Hornby Trading Results

[The Stationmaster]

It looks like Hornby are having second thoughts about some areas of their 2011 pricing policy - according to Kernow's newsletter the prices of the new brakevan and tippler wagon are being reduced although I don't know if the prices quoted by KMRC are their own price or the revised RRP (I presume the former). Looks as if the market might have spoken and the small number of orders some retailers told me they were placing has sent a message to Margate.

[craigwelsh]

It looks like Hornby are having second thoughts about some areas of their 2011 pricing policy - according to Kernow's newsletter the prices of the new brakevan and tippler wagon are being reduced although I don't know if the prices quoted by KMRC are their own price or the revised RRP (I presume the former). Looks as if the market might have spoken and the small number of orders some retailers told me they were placing has sent a message to Margate.

Its still £12 for a brake and £9 for a tippler at Hattons following the reduction. Compare that to Bachmann products at £7 and £7.

 

The Hornby items are probably a little more polished but these are items for the modeller who knows all about Bachmann too and not the trainset buyer. I wonder if the difference reflects the cost of having to manufacture via a 3rd party for Hornby vs the in house costs Bachmann enjoys? There is also the cost of newer tooling.

 

Personally though I think its a poor set of choices to try to directly compete with very similar existing models instead of going for older tools of something different. A Stanier brake and maybe a 21t mineral wagon for example.

[The Stationmaster]

Its still £12 for a brake and £9 for a tippler at Hattons following the reduction. Compare that to Bachmann products at £7 and £7.

 

The Hornby items are probably a little more polished but these are items for the modeller who knows all about Bachmann too and not the trainset buyer. I wonder if the difference reflects the cost of having to manufacture via a 3rd party for Hornby vs the in house costs Bachmann enjoys? There is also the cost of newer tooling.

 

Personally though I think its a poor set of choices to try to directly compete with very similar existing models instead of going for older tools of something different. A Stanier brake and maybe a 21t mineral wagon for example.

 

 

 

Quite agree - I still can't understand the rationale of Hornby choosing the BR standard brakevan when several 'Company' types are still crying out for quality reproduction. As for the Bachmann competition angle/relative pricing I think, as I said originally, that the real driving force might have been poor orders - one retailer I know said that he had only ordered a couple while another, albeit with a smaller customer base, had only ordered one while a third had, I understand ordered a few more than that but almost all of them would be going to pre-orders from collectors. If that pattern had repeated across the retail market, especially the box shifters, I think Hornby would have finished up with some well deserved egg on their face in respect of at least part of this year's pricing policy.

[Ozexpatriate]

Quite agree - I still can't understand the rationale of Hornby choosing the BR standard brakevan when several 'Company' types are still crying out for quality reproduction.

With the evidently strong following for BR liveried items the pendulum seems to have swung hard against pre-nationalisation models. Even though a 'big-four' brake van could be offered in at least two liveries, (pre- and post-nationalisation), the prevailing marketing wisdom seems to be to focus on post-1947.

 

Of course I am making a sweeping generalisation here and there are certainly many exceptions, but there does seem to be a prevailing trend.

 

As for the Bachmann competition angle/relative pricing I think, as I said originally, that the real driving force might have been poor orders - one retailer I know said that he had only ordered a couple while another, albeit with a smaller customer base, had only ordered one while a third had, I understand ordered a few more than that but almost all of them would be going to pre-orders from collectors.

I agree. Hornby knew what Bachmann's prices looked like when they set their pricing at the beginning of 2011.

 

For myself, I haven't yet placed any orders for the new items to be introduced this year. I'm not sure exactly why, but sticker shock along with procrastination allowing for the fact that it would be a while before anything materializes, might be factors.

[Pennine MC]

Its still £12 for a brake and £9 for a tippler at Hattons following the reduction. Compare that to Bachmann products at £7 and £7.

 

The Hornby items are probably a little more polished but these are items for the modeller who knows all about Bachmann too and not the trainset buyer.

 

As you say Craig, both are still more expensive and the Hornby advantages will only matter to a relatively small segment of the market. To the likes of us, the brake will have the advantage of finer (and straighter!) handrails than the Bachy, but then Uncle Graham and Uncle Merl could easily decide to upgrade their own (I'm sure their new SR brake will have better handrails, and its RRP is only £12.40 against Horny's £13.99, so you'd expect an upgraded BR van to be either the same, or less). As to the tippler, as I've said before it will have the big advantage of having the correct and distinctive brakegear - to the likes of me, that's worth the 20% or so rather than fiddle about with kit parts. That said, I'm still not certain whether Hornby's tippler is the high or low body variant, it's hard to tell from the photos I've seen. But neither body height nor brakegear will matter overmuch to the casual buyer, and it also has to be asked just how good a seller a rather boring steel box will be in the general market.

 

Personally though I think its a poor set of choices to try to directly compete with very similar existing models instead of going for older tools of something different. A Stanier brake and maybe a 21t mineral wagon for example.

 

Hornby have a very good chassis for a 21T min or hopper, from the Rudd/Clam/Tope. The likelihood though of them employing that sort of joined up thinking is pretty unlikely IMO, and TBH I could easily live without the hopper if it was as clunky as the Tope

 

As for the Bachmann competition angle/relative pricing I think, as I said originally, that the real driving force might have been poor orders - one retailer I know said that he had only ordered a couple while another, albeit with a smaller customer base, had only ordered one while a third had, I understand ordered a few more than that but almost all of them would be going to pre-orders from collectors. If that pattern had repeated across the retail market, especially the box shifters, I think Hornby would have finished up with some well deserved egg on their face in respect of at least part of this year's pricing policy.

 

I'd agree, it's a clumsy adjustment to the original stance and whilst welcome, merely confirms their overall 'policy' is a clutch of muddled and unrelated strategies. I would remind folk though about their OTAs, these are an excellent model and IMO were almost certainly priced from the off to undercut the forthcoming Bachmann equivalent.

 

With the evidently strong following for BR liveried items the pendulum seems to have swung hard against pre-nationalisation models. Even though a 'big-four' brake van could be offered in at least two liveries, (pre- and post-nationalisation), the prevailing marketing wisdom seems to be to focus on post-1947.

 

Of course I am making a sweeping generalisation here and there are certainly many exceptions, but there does seem to be a prevailing trend.

 

 

I agree with the assesment Oz but I dont think it applies to the brakevan argument - a revised Stanier van, or a Toad that actually represents one diagram rather than bits of several, would both score well with BR modellers (one on longevity, the other on the GW classicity factor)

[brushman47544]

Pricing policy aside, I am not surprised to see a new BR 20T Brake Van in the Hornby range. There are some vehicles that no "range" of models can be without and a Brake Van is one of them - all freight trains (except those made up with modern air braked wagons) need one. On timing, perhaps sales of the old one have reached rock bottom because people are buying the Bachmann one, so Hornby decided now was the time to upgrade to a new one.

[Pennine MC]

There are some vehicles that no "range" of models can be without and a Brake Van is one of them - all freight trains (except those made up with modern air braked wagons) need one. On timing, perhaps sales of the old one have reached rock bottom because people are buying the Bachmann one, so Hornby decided now was the time to upgrade to a new one.

 

(my bold) - that point's already been corrected in the Hornby Mag thread

 

I agree Hornby cant not have a brakevan in their range, but as they're still turning out the dreadful old 1960s clunker for some applications as well as the better 1980s version, I doubt they're worried about the 'old ones' not selling

[brushman47544]

This is how it should be done. Disney stores have most of the main characters in stock. Could my wife resist the pleadings of my son? No

 

Could she buy anything similar from Hornby? No

 

Why?

 

 

Wot...no Finn McMissle's train...

[craigwelsh]

With the evidently strong following for BR liveried items the pendulum seems to have swung hard against pre-nationalisation models. Even though a 'big-four' brake van could be offered in at least two liveries, (pre- and post-nationalisation), the prevailing marketing wisdom seems to be to focus on post-1947.

 

Of course I am making a sweeping generalisation here and there are certainly many exceptions, but there does seem to be a prevailing trend.

Although we mostly get BR liveries (which follows what the market it modelling) we still have a good range of pre-nationalisation stock. If Hornby were concentrating on BR stuff we'd have had a different coach range, mk1 horsebox and Catfish hoppers this year and not the choices Hornby went for.

 

Don't forget BR built Stanier brake vans and designs from the other companies until the orders were finished and they standardised on their own design. I've specifically said the Stanier one over the GWR examples as they went everywhere under BR and lasted until the end of brake vans as well as the standard designs.

 

To sum up I agree Hornby needed a brake van I just think its a bad choice to go for one of Bachmann's 99% right models that they can't compete with on price when they could have updated their Stanier and put the old one in Railroad.

 

Pennine has covered the Tippler well with his points. I'd forgotten about the Rudd,Clam chassis which if its a normal chassis can be used for a pipe too which could give Hornby a cost saving they could pass on. Bachmann are usually quite clever with their wagons and if you look at the recent LNER range its a common chassis with many bodies. I would suggest Hornby could have done the LMS range but maybe they'd be better sticking to the more exotic and complicated stuff we might pay a markup for instead? Premium prices 'box on wheels' rake wagons don't seem to be something they can do that well.

[Ozexpatriate]

Hornby has released their 2011 Annual Report (for the year ending 31/03/11). As usual, the Chairman's Statement is worth reading for people who follow Hornby closely.

 

In the 2011 report Neil Johnson says:

The result for the year was impacted negatively by two factors. Firstly our largest supplier in China failed to meet our product supply requirements, primarily as a result of implementing an Enterprise Resource Planning (ERP) system during the early part of our financial year, causing substantial short term disruption to our supplies. Whilst supplies improved during the year, it was not possible to recover the backlog. Supplies to our European subsidiaries were particularly badly affected. We are very conscious of the fact that shortcomings in our supply chain have held back the Group’s progress for a number of years.

 

This has a both a familiar and simultaneoously discordant refrain. In their interim report from 30/09/10, they said:

However following the global economic uncertainties of recent years all our suppliers experienced shortages in supplies of electronic and other components in the period to September. These shortages were exacerbated within our largest supplier by the implementation of a new enterprise resource planning (ERP) system. This system is now functioning satisfactorily and deliveries of finished products are much improved. We have also continued with our strategy to diversify our supplier base to meet our growing capacity requirements.

 

"It's not my fault sir, honest, it was Sanda Kan's ERP system."

 

In retrospect, the interim report seems to be a bit too optimistic. Clearly with today's thread on delays to (at least some) B17s and the 5BEL, Hornby's supply chain problems with Sander Kan persist and presumably this is no longer due to the introduction of an ERP system.

 

A summary news story is printed here.

[Ozexpatriate]

In the 2011 report Neil Johnson says:

Following on from the ERP observations, Neil Johnson continues with:

Throughout this extended period we have been working closely with our largest supplier and others to improve performance and at the same time to diversify our supply base. We have also engaged additional staff in Hong Kong/China to assist with production planning and to help ensure that our requirements are met. Over recent months our largest supplier has been manufacturing at the level we now require and, with additional suppliers coming on stream, we do not expect such supply shortages to constrain sales in the forthcoming financial year.

It is essential that corporate annual reports have an upbeat optimistic tone, but this statement rings hollow with the very recent announcement that the 5BEL particularly is delayed.

 

As consumers we want quality models and if the delay is caused by making sure a quality product is brought to market, so be it. (I don't intend to purchase a B17 or a 5BEL either way.) But I would have thought the delay of these products might have some material effect on Hornby's likely revenues in the period leading up to 31/03/12.