Hornby Tier System

[Fair Oak Junction]

I was very into steampunk about 10+ years ago, and still am a little bit. Went to loads of shows and fairs, saw some absolutely amazing outfits and accessories. There was even a steampunk exhibition held in the Museum of the History of Science in Oxford showing some absolutely superb items! Very few people I met over the years in the hobby seemed like the model railway type. There were some, definitely, but they were a minority.

 

My biggest issue with the Hornby "steampunk" range is that the items just looked sad. Saying that though, I am NOT in any way disparaging Laurie Calvert's own creations. I love what he had done with his models and always though it was very creative. However, Hornby had a chance to do something of quality which might have actually appealed to fans of steampunk. Instead they decided to just mass produce copies of Laurie's items, which made them devoid of any creativity and individuality and they ended up looking cheap and tacky.

 

And this then speaks to another inherent problem and misunderstanding of the steampunk world. Steampunk is generally about your own creativity, not off the shelf items. Steampunkers pride themselves on making their own items, putting their own flair on things. This is what Laurie did. And this is what the Hornby range doesn't do. It corporatises and homogenises a hobby that is, for the most part, the opposite of that sort of thinking.

[Dunsignalling]

45 minutes ago, Ravenser said:

One point that is loosely related to the topic: commercial structure of TT:120 going forward.

 

Hornby is now selling TT:120 on a retail model quite similar to that used by their "new boy" competitors : the bulk of the sales direct online supplemented by a limited number of retail stockists. (In one or two cases the same model shop offers both TT:120 and AS or Cavalex...)

 

You could almost say there is a "TT:120" tier....

 

At the moment Hornby have about 8 UK retailers for TT:120 , whereas the "new boys" typically have 12-20 retailers. I suspect Hornby's retail base will enlarge over time - there was an interesting little episode where TT:120 pages appeared on Kernow's website then disappeared.. But they have included one major box-shifter in Gaugemaster , and in Germany they've made British outline TT:120 available to the four biggest German box-shifters  (and nobody else , so far as I know). It's not such a big step in Germany , since all four retailers will already be doing extensive business in 1:120 scale RTR for German and Eastern European outline, and no doubt carry the Arnold TT range

 

By and large the "new boys" here do not deal with box shifters, although Rails of Sheffield have sold some brands.

 

It was suggested that Hornby decided  to market TT:120 online not through model shops because they would have had to order an extra 300 + unkits of each set just to give each shop one set...

 

Ergo Hornby deal with over 300 model shops for model railways, and the true total will be higher since there are shops that don't stock Hornby (eg Rails of Sheffield).

 

Obviously those shops that stock Accurascale are not necessarily those that stock Rapido. (etc) Even so, its difficult to see the total number of retailers stocking one of the "new boys" being more than about 60-75. In other words perhaps 75% of all model shops do not sell them - those that do are a small subset of the retail trade

 

This is one good reason why the demise of Hornby would not be in the interests of the hobby. Maybe 3/4s of model shops would lose all their Hornby sales revenue, with nothing to replace it. That would surely make quite a few unviable . It does not seem unreasonable to suggest we would lose around a third of model shops if Hornby went bust. That is sobering - especially as many of Hornby's most hostile critics claim to be fighting in defence of the local model shop.  (It wouldn't be that much better if Bachmann went, for the record - although Bachmann would be much more likely to go the way of the Cheshire Cat)

 

But there does seem to be a general trend of a retreat towards a smallish core of retailers + direct online sales in the market place. It seems unreasonable to assume that Hornby can or will swim directly against this tide and single-handedly reverse it - especially when they need sales to get into the black and can't be over picky about where and how they get them

 

Which means the problem of retail channels, managing relationships and supplies to the retail trade, are ongoing and probably insoluble without someone losing out - whether Margate or some other party. Tiers may have gone but the commercial policy problems do not thereby disappear

 

Wow. You don't often see that many figures plucked out of thin air in one post. 🤣

 

[AY Mod]

1 hour ago, SulzerPeak said:

This sort of post seems to say you have to tow the line, obviously there has to be boundaries but seems a bit threatening?

 

It's not wise to make a name for yourself.

[Widnes Model Centre]

Sort of reverting back to the topic.

 

Repeating the fact that we certainly are glad the tier system has ended.

 
Would we stock TT120? Yes, it has been requested many times in our shop.

 

A model shop without Hornby, Airfix. Just wouldn’t be a model shop. 

Tomorrow, 30th January, is the last trading day for 2023. Just finished reviewing our overall sales. The outstanding product? Believe it or not, Paints.  Not obviously in £’s spent but in percentage sales increase. My wife Gill reckons we sell more paint than B and Q! Not going to lie, l just agree………

Since the start of the financial crisis we have seen modellers keen to actually make some models and finish them. Keeps their costs down and actually finish something! Without giving away too much of our sales figures as we don’t sell on line. Three days trading. Paints sold? £947.59p. Of which very little was Humbrol. Cements, varnishes etc are not great sellers anymore. 
The enamels remain fairly popular with those modellers who started using them when there was literally nothing else. Hornby have reduced their enamel range and replaced those colours with acrylics. As with model railway manufacturers increasing, the amount of paint manufacturers has exploded. Sorry to say any given paint is more popular than Humbrol. I don’t know what the profit and loss is regarding Humbrol, if it’s not great, l am not surprised. Maybe time to concentrate on other products?

 

Airfix have brought out some tremendous plastic kits this year and for the first time have gotten really close to Tamiya. Even reintroducing vintage kits using old moulds. Absolute winners, demand in some kits has been phenomenal. 
 

We are not big on diecast, but Corgi TV series from the 60’s have sold out on preorders. 
 

Good luck to Hornby in 2024, we have high hopes.

 

Edited December 29, 2023 by Widnes Model Centre
Clarification

[andyman7]

I agree that Airfix has managed some real crackers. Back in the 90s when owned by Humbrol/Heller. Airfix traded heavily on its tool bank, much of which was outdated. New models were restricted to maybe one new tool every other year. The transformation under Hornby had been impressive - not only has there been extensive investment in new tooling so that bread-and-butter items are state of the art, but by creating the Vintage Classics range they are getting great value out of their old tooling without diluting the value of their range - indeed quite the opposite. 
It would be good to see the same focus on consistent branding and expectations in the rail range but it shows it can be done

[CUCKOO LINE]

5 hours ago, Dunsignalling said:

 

Wow. You don't often see that many figures plucked out of thin air in one post. 🤣

 

According to rapido website 137 official retailers including several box shifters

[AY Mod]

5 hours ago, Dunsignalling said:

 

Wow. You don't often see that many figures plucked out of thin air in one post. 🤣

 

 

It's far from the first time he makes a load of stuff up and presents them as facts.

 

It annoys the hell out of me.

[Michael Hodgson]

3 minutes ago, AY Mod said:

 

It's far from the first time he makes a load of stuff up and presents them as facts.

 

It annoys the hell out of me.

Never mind.  It's not long till Hogmanay.  Have a good stiff drink!

[Baz657]

6 hours ago, Ravenser said:

 

 

Ergo Hornby deal with over 300 model shops for model railways, and the true total will be higher since there are shops that don't stock Hornby (eg Rails of Sheffield).

 

 

Rails have been Hornby stockists again for the past couple of months and are hoping to have TT:120 on their shelves early next year (they’ve already sold a few secondhand TT:120 items).

[BachelorBoy]

12 hours ago, Michael Hodgson said:

Perhaps you need to look for a more satisfying job?

A fair point. 

 

Actually I really enjoy my job,

 

But Xmas to New Year is always rather dull.

 

And I would be prefer to be at home instead of travelling, eating excess food with the family, and sleeping it off. :-) 

 

And perhaps, even, doing some modelling. 

 

 

[BachelorBoy]

5 hours ago, AY Mod said:

 

It's far from the first time he makes a load of stuff up and presents them as facts.

 

It annoys the hell out of me.

 

Does anyone know of a reliable source of facts and figures (or even competently produced estimates) about the hobby in the UK, and further afield?

 

Stuff like:

 

• How many railway modellers are there?
• What's their average spend?
• What's their breakdown by age and area?
• How many people use DCC, and how many use DC (and other things like battery power, or even clockwork)?
• What's the breakdown between the scales, eras, geographical settings (both home and abroad)?
• How many model shops are there?
• How many clubs are there?
• How many members do they have?

 

And, of course, how those figures have changed over the years so we can get an idea of trends.

 

The Guinness Book of World Records was started to help settle arguments. Something similar for the model railway business would be great.

 

 I'm sure the big boys have lots of such information, but more information out in the public domain would help smaller companies identify opportunities and avoid mistakes.

 

 

 

 

 

[AY Mod]

32 minutes ago, BachelorBoy said:

Does anyone know of a reliable source of facts and figures

 

Have a look for surveys done on this site.

[adb968008]

1 hour ago, BachelorBoy said:

 

Does anyone know of a reliable source of facts and figures (or even competently produced estimates) about the hobby in the UK, and further afield?

 

Stuff like:

 

• How many railway modellers are there?
• What's their average spend?
• What's their breakdown by age and area?
• How many people use DCC, and how many use DC (and other things like battery power, or even clockwork)?
• What's the breakdown between the scales, eras, geographical settings (both home and abroad)?
• How many model shops are there?
• How many clubs are there?
• How many members do they have?

 

And, of course, how those figures have changed over the years so we can get an idea of trends.

 

The Guinness Book of World Records was started to help settle arguments. Something similar for the model railway business would be great.

 

 I'm sure the big boys have lots of such information, but more information out in the public domain would help smaller companies identify opportunities and avoid mistakes.

 

Theres no one source for that and no data would be accurate.

However some digging can give some indications….

 

Q. How many clubs are there?

Answer

https://www.ukmodelshops.co.uk/clubs/T/Exhibition
The website says

Quote

Providing contact details for 582 Local, National and some International Clubs and Societies.

Though when I counted the list I found 289 clubs listed.

 

Q. How many model shops are there?

 

Answer

https://www.ukmodelshops.co.uk/modelshopsAZ/A/AZ

The website says 

Quote

Total Shops Listed : 418

Though bear in mind a model shop could include things like arts supplies, architectural modelling and non-model railway shops.

Q. How many railway modellers are there?

This is a piece of string, defining what makes a railway modeller.

 

How many start as a 4 year old with a Hornby trainset and still have it 40 years later as not much more ?

How about railway industry employees who buy just one or two items reflecting time at work and go no further ?

Collectors, who spend disproportionately more, but never run them ?

Then adhoc modellers who just dabble occasionally ?

Its a very broad brush.

 

There was a thread on this which talks about this…ive pulled @AY Mods take on the stats…

 

Quote

My reasonable estimate, for quite a time, has been that there are somewhere between 100,000 and 200,00 active modellers (however defined) in the UK

 

Q. What's their average spend?
 

That really is a question. 

 

This guy spent £20k, though i ‘d wager for the wrong reasons.

https://www.telegraph.co.uk/money/investing/spent-20000-model-trains-will-fund-retirement/

various websites suggest between £500 and £2k a year.

 

Ive two A4’s that landed last week costing me £600, and two Boosters just got charged to my card yesterday, so theres £1k this month.

if you look at the big players reporting at companies house…

 

Hornby c£55mn

Peco ( and group) c£15m

Bachmann £16mn

 

With over 200 micro companies out there, plus players like Accurascale, Dapol, Gaugemaster and Heljan being small enough not to report full accounts it would suggest an industry hovering around the £100m mark, bearing in mind some of these companies diversify into non railway interests etc.

 

Also bear in mind this is trade price, excludes vat and retail margins

 

From here is pure speculation on my part but..

 

a. If you assume 20% margin and 20% vat.. so £140mn retail turnover..

b. if an average person spends £1000 (£500 low, £2k high), (i’m going to assume inc vat and margin) 

 

That suggests around 140k modellers, which is almost in the middle of @AY Mod’s range of between 100k and 200k active modellers.

 

Q. What's their breakdown by age and area?
 

This to me is the important question, that determines the future of the hobby.

my personal feeling is there is too much focus on catering to the older demographic, who have easier access to disposable funds.

This is short term, and what several elude to as a the pending doom event.

 

Where are these located.. if you look at Club dispora theres 3 distinct areas… South (East and West) within an hour from London, around the Midlands and North West.

 

However “on the street”, i see no shortage of younger enthusiasts, whats more they dont fill the sterotypes, my daughter is now approaching 7 years as an enthusiast.. there are much more females in the hobby, and in the cab then when I was a kid. Theres also a lot of non-white male enthusiasts out there, especially chasing units and 800’s.

 

They interact with the hobby increasingly via social media, Francis Bourgeois has 2m followers.

 

Simulators replace models due to cost and supply… over christmas my daughter brought me her ipad and let me drive a class 142 on Roblox…and asked if there will ever be a new model of a 142 (and theyve been gone 3 years now already). You can also navigate LSL Crewe depot on Roblox. Roblox exploded since 2016, same year the new model was announced.

 

The manufacturers imo just aren't catering to the younger generation, its a decision theyve made and will decide their future., but it wont end the hobby, but it will change the dynamic of it with or without them.

 

 

 

Edited December 30, 2023 by adb968008

[Markwj]

Didn’t the recent Pete Waterman TV show suggest at the start the hobby was worth £20 million per year although no suggestion how that figure was reached or what it comprises I assumed just sales.

Going back to the tiers and Hornby I am really looking forward to the new years announcements as it could give an indication of how things are going to be moving forward. The abolishment of the tiers is a good step along with the repair of the relationship with rails of Sheffield. 

 

[adb968008]

23 minutes ago, Markwj said:

Didn’t the recent Pete Waterman TV show suggest at the start the hobby was worth £20 million per year although no suggestion how that figure was reached or what it comprises I assumed just sales.

Going back to the tiers and Hornby I am really looking forward to the new years announcements as it could give an indication of how things are going to be moving forward. The abolishment of the tiers is a good step along with the repair of the relationship with rails of Sheffield. 

 

Maybe he meant £200mn… Hornbys turnover is £55mn, thats ignoring everyone else and the retail end sales price too).

 

its worth considering that West Coast Railways have a turnover of £11mn, and despite being the largest mainline operator of railtours has a turnover less than Bachmanns at £16mn… the SVR has £6mn, Bluebell £4mn… the model railway hobby is larger than the heritage railway sector.

 

 

 

 

Edited December 30, 2023 by adb968008

[AY Mod]

1 hour ago, AY Mod said:

 

Have a look for surveys done on this site.

 

 

[Markwj]

1 minute ago, adb968008 said:

Maybe he meant £200mn… Hornbys turnover is £55mn, ignoring everyone else and the retail end ?

Thanks, not sure it was the voice over guy at the start of each episode so it seemed to indicate the sales as a whole not just Hornby. Perhaps I have misremembered it (too much liquid stuff over Christmas).

 

[The Stationmaster]

22 hours ago, BachelorBoy said:

 

Every model railway magazine editor has skin in the game in wanting Hornby to survive: who wants an advertiser to go broke? :-)

 

I look forward to reading the interview.

 

Assume for a moment the new management's got the right ideas about the big picture ... but do they have the skills to implement them?

 

I worked for a big organisation a while back. The new head honcho, to my mind, had exactly the right ideas about strategy and how the organisation had to adapt. 

 

But he was a bit of smart-arse robot and had no idea how to communicate to workers and management why the changes were needed, let alone how they were to be made.

 

So it didn't end well.

 

 

A lot will always depend on people and their attitude and communication within the company, or whatever it is they are managing.  The top man seems to be creating a good wider impression with some retailers from what I have heard.  But he obviously has to back up words with action and that depends ion the management structure he has created and the people within it as well as his ability to manage.  

 

Time will tell is all we can say at this stage.  But at least given a decent management structure, hopefully putting the right sort of people into the right jobs in that structure, and recognising what the company needs to do while giving the various experts within the company the impetus and support they need, is a good starting point in my experience.

[cctransuk]

Deleted.

Edited December 30, 2023 by cctransuk

[The Stationmaster]

5 hours ago, adb968008 said:

Maybe he meant £200mn… Hornbys turnover is £55mn, thats ignoring everyone else and the retail end sales price too).

 

its worth considering that West Coast Railways have a turnover of £11mn, and despite being the largest mainline operator of railtours has a turnover less than Bachmanns at £16mn… the SVR has £6mn, Bluebell £4mn… the model railway hobby is larger than the heritage railway sector.

 

 

 

 

Don't forget that Hornby's revenue is not all model railways although we don't know the split by brand as they haven't published it for a long while.  

 

As a starting point their UK external revenue at most recent year end, 31 Match 2023, was £39,617,000.  The £55 million was their worldwide total external revenue.    And thatt £39 million included all brands, not just model railways.   So we now need to get at - if we can - model railway sales.   Hornby's 2017 Annual Report was the last to publish numbers by some of the brands - its total model railway sales amounted to £22 million, part of total revenue of £47.4 million.  BUT only 45% of that £22m was from UK sales - in other words Hornby's UK model railways sales in 2017 were less than £10 million (Bachmann Europe's nearest equivalent year end had a turnover of £15 million but that was not a UK model railway sales total as that formed only part of it).

 

So if we look at total numbers of its sales noted by brand in 2017 model railways contributed less than half.  If we roll that forwatd to year end 2023 and don't allow for any change in percentages by brand that means that Hornby's total model railway sales in year end 2023 were less than £27 million (they needed to reach £27.4 million to match inflation from 2017).  Of course we don't know if brand percentages have changed and we don't know if percentages by geographical area have changed but IF all the percentages are constant and we work on £27million mode railway total sales that gives Hornby UK model railway total sales of £12.38 million.

 

More worryingly to match their (loss making) 2017 total revenue this year their total revenue should have been £59.09 million.  So in some respects it does't matter what we think the model railway number might be.  What matters - seriously in my view - for Hornby is that its overall revenue growth has not kept pace with inflation.  In other words apart from real losses showing in its accounts it has effectively faced an overall decline in sales revenue this year was  c.8% down on 2017.

 

 

 

 

[GWR-fan]

When one has more choice then it stands to reason that what was once an almost monopolistic market is now wide open with far more choice these days then just a few years ago.     I fail to see how the company could increase market share or even remain the same when there is far greater choice for the consumer.  Hornby has its hardcore followers and is still recognised as being  an iconic tradename,  but the consumer has a better choice now of locomotive types and rolling stock that Hornby have not manufactured previously or have been duplicated.   The consumer now determines the market by exercising brand choice rather than being hamstrung previously with a limited number of manufacturers to choose from.  Hornby's future relies not just on the product it manufactures but just as importantly on how that product is marketed.

 

[BachelorBoy]

Thank you everyone. Very helpful

 

As 

[adb968008]

I’d take a punt at suggesting the biggest retailer of model railways is ebay.

 

Its getting close to a million items a year in the 00 category, and a large share of the s/h market… today c180k items listed, c180k items sold in the last 90 days and c90k are new/buyitnow. .. c50/50 split new to used.

 

its not a perfect indicator, as some will be private sellers, selling an older model “as new” but when looking at locos for auction its only c4000, (from c35k loco listings) which maybe reflects time of year, but ive seen 40k locos before now.  The retail trade has considerably increased there ebay presence, but s/h selling of locos in auction at atm is low, much lower than covid.

 

I have found around the time of a new release it brings a flurry of activity, people raising cash, trading up etc

 

 

 

Edited December 31, 2023 by adb968008

[Dunsignalling]

1 hour ago, adb968008 said:

I’d take a punt at suggesting the biggest retailer of model railways is ebay.

 

Its getting close to a million items a year in the 00 category, and a large share of the s/h market… today c180k items listed, c180k items sold in the last 90 days and c90k are new/buyitnow. .. c50/50 split new to used.

 

its not a perfect indicator, as some will be private sellers, selling an older model “as new” but when looking at locos for auction its only c4000, (from c35k loco listings) which maybe reflects time of year, but ive seen 40k locos before now.  The retail trade has considerably increased there ebay presence, but s/h selling of locos in auction at atm is low, much lower than covid.

 

I have found around the time of a new release it brings a flurry of activity, people raising cash, trading up etc

 

 

 

 

There are plenty of exhibition and swap-meet dealers in pre-owned items, too; including some that maintain watch-lists for regular clients, and who may also trade via eBay. 

 

Some shift considerable amounts of stock "off-line", and those sales are unlikely to figure in any analysis.

 

John

[GMKAT7]

Good afternoon folks,

 

I have just counted up the locos I have acquired this year at an all-time high of 14, with 4 others on pre-order for 2024/5.

 

If those 14, only 4 are new and only 1 of the new ones is Hornby, a 61xx obtained from TMC in a recent sale. The rest are eBay acquisitions, mostly second-hand.

Edit: the majority of the newly-acquired locos are Bachmann. However, there are a number of Hornby items in the rolling stock category e.g. WR brake vans, Gresley coaches, etc that I have bought this year but again all eBay buys.

 

All are in good working condition so, to me at least are bargains.

 

Cheers, Nigel.

Edited December 31, 2023 by GMKAT7
Added info.