Hornby's Future Is Cheap Toys ...

[iak]

Another British paradox..?

We all want to make more money as easily as possible, business types and Joe Public.....

And yet when we do not pay for or invest in quality: we complain about the quality we then get.....

Confused? Wibble......

[spamcan61]

I don't see any problems with the factories in China providing a fine level of detail now or in the future - See the top of the line Atlas models for example.

 

Best, Pete.

 

Bachmann/Kader don't seem to have many problems either, but Hornby sure as hell do.

 

Maybe Atlas's volumes/ USD turnover with their supplier are sufficient for them to have a bit of leverage over their supplier(s).

[Ceptic]

l've said this before, and l'll say it again, always watch your six, especially when there's a bloke called Frank around.

 

Regards, Frank.

[trisonic]

 

Bachmann/Kader don't seem to have many problems either, but Hornby sure as hell do.

 

Maybe Atlas's volumes/ USD turnover with their supplier are sufficient for them to have a bit of leverage over their supplier(s).

 

Sorry, that is exactly my point - I didn't spell it out enough - but then Atlas' retail prices on their top of the line models are just above the Hornby equivalent but they are shifting way more boxes, I dunno, 5 times as many???

 

Look at it this way, 2 new models, highly detailed from Hornby and Atlas.

Their research to tooling up costs are going to be roughly the same but Hornby may sell 1,000 units initially and Atlas 5,000 units - with the same costs.

Who's going to be happier?

 

Best, Pete.

[The Stationmaster]

For Mike: If detailed models for our niche area were highly profitable they would be falling over themselves to make us happy - it is patently obvious that Hornby, for one, are not.

 

Sorry, I am rather playing the Devil's Advocate here!

Best, Pete.

Nothing wrong with that approach Pete I wonder if what they might be facing is a sort of borderline between 'fine detail' and 'quantity production'/ There's no doubt in my mind that they can produce some excellent stuff - otherwise I wouldn't have spent a fair amount of my pocket money on it over the last year or two as they mined the Western vein - but I wonder if it's all a bit too much complicated design and investment and manufacturing problems than the far simpler low cost sort of business model Frank Martin seems to favour? Do the comments about 'nerds' and 'rivets on shovels' suggest that he's not very happy being involved in the kind of business which has discerning and critical customers who know what they are buying and expect it to live up to the marketeer's promise? I obviously don't know the answer to that but that seems to be the message he is sending to someone assuming he has been accurately reported.

 

Looking at it from a different direction if such models weren't profitable why would folk in small businesses be investing £100 grand+ in producing such models? Or why would Bachmann, Dapol and Heljan be doing it? Things are really not much different from Hornby, in business terms, for any of them - they have models made in Chinese factories at Chinese prices with the attendant communication and quality control issues that are faced by Hornby yet all three seem thus far to be persisting in developing new locos and stock etc for the British outline market at prices we seem to be prepared to pay.

[coachmann]

Two things accur to me.....Needless duplication on Hornby's part that merely halves their market share. The other is super- detail that is too fragile in ordinarry plastic.

 

Plastic RTR manufacturers usually look for ways of lowest production costs but Hornby bucked the trend by making many of its products labour intensive. The Chinese assemblers had their work cut out fitting very tiny parts when the whole idea of plastic moulding is to reduce parts and produce in one piece as far as possible.

 

Sure it's good to raise the bar with separate coach door grab handles etc, but when they break off at a minutes notice it is time to get back to basics. They should be moulded in place as in previous years, afterall they only stick out a scale 1mm if that.

 

Hornby changing direction is nothing new, but on this occasion I cannot help feeling they went too far with fine detail and ended up with costly production that left no leaway to make reductions.

[Western Scottish]

You have to be careful with what gets quoted by reporters. He may have been misquoted.It does seem rather barmy to be smiling "at the absurdity of some of his customers". That is definitely a "Ratners" moment. The rivet on a spade story is extreme, maybe he needs to keep his perspective.

 

Truth is ,during Mr Martins tenure, Hornby have stalled over the last few years. There is no doubt they could have sold more when times were good but failed in this respect because they just couldn't deliver. Their supply chain was hopeless. Yes hindsight is a wonderful thing but was it really wise to have all Hornbys eggs in the Sanda Kan basket. Its only latterly that they seem to have diversified to other suppliers, and by then the damage was done. So no prizes there Mr Martin.

 

Then there's the going into cheap toys line. Sorry tried it before, not exactly original. Was it Polly Pockets or something like that? Its in Pat Hammonds books on the history of the company, maybe Frank should read them ,but thats probably "nerd" like. The Toy industry is notoriously fickle.You may have a money spinner selling thousands but equally you can invest in products that go no where (3DS anyone?). I would have thought maximising the earning potential of the strong ranges they have is the way to go. Its certainly more consistent earnings wise if you get the supply chain worked out. Certainly the lesson from the past was to get out of toys and back to their core hobby ranges.

 

I think we can only be thankful that with an attitude and strategy like that, that Mr Martin is retiring. There is no doubt in my mind that Hornby have lost brand leader status probably for around 2 or 3 years now. While before I couldn't contemplate model railways without Hornby, I am now wondering if their existance with some high price poor quality ranges (look at the Thomas range and compare it with Bachmann as one example) is actualy a block on future development of the hobby. Look at what Kernow are doing with the Beattie tank, Dapol with their Western and Bachmann consistently across their range.They don't look down their noses at their customer base with disdain. Might it be better if Hornby got out of model railways and went for cheap toys and let other take up the reigns?

[BR(W)]

From the Telegraph article: "...chrome-finish key rings in the shape of the aquatics centre...".

 

What's the betting if Martin's Hornby produce them, they'll finally hit the shops anodised and in the shape of the velodrome - and they won't accept keys.

 

From the Telegraph article (CV): "Hobbies Sailing."

 

Says it all, really. He is the hard-nosed executive who believes that if a pound of working capital can be turned twice in a given period by producing faddish, exploitative tat, whereas it can only be turned once in producing a quality, traditional product, then tat is the future. I seem to recall that Raleigh took the same route in the seventies - Chopper, anyone?

 

BR(W)

[spamcan61]

 

Hornby changing direction is nothing new, but on this occasion I cannot help feeling they went too far with fine detail and ended up with costly production that left no leaway to make reductions. The LMS Stanier and LNER Gresley coaches were a lost opportunity through looking too closely at the fine detail and missing the blindingly obvious. Compared with Hornby, I am an extremely small manufacturer, and yet the same criteria apply.....Speedy production = affordable models at minimum cost and maximum profit.

 

I strongly suspect that's the crux of the matter, and we're now past the peak, as Pete said earlier in the thread. They made fine detail the USP, but now find it increasingly difficult to do consistently and cost effectively.

[Ozexpatriate]

First, let me say "thank you" to Mike for linking this article.

 

Second, I concur with the general sentiment of posters here who could not help but notice the snarky, pejorative tone Mr. Harry (Cods) Wallop uses to refer to us "nerds".

 

Since I qualify as a nerd many in many interpretations of the word, I'll wear that badge with honour.

 

This is an astonishing piece of 'journalism'. Irrespective of communicating a "new direction" to the investment community, rarely does a PR piece go so far to directly insult a group that is responsible for a large portion of a company's revenue. It really paints Frank Martin as glib, disdainful to his customers and a yachtie snob and doesn't do much for his executive gravitas.

 

I can only wonder what Simon Kohler thinks of his master's voice in this article.

 

Having said all that, none of this is really new news. Many of us have been watching and commenting on Hornby's moves back into the toy market for a couple of years. If the toy market produces a cash flow that diversifies the company, and permits continued investment in (what is demonstrated to be) the reasonably profitable railway modelling segment, then that's good news for everyone. (Unfortunately they really don't seem to be very good at being a toy company and have been rather better at model railways.)

 

My biggest fear is how the law of unintended consequences, coupled with the requirement to increase shareholder value can destroy otherwise good companies. It is my hope that does not happen here. This article makes me fear that outcome a little bit more.

 

Edit - spelling.

[Removed a/c]

Forgive me if I am wrong but Hornby is just the parent company is it not? The article clearly states that Corgi will be the maker of the cheap toys. Don't really see what all the fuss is about.

[Metr0Land]

 

I don't understand this post. Hornby Magazine is owned by Ian Allan, not Hornby Hobbies so this is wholly irrelevant.

 

Surely the ownership of the mag is neither here nor there? SOMEONE is currently publishing a monthly in which the name Hornby features in the title. According to the blurb:

http://www.Hornby.magazine.co.uk/?gclid=CKeZsPLdqasCFYYmtAodyCQQ0w&T=1316449860&JTID=180320426&OGID=457&network=GAW

 

"Hornby Magazine is the magazine aimed squarely at all rail modelling enthusiasts".

 

If Hornby is now perceived as being pile-em-high sell-em-cheap that's a significant shift in the Hornby brand position and someone has a monthly mag with Hornby in the title.

 

Imagine if 40 years ago someone other than M&S was publishing a monthly mag, in the days when teenage girls thought it offered fashionable affordable clothing and the mag was called M&S.

Then one day in the 90's they woke up and found someone like Next had stolen a large chunk of the market and M&S was now the place where your mum, or your nan got her clothes. What price having M&S in your title then?

 

Fast fwd to 2015 - Hornby magazine might still be aimed squarely at all enthusiasts but if those with disposable income have voted with their wallets big time in the purchase of actual models, surely they'd think twice about buying a mag with a brand name in it that they no longer feel good about? Maybe they could re-brand it VEP magazine......

[Charlie]

Business people running a company they do not understand?

Well I never, in the UK?

 

Ever worked in the NHS....

 

With regards to the ageing modelling population I think it's fair to say that this article exacerbates part of the problem, by spreading the view that modelling (one could say in any form) is not cool, putting kids off and restricting the fresh blood to the hobby. It seems to be the standard response to anyone who takes an interest in something that's not "mainstream" is that they are a nerd/sad/loner and are open to abuse. It's more the attitude of the reporter than the apparent disinterest of the CEO that annoys me, if he tried that on other groups I'm sure he'd lose his job quite rapidly.

[spamcan61]

 

That's a bit worrying, if most of us are expected to catch our last train in our 60's.

 

Myself, I plan on going on a good bit further than that

 

Sorry! I was grilling sausages, serving a cottage pie and posting on here all at once:-/ - please insert 'at least' in front of the 20 years.

[Guest dilbert]

 

In fairness Airfix selling model soldiers is hardly new ground for them...

 

Of course, but in the past, Airfix never released for example, items directly related to 'las Malvinas', the troubles in NI in the early 70s whilst the conflicts were ongoing - this Afganistan announcement IMO just scrapes the barrel. Libya, Iraq next ?...dilbert

[Pennine MC]

I can only wonder what Simon Kohler thinks of his master's voice in this article.

 

 

Fourth paragraph; maybe...

 

http://www.rmweb.co....post__p__484949

 

(apologies to Gwiwer for using his post out of context)

[jonathan452]

Sixty five replies already whilst I've been out.

 

Cheap toys - Bring on Playcraft!

[frobisher]

Forgive me if I am wrong but Hornby is just the parent company is it not? The article clearly states that Corgi will be the maker of the cheap toys. Don't really see what all the fuss is about.

 

There you go ruining the froth and debate by bringing actual reading comprehension skills to the party

[Legend]

Not surprised by this. I've been thinking Hornby's lost its way for sometime. Now it seems like the guy at the top believes they can earn more out of chrome key rings and cheap supermarket till toys. Probably thought it was too expensive to cut out the compartments in the 4 VEP and that he'd extract max profit from us Nerds by fitting a Limby motor in it with traction tyres. Explains a lot really!

[bmthtrains - David]

Interesting article, but as always, hugely distorting things to create journalistic drama.

 

That aside, I for one am not surprised by any of this 'news' that Hornby is looking less at the model market and more at the toy market for its profits. The harsh reality is that Hornby is a listed company and has to generate returns for its shareholders, and diversifying is crucial as it does not have the scale that someone like Kader (Bachman's owner) has to be able to continue meeting the modeller's paradoxical demand of more detail at lower (relative) prices.

 

I agree with Andy Y that Hornby have for some time no longer been the brand leader in 'our' market, Bachmann cemented that a few years back in my view. I also think their pulling back (if that is what is happening) from the model market will allow other, smaller companies to develop, which will be good for the hobby in the long term.

 

Finally, Hornby will still be important as an 'entry level' player - getting kids interested in model railways by keeping their brand strong in the toy shops. When they grow up, they can then move onto other brands for higher quality models.

 

I am rather mixed about this - as an N gauger, the potential loss of Hornby as a serious player doesn't affect me, but it is a bit like sticking 2 fingers up at a very vocal part of their customer base! I also appreciate why Hornby are doing this, and it is certainly in the hobby's interest that Hornby survives, even if it is turning towards the trainset market rather than the modelling one.

 

The important thing is that the hobby continues to survive, and I honestly think modellers are spoiled rotten at the moment, with a growing market, incredibly detailed models of prototypes we never expected to see in RTR form, with a strong suite of magazines, websites (such as this one!) and exhibitions continuing to keep the hobby going. Who provides us with the goodies isn't important. That the goodies are being supplied in quality and quantity is.

 

We are in a golden age, sad that Hornby isn't inclined to exploit it.

 

David

[asmay2002]

 

Of course, but in the past, Airfix never released for example, items directly related to 'las Malvinas', the troubles in NI in the early 70s whilst the conflicts were ongoing

 

I'm pretty sure the Airfix Sea Harrier FRS1 kit first came out in 1982.

[Legend]

 

I'm pretty sure the Airfix Sea Harrier FRS1 kit first came out in 1982.

I pretty much remember a set of warships County,Leander and Amazon (Type 21) classes being released shortly after the conflict. 2 Type 21s were lost in the Falklands with a number of Sailors on them , including I remember the guy that was trying to diffuse a bomb on HMS Ardent, but nobody criticised Airfix then. I suppose it may have been that the Falklands War had ended then whereas Afghanistan is continuing. But then wee boys played with wooden spitfires back in WW2 so are we getting a bit too PC?

[spamcan61]

 

There you go ruining the froth and debate by bringing actual reading comprehension skills to the party

 

Whilst the two quid toys is a Corgi venture, the general strategic move into movie tie-ins etc. items isn't (Toy Story 3 train set, yada yada) , this interview with Frank Martin has brought the issue into the spotlight again.

[spamcan61]

Interesting article, but as always, hugely distorting things to create journalistic drama.

 

That aside, I for one am not surprised by any of this 'news' that Hornby is looking less at the model market and more at the toy market for its profits. The harsh reality is that Hornby is a listed company and has to generate returns for its shareholders, and diversifying is crucial as it does not have the scale that someone like Kader (Bachman's owner) has to be able to continue meeting the modeller's paradoxical demand of more detail at lower (relative) prices.

 

David

 

What several of us our questioning though, is why move into a market in which they've already got a poor track record and their operational mode,( i.e. manufacture out East to seemingly indeterminate timescales), is going to be even more of a problem than it is now, as timing is critical for movie tie-ins and suchlike.

 

I'm not sure how many buyers even want more detail now; current product is already far higher quality than my modelling, but manufacturing issues (e.g. random fitting of DCC chips, bogies on wrong way round) and odd design decisions (e.g. solid corridor partitions, traction tyres) certainly don't go down well with at least part of the customer base.

[Ozexpatriate]

I can only wonder what Simon Kohler thinks of his master's voice in this article.

 

Fourth paragraph; maybe...

 

http://www.rmweb.co....post__p__484949

 

(apologies to Gwiwer for using his post out of context)

Perhaps you are right and he would shrug this off too. Unless he says something, we won't know and I'd prefer not to speculate.

 

While mine was a deliberately open-ended question, I imagine it's a rare head of marketing that would be pleased to see his chief executive appearing to snub customers.

 

Some say 'all publicity is good publicity'. This attitude might fuel the world of 'famous for being famous' instant celebrites but is an exaggeration in a business context.