Hattons Model Railways to close

[kevinlms]

1 minute ago, johnofwessex said:

It seems to me that the obvious losers are going to be British outline modellers abroad which in turn suggests that there is a business opportunity somewhere.

 

Given that many UK suppliers are either owned abroad  = Bachmann or have European brands - Hornby  setting up a EU based shop may be quite straightforward

It shouldn't be that difficult. Prices just need to be set up as VAT free, plus whatever compliance costs, including P&P and any tax required. If a modeller wants an item, there will be a price.

 

Just in case no one has thought about it, retailers overseas will have exactly the same additional expenses importing the stuff to sell. And yes, there are retailers who sell British outline model railways.

[adb968008]

I think the winner will be ebay sellers open up to intl sales.

 

or if “mailboxes etc” have parcel drop/forwarding.

 

i’m not convinced model shops will get a windfall from Hattons demise, I think the hobby is having a bit of post covid attrition myself. 

 

 

Edited February 4 by adb968008

[St Enodoc]

24 minutes ago, johnofwessex said:

It seems to me that the obvious losers are going to be British outline modellers abroad which in turn suggests that there is a business opportunity somewhere.

 

Given that many UK suppliers are either owned abroad  = Bachmann or have European brands - Hornby  setting up a EU based shop may be quite straightforward

I don't think we'll lose out as far as new items are concerned. The biggest change will be the loss of the second-hand "shop".

[St Enodoc]

12 minutes ago, adb968008 said:

I think the winner will be ebay sellers open up to intl sales.

Not with the Global Shipping Program, they won't.

[Oldddudders]

19 minutes ago, adb968008 said:

 I think the hobby is having a bit of post covid attrition myself. 

Certainly I am being bombarded with offers from one retailer, and a well-liked manufacturer is making generous offers, uniquely on unspecified products. 

[Widnes Model Centre]

Without going through 43 pages. Has it been highlighted about the knock on effect from the disappearance of Hattons purchasing power?

Who is going to buy from UK suppliers in the way they did? We all know stocks of Hornby were lower than they used to be, that bridge seems to have been mended, albeit possibly too late. PECO, Gaugemaster and many other suppliers had huge amounts of stock listed on Hattons website. Who will take up the mantle with those companies?

 

As for ourselves? We are in a bit of an argument with some sections of the local media who announced that Widnes was losing its local model shop. To some customers, that  was our shop. Security at the local shopping centre advised one customer asking for directions that the model shop had closed. Thankfully she decided to telephone us to find out that we were still open for business.

 

In relation to EU purchasing. Our only supplier was based in Scandinavia. Paperwork from the government arrived in piles. EORI’s. Customs declarations, appointment of shipping and handling agents, VAT etc. We were quoted £93 per consignment to administer our paperwork. On a low profit margin it wasn’t worth it. We haven’t brought anything in from the EU since. 

Edited February 4 by Widnes Model Centre

[andyman7]

It's an interesting one. As a consumer, there still appear to be retailers that will do a deal for overstocks of certain items - we see these in the bargain offers that appear every so often for items that have been in the catalogue for a couple of years or so. Bachmann are presumably unaffected. Gaugemaster is a distributor in its own right so it will depend on the degree to which Hattons picked up the cash flow management of stock items and I guess Peco, with its agency lines, is not dissimilar. 

[Gridiron]

1 hour ago, johnofwessex said:

It seems to me that the obvious losers are going to be British outline modellers abroad which in turn suggests that there is a business opportunity somewhere.

 

Given that many UK suppliers are either owned abroad  = Bachmann or have European brands - Hornby  setting up a EU based shop may be quite straightforward

 

This opportunity has already been taken by the likes of Amazon albeit it probably does not cater for the more serious trade I suspect it may satisfy first time buyers looking for a train set for little Tommy's Birthday or Christmas present.

 

This brings me back to the concept of having a dedicated platform for the hobby with the ability to hold stock in several locations around the world on behalf of the major suppliers as well as smaller nationally based suppliers and retailers. Like Ebay the site could have an auction option for preowned items, or a buy now option, but have the ability to trunk for items purchased from the same country if the stock is held is in the platforms fulfilment warehouse. For example Hornby could have all it's UK stock and brands delivered to the warehouse, with each retailer given an allocation of the stock as now and a balance of unsold items. The retailers then can opt to hold some stock on their premises or hold the stock in the warehouse. Like Ebay and Amazon the site would provide sellers shops on the platform, or alternatively orders could be packed and labelled at the fulfilment warehouse by a simple electronic link from  sellers website. Private sellers of preowned items, could use the platform like Ebay to sell their items or have the option of having it processed through the warehouse which then would allow trunking. It would be a massive job to set up, but with much of the website part technology already in place and proven, the big task would be gaining the support of the sellers and perhaps a suitable fulfilment party.

 

   

 

 

[adb968008]

1 hour ago, Widnes Model Centre said:

In relation to EU purchasing. Our only supplier was based in Scandinavia. Paperwork from the government arrived in piles. EORI’s. Customs declarations, appointment of shipping and handling agents, VAT etc. We were quoted £93 per consignment to administer our paperwork. On a low profit margin it wasn’t worth it. We haven’t brought anything in from the EU since. 

Hattons used to do ok for HO in the UK too, especially in s/h. 
However it can’t help but be noticed how pricing of HO has become uncompetitive in the UK generally for instance…

 

this Vectron Dual in Europe.. has an rrp at Piko of 199 Euro (£169)

 

https://www.piko-shop.de/en/artikel/e-lok-diesellok-dual-mode-br-248-mkb-vi-41809.html

 

has a UK RRP of £200 at the UK importer..

 

https://www.gaugemasterretail.com/piko-51164-expert-mkb-br248-electric-locomotive-vi.html

 

Despite the £30 positive difference in forex right now.

 

Interesting that a brand new 2024 tooling of the dual (diesel/electric) Vectron hybrid carries an rrp cheaper than most UK manufacturers announcements too.

 

 

Hattons used to pull some right oddities in HO like this one i missed..

 

https://www.hattons.co.uk/811698/modelasia_cr400af_1001_cr400af_high_speed_8_car_emu_1001_of_the_china_railway/stockdetail
 

 

Edited February 4 by adb968008

[osbornsmodels]

Quote

Widnes stated "Who is going to buy from UK suppliers in the way they did? We all know stocks of Hornby were lower than they used to be, that bridge seems to have been mended, albeit possibly too late. PECO, Gaugemaster and many other suppliers had huge amounts of stock listed on Hattons website. Who will take up the mantle with those companies"?

Nobody and with shop stocks at an all time high plus manufacturers/distributers bombarding the consumer on a daily basis with offers in desperate attempts to move surplus stocks we have moved into very interesting times. 

[Widnes Model Centre]

1 hour ago, andyman7 said:

It's an interesting one. As a consumer, there still appear to be retailers that will do a deal for overstocks of certain items - we see these in the bargain offers that appear every so often for items that have been in the catalogue for a couple of years or so. Bachmann are presumably unaffected. Gaugemaster is a distributor in its own right so it will depend on the degree to which Hattons picked up the cash flow management of stock items and I guess Peco, with its agency lines, is not dissimilar. 

Interesting point of view. Retailers doing deals for overstocks or suppliers clearing their warehouses of slow moving inventory?

 

Most people are of the view that Bachmann won’t be affected. When Hattons stopped being able to supply Bachmann, you would be forgiven for thinking that our Bachmann sales would have increased. They didn’t. Bachmann  appeared  to reduce the quantity of items that were manufactured. Sold out became the order of the day. Hypothetically, with the main retailer leaving the market, does that leave the likes of our shop with an increase in say PECO, Dapol, Gaugemaster demand? Money is finite so do l have to spend even less with Bachmann in order to finance the purchases from other suppliers. 
 

As Osborne Models state, ‘interesting time’s ahead’.

[JohnR]

21 hours ago, kevinlms said:

But there is no evidence that is true. Why would a business take a regular loss? It makes no sense at all. Short term possibly, when changes occur, but ongoing no.

 

 

It was literally one of the reasons they gave. 

 

Quote

Increased cost of compliance has become a large factor. Brexit, GST and other operational costs of running an international business have all increased dramatically over the past few years.

 

[1andrew1]

16 minutes ago, Widnes Model Centre said:

Interesting point of view. Retailers doing deals for overstocks or suppliers clearing their warehouses of slow moving inventory?

 

Most people are of the view that Bachmann won’t be affected. When Hattons stopped being able to supply Bachmann, you would be forgiven for thinking that our Bachmann sales would have increased. They didn’t. Bachmann  appeared  to reduce the quantity of items that were manufactured. Sold out became the order of the day. Hypothetically, with the main retailer leaving the market, does that leave the likes of our shop with an increase in say PECO, Dapol, Gaugemaster demand? Money is finite so do l have to spend even less with Bachmann in order to finance the purchases from other suppliers. 
 

As Osborne Models state, ‘interesting time’s ahead’.

 I can appreciate why Bachmann might have been risk averse and reduced production run volumes; they could anticipate Hattons' customers spending more on non-Bachmann brands as these are what Hattons would promote. 

But I would have expected  a lot of Bachmann spend to have been re-directed to other big box retailers, along with non-Bachmann accessories. This reduction in sales would likely have contributed to Hattons deciding to close. 

[kevinlms]

51 minutes ago, JohnR said:

 

It was literally one of the reasons they gave. 

 

 

Where does it suggest that those additional costs can't be passed on?

[Widnes Model Centre]

25 minutes ago, 1andrew1 said:

 I can appreciate why Bachmann might have been risk averse and reduced production run volumes; they could anticipate Hattons' customers spending more on non-Bachmann brands as these are what Hattons would promote. 

But I would have expected  a lot of Bachmann spend to have been re-directed to other big box retailers, along with non-Bachmann accessories. This reduction in sales would likely have contributed to Hattons deciding to close. 

If the Bachmann spend was redirected to other big box retailers, how much did all retailers take up is the real question?

 

The difference now is that the really big buyer has left the market. If Hattons purchases were steadily in the region of £8/9 million annually is the whole of the trade, never mind the big guys going to take up that that sort of financial risk?
 

Ever increasing costs would make any retailers think more than twice in hugely increasing their annual spend. 
 

Not forgetting we are in a time of massive financial crisis.  
 

Hattons made their reasons for closing abundantly clear. Any retailer deciding to take over would potentially find themselves in the same situation. 
 

The real losers, in  trade terms could well be all the suppliers. 
 

Don’t think of these posts as a negative outlook for the model railway industry. We firmly believe that the light is still on at the end of the tunnel. 

[JohnR]

6 minutes ago, kevinlms said:

Where does it suggest that those additional costs can't be passed on?

 

Presumably the fact that they are closing, rather than passing on those costs suggests that their opinion is that they couldn't be passed on. Likewise, they could simply have said that they wont dispatch to Australia, or even anywhere abroad. 

[jjb1970]

Bachmann seem to basically do their own thing. They announce models when they're almost on the shelves (ten out of ten for that approach from me) after a lot of criticism for late delays, have good customer service in my experience and communicate well without getting involved on forums and such like. They have a strong record of supporting retailers and strike me as the sort of company that just goes about its business in a professional way. If you like their products buy them. If you don't, buy something else. Personally I think there's a lot to be said for that. Given their footprint in the UK market I find it hard to believe losing their account didn't have a significant impact on Hattons. On distribution, I'd have thought in a market like model trains whether they distribute a model to 4,6,8 or whatever number of retailers won't alter demand for that model by that much.

[jjb1970]

25 minutes ago, JohnR said:

 

Presumably the fact that they are closing, rather than passing on those costs suggests that their opinion is that they couldn't be passed on. Likewise, they could simply have said that they wont dispatch to Australia, or even anywhere abroad. 

 

I'm not sure how they'd arrive at that conclusion. For models falling within the overseas VAT/GST payment requirement passing the costs on would obviously impact pricing, but it should be more attractive for customers than paying the post offices and having handling charges on top, waiting for the post office to process the customs clearance etc. I'd guess most people will price in the VAT/GST cost when looking at prices and make a decision based on total cost (well, that's what I do and always did in the UK).

[JohnR]

7 minutes ago, jjb1970 said:

 

I'm not sure how they'd arrive at that conclusion. For models falling within the overseas VAT/GST payment requirement passing the costs on would obviously impact pricing, but it should be more attractive for customers than paying the post offices and having handling charges on top, waiting for the post office to process the customs clearance etc. I'd guess most people will price in the VAT/GST cost when looking at prices and make a decision based on total cost (well, that's what I do and always did in the UK).

 

I'm not sure either, but then they are in possession of much more information on this than I am. If it was as simple as just passing the cost on, then it wouldn't have been an issue affecting the business enough for it to make them close it down. 

[Gridiron]

The problem of manufacturers and distributes overstocking in not unique to the model train or toy industry, it's a global problem that affects most western economies since the pandemic when governments pumped billons of US Dollars, Pounds and Euro's into their domestic markets to keep their countries economies functioning. With so many people working from and some making life changing decisions to their life style manufacturers and distributors naturally wanted to take advantage of this disposable income which could no longer be spent on traditional forms of entertainment and holidays although it was not universal. Some markets, like garden furniture and other relatively low value products became relatively scarce as it was no longer viable to ship these goods when shipping costs for a 40ft containers from China to Europe were approaching USD20000.00 a container, if you could secure the space, over five times the cost prior to Covid outbreak. 

 

Desperate, to secure supplies from their Chinese manufacturers many western organisations increased their orders or quantities but with the Chinese still enjoying lockdowns well after the western economies had mainly returned to normal trading patterns there were huge stocks still being shipped throughout 2021 and 2022.    As the Covid restrictions were eased Governments and Central Banks started to develop plans to reduce the debt burden brought on by various Covid schemes and curb inflation which had returned to every economy as a result of release of those huge sums of money released into economies to counter the effects of Covid. 

 

By this time last year the cost of shipping had reduced dramatically and by the late summer the rates had fallen to below Covid levels largely because volume of orders from China had dropped significantly as manufacturers and distributors began to realise that they had huge stocks of unsold product sitting in warehouses in many western countries, including the UK. Successive monthly  rises in interest rates were beginning to reduce consumer spending so it was inevitable that this would ultimately affect sales on the high street and especially in those businesses not involved in essentials. 

 

One interesting and often neglected fact is the huge profits made by the shipping companies during the pandemic, which apart in the USA has gone largely unnoticed by the regulators etc. The numbers are mind blowing and whilst the industry does tend to suffer from peaks and troughs the figures for the Covid period are breaktaking.  To give one example, MSC which is now the largest containership operator in the world was able to acquire in the last two years over 300 ships in secondhand market to add to their existing fleet, hence why they are now number one. But it does not end there. They also have a order book for new ships equivalent to about the size of the fifth placed carrier Hapag Lloyd and that's in addition to investments in logistics and airfreight were they continue to trade under the subsidiary name.  Most of the global carriers have followed a similar policy on newbuilds partly in order to comply with new emission rules and allow older tonnage to be scrapped. As a result there is likely to be over the next couple of years a huge surplus of tonnage which is why when the  attacks in the Red Sea  started and the ship started to divert via the Cape the shipping lines were able to fill much of the gaps in capacity fairly quickly from idle capacity anchored off China and rejigging some services. Whilst initially rates spiked, there are signs already they are beginning to drop as the supply chain repairs itself and the overall trend over the next couple of years should be more stable as the lessons have been learnt.

 

 

 

 

 

 

[br-nse-fan]

5 hours ago, kevinlms said:

And yes, there are retailers who sell British outline model railways.

 

Yes, there are.. but they are becoming fewer and fewer in numbers.  Not 10 years ago, there was probably a half dozen retailers that you could reliably get UK outline from here in Canada.

Now, with the Canadian distributor for Hornby closing their doors, there is no longer a means to get Hornby in Canada, through a Canadian retailer.  I believe this has been discussed previously in this thread, but Hornby have all but refused to find or work with other shops to replace them.

 

So while yes, there are certainly the ways and means for us overseas customers to continue to get items, it certainly won't be easy nor will the cost to do so be as consumer friendly as Hatton's has made it over the years.

[kevinlms]

59 minutes ago, JohnR said:

 

Presumably the fact that they are closing, rather than passing on those costs suggests that their opinion is that they couldn't be passed on. Likewise, they could simply have said that they wont dispatch to Australia, or even anywhere abroad. 

But your still making the assumption that Hattons closed down BECAUSE of overseas sales. Reading this thread reveals that large numbers of customers were in the UK. 

[JohnR]

2 minutes ago, kevinlms said:

But your still making the assumption that Hattons closed down BECAUSE of overseas sales. Reading this thread reveals that large numbers of customers were in the UK. 

 

I'm not making any such assumption - I am literally quoting them saying that it was one of the reasons for their decision to close. 

[kevinlms]

8 minutes ago, br-nse-fan said:

 

Yes, there are.. but they are becoming fewer and fewer in numbers.  Not 10 years ago, there was probably a half dozen retailers that you could reliably get UK outline from here in Canada.

Now, with the Canadian distributor for Hornby closing their doors, there is no longer a means to get Hornby in Canada, through a Canadian retailer.  I believe this has been discussed previously in this thread, but Hornby have all but refused to find or work with other shops to replace them.

 

So while yes, there are certainly the ways and means for us overseas customers to continue to get items, it certainly won't be easy nor will the cost to do so be as consumer friendly as Hatton's has made it over the years.

Part of the problem is the same as effected Hattons, much of the new manufacturers, sell direct only and not through retailers at all.

Does it make a difference, you bet it does, when that part of the hobby is the upper end. 

Edited February 4 by kevinlms
Auto correct changed Hattons twice to Halton - whoever they are!

[kevinlms]

2 minutes ago, JohnR said:

 

I'm not making any such assumption - I am literally quoting them saying that it was one of the reasons for their decision to close. 

ONE reason not THE reason. 

 

If they really weren't charging overseas customers, the true costs, then they only have themselves to blame and not the end buyer.