BR standards and grouping engines being done, then you dial down to what is more popular and then end up going for the pre-grouping that last till the end of steam and then those from 'pre' and finished in grouping. As things become more niche they loose mass appeal and could not be as popular thus generate sales. That then brings the novelty issue into play and thus you might get a few extra engines being done. People then buy and collect them all as then its complete, but as this is a point I have been making for a while, what you then have is market saturation of particular areas and Hornby (with Bachmann) have been in what has been a popular Southern region for a point. Once you add in the slam door stock or 3rd rail that is purposefully built for this market too and theres a clear disparity. Add in then all the novelty plus engines done by competition and you find that the general use / common / engines sit on shelves such as the Hornby WC/BB and they dont sell. Only distruption to supply (by Covid or production delays) caused this to dry up - masking a true problem. So companies like Hornby that need the cashflow dont get it and others dont get the engines needed. 

Ironically, those down south must be liking modelling Scottish areas as the choices for these have been growing and now some are in production. Alternatively you model a different period and theres plenty of modern Scottish layouts doing privatisation or the customary BR West highland line scene. But then... models for these are available and you come full circle so because they are available they match someones interest and thus sell so that scene gets done. 

[Ouroborus]

3 hours ago, adb968008 said:

 

 

if selling variations of pasta based dishes to the high street turns Hornby around and makes them profitable then he’s done his job. It puts the super detailed models  as more exclusive deserts.. which is why I wonder if they become dublo ?

Not sure where it puts the modeller, but high st/ kids are covered as is collectors.. one known for consistent bulk,the other for high disposable income.

 

Very much agree with this, however i think many of us will suspect that Hornby's exclusive desert menu will have some pasta in it somewhere 

[ColinB]

6 hours ago, adb968008 said:

Hornby arent short of brand name, but this capsule could become “Hornby” with the detailed stuff becoming “Dublo” and a bit more exclusive perhaps ?

 

When I look at Hornby, sometimes I see Gordon Ramseys kitchen nightmares, but despite the variable outcomes of the show, there is concurrent themes that relate..

1. inefficiency, stress and fatigue

2. a viable business suffering 

3. a bloated menu with quality issues that causes 1 & 2

4. a brand name to save it.

5. Enough customers to support it, but are alienated.

 

If the new CEO reduces Hornbys menu, focuses on “pasta” as its easy, fast, cheap and people seem to like it, the burden to tool a war could be reduced, and for the exclusive menu theres brand names available… TT120, Dublo.

 

if selling variations of pasta based dishes to the high street turns Hornby around and makes them profitable then he’s done his job. It puts the super detailed models  as more exclusive deserts.. which is why I wonder if they become dublo ?

Not sure where it puts the modeller, but high st/ kids are covered as is collectors.. one known for consistent bulk,the other for high disposable income.

Funny that is my view of current Hornby. On the Hornby forum I was commenting on their pre order system where you order a loco and 4 years later it pops out their system. Big issue is most collectors preorder the loco at the price stated so if it takes 4 years to produce it then Hornby sells the model at the price that was relevant 4 years ago. Ok, I know they save a bit by doing direct sales but if they took the preorders nearer the time they release it, then they would make more money. I would imagine the new boss is trying to run it as a business hence all the turmoil. Their situation is now made worse in they have excess stock. I recently bought an APT about £200 below list price, now to me that was what I thought it was worth, but when people see that, they are less inclined to pay the full price for the new model which came out just after I bought mine.  The thing is Hornby locos are well engineered but Dapol and Accurascale are producing models that are equally as good but a lot cheaper. 

I would imagine profit percentage wise that they make on paint probably exceeds what they make on model railways without all the overheads.

[Les1952]

1 hour ago, ColinB said:

Funny that is my view of current Hornby. On the Hornby forum I was commenting on their pre order system where you order a loco and 4 years later it pops out their system.

 

Only four?  I've just been invoiced for a Bachmann ordered 5 years and 5 months ago.....

 

Les

 

[1andrew1]

On 01/08/2023 at 23:36, Clearwater said:

The problem with Margate isn’t necessarily is what is in the Centre but that it’s in Margate.  It’s geographically remote, hence also bad as a distribution centre, but won’t have anything like the passing casual visitors that another location might otherwise secure.

 

It’d be interesting to compare their visitor numbers with pecorama.  But the pecorama offering is quite multi-dimensional (gardens, soft play, mini railway, mini golf etc).  What exactly are they planning and how are they going to get the numbers to visit?

Agreed. At one stage, they were going to move to a more central location in Margate but that didn't happen due to the cost. 

 

Shopping centres are crying out for new tenants and the move to mixed retail and leisure could sit well with the new Hornby World concept if it included opportunities to try out Hornby and Scalextric products as well as buying them. 

 

It would be interesting to know how Bachmann's retail outlet is faring. I suspect that its location constrains it as well.

[adb968008]

3 hours ago, ColinB said:

 The thing is Hornby locos are well engineered but Dapol and Accurascale are producing models that are equally as good but a lot cheaper. 

I would imagine profit percentage wise that they make on paint probably exceeds what they make on model railways without all the overheads.

Which is why I think they need to get out of mid market.

They are getting thumped on duplication, rush to market and trivial errors, yet its an expensive market to play in from a cost perspective.

 

They can probably sell railroad 66’s all day long. Similar many railroad steam locos probably dont matter what the prototype is.

 

At the upper end, emulating Wrenn probably isnt a bad route, collectors will pay whatever label is put on, as long as the quality is good enough. All they need to do is put stuff in blue boxes instead of red ones. Who here would argue the latest 9f isnt worthy of a Dublo box ?

 

Then retreat from mainstream 00 as others have eaten or are eating the good stuff and they have issues getting it perfect anyway, taking the better ones down a notch in detail to be price competitive in a revamped “railroad” that is now “Hornby”.

 

That way from this point on they can pretty much end their tooling war chest budget, and focus on sales and restocking of standard lines, with the focus on collectors re-runs in the dublo space.

 

its almost like a whisky range that way… you have the cheap stuff in the supermarkets in volume… Bells etc and the niche stuff in airport duty free in editions at high margin.
 

As for TT, its still a niche for a while yet, at somepoint their crm will kick in and make suggestions.

 

 

 

Edited August 2, 2023 by adb968008

[BachelorBoy]

12 hours ago, adb968008 said:

 

 

When I look at Hornby, sometimes I see Gordon Ramseys kitchen nightmares, but despite the variable outcomes of the show, there is concurrent themes that relate..

1. inefficiency, stress and fatigue

2. a viable business suffering 

3. a bloated menu with quality issues that causes 1 & 2

4. a brand name to save it.

5. Enough customers to support it, but are alienated.

 

I think that's a pretty good analogy

 

BB

[ColinB]

8 hours ago, adb968008 said:

Which is why I think they need to get out of mid market.

They are getting thumped on duplication, rush to market and trivial errors, yet its an expensive market to play in from a cost perspective.

 

They can probably sell railroad 66’s all day long. Similar many railroad steam locos probably dont matter what the prototype is.

 

At the upper end, emulating Wrenn probably isnt a bad route, collectors will pay whatever label is put on, as long as the quality is good enough. All they need to do is put stuff in blue boxes instead of red ones. Who here would argue the latest 9f isnt worthy of a Dublo box ?

 

Then retreat from mainstream 00 as others have eaten or are eating the good stuff and they have issues getting it perfect anyway, taking the better ones down a notch in detail to be price competitive in a revamped “railroad” that is now “Hornby”.

 

That way from this point on they can pretty much end their tooling war chest budget, and focus on sales and restocking of standard lines, with the focus on collectors re-runs in the dublo space.

 

its almost like a whisky range that way… you have the cheap stuff in the supermarkets in volume… Bells etc and the niche stuff in airport duty free in editions at high margin.
 

As for TT, its still a niche for a while yet, at somepoint their crm will kick in and make suggestions.

 

 

 

Quality seems to be a big issue, even their Dublo range has issue. My last one had broken valve gear out of the box and the cab to boiler joint fell apart. Sent it back to the retailer I bought it off, it then took two months for Hornby to accept the return off them as they couldn't give me another one. They eventually sort of fixed the valve gear but left the rest. I gave up at that point. A guy on the web pointed out tons of paint issues with his Sir Nigel Gresley, I think he eventually got given a discount. I just get the opinion that they take the normal loco and plonk a die cast body on it. Worse still I think they assume that it will never be run so do even less QA checks. I know my retailer said they would normally test it but lots of customers didn't want them run. Then we have the penny pinching latest class 87 from Hornby compare the lighting functions with that of a Bachmann class 90 or a Accurascale class 92, and don't  lets mention the pantograph. It retail price should be at least £50 cheaper, it is no wonder that they are left with excess stock. On the class 87 they updated the PCB design to include their new decoder (which incidentally doesn't fit that well) so they could have upgraded the lighting functions whilst they did it.

[adb968008]

Quality and Care are symbiotic.

Quality is a key benchmark in defining value

if  someone doesnt care why should someone else value it higher ?

 

Thing is its not hard to show care, nor is it expensive, but the rewards for it are huge multipliers.

 

 

Edited August 3, 2023 by adb968008

[ColinB]

Another big issue is if you have waited up to 4 years for a preorder to arrive and the loco is a lemon you are going to tell the world, even worse Sam gets hold of it and does a review. Currently Hornby seem to charge top prices with less functionality than most of the other retailers so you would think quality should be their number 1 objective. If their locos were really cheap, people are more inclined to accept the faults (remember Skoda when it first came out was awful, but many happy customers) but when you are charging top prices it leaves you open to criticism. If you ever watch a Sam review, if the loco is cheap he tones down the review to reflect it. I suppose the big issue at the moment is Accurascale and Dapol, make decent locos at reasonable prices. I still can't believe how much Dapol charge for a wagon and it is made in the UK.

[The Stationmaster]

16 hours ago, adb968008 said:

Which is why I think they need to get out of mid market.

They are getting thumped on duplication, rush to market and trivial errors, yet its an expensive market to play in from a cost perspective.

 

They can probably sell railroad 66’s all day long. Similar many railroad steam locos probably dont matter what the prototype is.

 

At the upper end, emulating Wrenn probably isnt a bad route, collectors will pay whatever label is put on, as long as the quality is good enough. All they need to do is put stuff in blue boxes instead of red ones. Who here would argue the latest 9f isnt worthy of a Dublo box ?

 

Then retreat from mainstream 00 as others have eaten or are eating the good stuff and they have issues getting it perfect anyway, taking the better ones down a notch in detail to be price competitive in a revamped “railroad” that is now “Hornby”.

 

That way from this point on they can pretty much end their tooling war chest budget, and focus on sales and restocking of standard lines, with the focus on collectors re-runs in the dublo space.

 

its almost like a whisky range that way… you have the cheap stuff in the supermarkets in volume… Bells etc and the niche stuff in airport duty free in editions at high margin.
 

As for TT, its still a niche for a while yet, at somepoint their crm will kick in and make suggestions.

 

 

 

Hoernby's big problem - which they have largely created for themselves - is the messy overlap and misuse of their various model railway brands.  They needed to sort that out years ago - making a start with actually deciding what Railroad was meant to be instead of it being all things to all men in various ways.   More recently they've extended their lack of brand awareness and identity to Hornby Dublo with the mixed messages about the metal bodied Deltic.  Chuck in things like Playtrain and grossly over-priced 00 starter sets and it's  a marketing train crash creeping tpwaerds them.

 

TT120 has started witha very clear identity but will they be able to resist fiddling with it.  In the past i wouldn't have been surprised to see it becoming blurred but hopefully now the clarity of brand and quality level etc will be maintained.  But while the new range will inevitably cause some Balkanisation that's no excuse for not sorting up brand identoities in 00 and hopefully they now have an opportunity to do that. 

 

But first they need to sell and get in much needed revenue (and review their organisation)..

[micklner]

Has anyone replace Kohler ?

 

Hornby seem to be going into a wilderness of their own creation. Loadsa of waffle , false promises, ludricous prices for in the some items, poor quality old tat.

 

Why do they continue at Margate, in every programme the place is 3/4 empty, how much money are they wasting on staying there. Dreaming of yesteryear when they were top of a small pile.

[stonesboy]

10 minutes ago, micklner said:

Has anyone replace Kohler ?

 

Hornby seem to be going into a wilderness of their own creation. Loadsa of waffle , false promises, ludricous prices for in the some items, poor quality old tat.

 

Why do they continue at Margate, in every programme the place is 3/4 empty, how much money are they wasting on staying there. Dreaming of yesteryear when they were top of a small pile.

Didn’t they move back to Margate because it was cheaper than the new offices they moved to several years ago.