Hornby supply and demand gremlins.

[Ozexpatriate]

New announcement from Hornby today - more to come.

 

 

Hornby, the international models and collectibles group, is today updating shareholders on trading ahead of its Preliminary Results for the year ended 31 March 2013, which are expected to be announced on 7 June 2013.

 

"I am pleased that the business is in a more stable shape going forward. Our supply chain is improving and our brands remain popular. I am satisfied that the steps we have taken will lead to an improved financial performance in the future.

[Ozexpatriate]

... We know that Dapol Dave seems to spend as much time flitting to & fro between North Wales and China

As does the head of Rapido Trains. I expect that the same is true for Hornby.

 

It's safe to say that there is a lot that Hornby is not telling us. My guess is that it is very embarrassing and will materially hurt their share price were the full details divulged. There's a possibility that the spurious packaging issues (while no doubt true) do not explain the full depths of their current production issues.

 

It is clear that production of Hornby models at Kader manufacturing services is ramping down.

 

Hornby (Jan 30 2013):

The supplier causing disruption to our model railway supplies is now expected to contribute less than 15% of total production in 2013. This is from a historical peak of 75% and 35% earlier in 2012.

Mr. Greco (from Ferrovie.info)

... the usual supplier was no longer able to meet our demands. This has resulted in the displacement of all molds of new suppliers (this time more than one) and then the production has undergone a technical stop.

 

In relation to the model we were missing a few months with the delivery of news, due to a change of supplier ...

They are ramping up their new source, which started in small volumes with the 28xx.

 

Mr. Greco:

Now the production is ready to go and we will start from April to deliver new items again, this time with greater regularity.

...

and we are now ready to go forward with regularity the new machines. The first to arrive will be the 831, scheduled to begin in April, and then to follow the others.

//Wild speculation mode on// My guess is that during the period Hornby brought a new supplier on line, Kader has squeezed them, perhaps to the point of cutting them off completely, except perhaps for some legacy tooling and they've really had to scramble to ramp up volume in the new supplier - to the point of small production runs (like the 2BIL).

 

Since the new supplier may have been started by ex-Sanda Kan people*, who knows what kind of back and forth has been going on between the companies in China including the usual things like poaching talent ... etc.

 

Meanwhile at the new supplier, mistakes are being made, packaging etc.

 

* I did read that somewhere.

[The Stationmaster]

New announcement from Hornby today - more to come.

I like the interesting juxtaposition that board 'remains confident of the Group's strategy'  and the fact that they're also going to spend half a million quid on 'managerial restructuring'  (which immediately suggests in my mind a change in strategic emphasis).

 

Perhaps the reported arrival in some places of 8 coupled tanks has prompted their little piece of self congratulation about being on target (just)?

[Ozexpatriate]

Perhaps the reported arrival in some places of 8 coupled tanks has prompted their little piece of self congratulation about being on target (just)?

If the shipments to retailers left Margate with net 30 day payment terms, I expect that Hornby can claim that revenue in their 'year ending March 31' figures. This would be very helpful to them right now.

I like the interesting juxtaposition that board 'remains confident of the Group's strategy' and the fact that they're also going to spend half a million quid on 'managerial restructuring' (which immediately suggests in my mind a change in strategic emphasis).

 

A one-off restructuring charge of around £0.5m will be recorded this year, which is expected to be largely offset by cost savings in the year to 31 March 2014.

I'd suggest that a one-off restructuring charge followed by cost savings in the following year sounds like management code for retrenchment with severence packages and replacement positions unfilled. In other words, a management layoff, resulting in a smaller senior management team in the 'heads will roll' vein.

[Ian Hargrave]

Don't know if this is the 'appropriate' thread to air this but I have just noticed what I believe to be an alarming new imbalance in Hornby's pricing. Hattons have recently listed two new versions of their Class 31 in BR green. One weighs in at £120 and the other at £124. This is essentially a re-run of a model that first appeared in,I believe 2004. Contrast this with the cost of newly developed models,such as the O1 and B17 which are some £20 less.Can someone point out to me the logic in this......or is there some brilliant new smart technology at play here which I'm not smart enough to appreciate ? An updated version of The Emperors New Clothes ,perhaps ?

[S.A.C Martin]

Don't know if this is the 'appropriate' thread to air this but I have just noticed what I believe to be an alarming new imbalance in Hornby's pricing. Hattons have recently listed two new versions of their Class 31 in BR green. One weighs in at £120 and the other at £124. This is essentially a re-run of a model that first appeared in,I believe 2004. Contrast this with the cost of newly developed models,such as the O1 and B17 which are some £20 less.Can someone point out to me the logic in this......or is there some brilliant new smart technology at play here which I'm not smart enough to appreciate ? An updated version of The Emperors New Clothes ,perhaps ?

 

Should also be noted Ian that the O1 and B17 in the 2013 catalogue have had £20 and £30 price rises for the DCC ready and DCC fitted models respectively.

 

*around £20 and £30 

[Ian Hargrave]

Should also be noted Ian that the O1 and B17 in the 2013 catalogue have had £20 and £30 price rises for the DCC ready and DCC fitted models respectively.

 

*around £20 and £30 

Even allowing for that,Simon....someone is pulling the 'proverbials',here.....this gives a strong impression of a situation that seems to be spiralling out of control

[Miss Prism]

I'm guessing a bit here, but I feel these price hikes are possibly a predicted reflection of what will happen now to items done in the 'design extravagant' era, with labour-intensive aspects being a large factor. The 31 in particular has got lots of wiring in, plus a famously-complicated circuit board.

[S.A.C Martin]

Even allowing for that,Simon....someone is pulling the 'proverbials',here.....this gives a strong impression of a situation that seems to be spiralling out of control

 

Absolutely Ian: and I have said as much elsewhere. However the biggest price hike for me is the £79.99 RRP for the 2012 "Budget range" Railroad Flying Scotsman. A model which is a mish mash of so many different other shared toolings and cad work that you wonder how they can suggest the price. Particularly when the previous model came in at under £60.

 

This is something we've all noticed about Hornby's pricing over the last three years. It doesn't seem to bear relation to inflation or (Miss Prism's hypothesis accepted) increasing wage costs, but more what the market is possibly willing to sustain. 

[Miss Prism]

Toy pricing has always been about what the market is willing to sustain.

[bigherb]

I'm guessing a bit here, but I feel these price hikes are possibly a predicted reflection of what will happen now to items done in the 'design extravagant' era, with labour-intensive aspects being a large factor. The 31 in particular has got lots of wiring in, plus a famously-complicated circuit board.

Your probably more on the money. Just because it was first issued in 2004 doesn't make it any easier to make and peoples wages are going up in China. It is a very hi spec model, too high spec IMO.

Look at the possible prices of the Bachmann Birdcage coaches and we don't even know the spec of them yet.

[Horsetan]

Toy pricing has always been about what the market is willing to sustain.

 

....which, in this country at least, has been a lot less than in, say, mainland Europe. We don't pay the £200-£300+ per RTR engine that they do, even though our modern standards match and arguably exceed theirs.

[45568]

Don't know if this is the 'appropriate' thread to air this but I have just noticed what I believe to be an alarming new imbalance in Hornby's pricing. Hattons have recently listed two new versions of their Class 31 in BR green. One weighs in at £120 and the other at £124. This is essentially a re-run of a model that first appeared in,I believe 2004. Contrast this with the cost of newly developed models,such as the O1 and B17 which are some £20 less.Can someone point out to me the logic in this......or is there some brilliant new smart technology at play here which I'm not smart enough to appreciate ? An updated version of The Emperors New Clothes ,perhaps ?

 Ian and Simon,

 I noticed this on Hattons website this am, (oztime), and my flabber was truly gasted! I know that this variant has been much sought after from the earlier release, but why..

A] Offer two identical  offerings priced differently.. and

B] Why not do one with and one without the yellow panel?

 Hornby are not the only UK retailer suffering, Bachmann's prices are generally rising, which coupled to their modified discount policy,means that the new conflat + A container is a little short of 10 quid at Hattons. A look at Bachys rrps for 2013/14 sees everything rising.

Here in Oz, at the moment we have an apparently healthy economy, reflected in a very favourable $A/sterling rate, I have had some bargains in the last 12 months. I don't think this will always be the case, so, after a feast of biblical proportions for an LNE/LM modeller 2011-12, I'm already cutting back my 'wants' lists, helped by the big two whose plans are outside my remit, Hornby especially have not pressed many buttons  for me in 2013.

Only thing on pre-order, Heljan NB D8400!

Cheers,

Peter C.

[mcowgill]

Has anybody noticed the new releases of the GWR B-Set carriages?   The photos here http://www.ehattons.com/51148/Hornby_R4549_GWR_60_Suburban_B__/StockDetail.aspx show they are fitted with the B4 bogies, presumably off the old Airfix/Dapol Mk2D with couplings sticking out miles from either end.  

 

I can't imagine anyone at Margate made a conscious decision to change the production from the correct GWR bogies to something totally inappropriate, probably an undetected manufacturing/assembly change in China, but where is the inspection and quality control to 1) stop the incorrect product being packed and shipped at the factory and 2) random inspection at Margate before distribution to retailers?  Hattons have photos of both variants with the same comedy bogies so it looks like it's not an isolated rogue model.

 

Martin C

[Ian Hargrave]

Both 31 variants are 'on offer'this weekend from Rails......with the same price difference . As 45568 asks.....WHY ?  Incidentally does anybody at Hornby actually KNOW what the market can sustain ?

[Miss Prism]

I expect riding in a B-set on B4 bogies could be quite comfortable, but Hornby has definitely lost the plot!

[S.A.C Martin]

 

Has anybody noticed the new releases of the GWR B-Set carriages?   The photos here http://www.ehattons.com/51148/Hornby_R4549_GWR_60_Suburban_B__/StockDetail.aspx show they are fitted with the B4 bogies, presumably off the old Airfix/Dapol Mk2D with couplings sticking out miles from either end.  

 

I can't imagine anyone at Margate made a conscious decision to change the production from the correct GWR bogies to something totally inappropriate, probably an undetected manufacturing/assembly change in China, but where is the inspection and quality control to 1) stop the incorrect product being shipped from the packed and shipped at the factory and 2) random inspection at Margate before distribution to retailers?  Hattons have photos of both variants with the same comedy bogies so it looks like it's not an isolated rogue model.

 

Martin C

 

 

That's...different. Never seen that sort of thing before! Is this a one-off model or are they all like that?

 

Bachmann recalled their Modified Hall to sort out a fire iron tunnel, I can't imagine (despite the clearly more pressing need to be on the correct pattern bogies) that Hornby will do something similar here. If they wouldn't act on the 4VEP (no replacement interiors forthcoming despite assurances over a year ago) then they won't act on that.

 

I am assuming, of course, that this model is indicative of all the batch in question.

[(The) Youth]

B4 Bogies on the picture on rails of sheffield site

[Legend]

According to the Mail today there is to be a clear out of 6 senior managers, presumably this relates to £0.5 m restructuring costs. Frank Martin is to be kicked upstairs to a Chairman position due to his extensive knowledge of the toy industry. You could argue that that's what's got them to where they are now!

 

I certainly think its time for a breath of fresh air in Hornby. The decision to put all their manufacturing in one company with no back up plan , and the repeated failure for 4 years to sort this out ,is damning. Couple this with the Olympics fiasco and you can see why change is needed

[Ozexpatriate]

Has anybody noticed the new releases of the GWR B-Set carriages?   The photos here http://www.ehattons.com/51148/Hornby_R4549_GWR_60_Suburban_B__/StockDetail.aspx show they are fitted with the B4 bogies, presumably off the old Airfix/Dapol Mk2D with couplings sticking out miles from either end.

I expect riding in a B-set on B4 bogies could be quite comfortable, but Hornby has definitely lost the plot!

(I have these on pre-order.)

 

For reference: 

 

This is deplorable quality control. It is clearly not what was intended.

[Budgie]

Has anybody noticed the new releases of the GWR B-Set carriages?   The photos here http://www.ehattons.com/51148/Hornby_R4549_GWR_60_Suburban_B__/StockDetail.aspx show they are fitted with the B4 bogies, presumably off the old Airfix/Dapol Mk2D with couplings sticking out miles from either end.

 

 

I expect riding in a B-set on B4 bogies could be quite comfortable, but Hornby has definitely lost the plot!

 

 

B4 Bogies on the picture on rails of sheffield site

Has anybody asked Hornby what's going on here?

[Oldddudders]

Given that this thread is about supply and demand, Hornby appear to be in a position to supply some really pretty coaches for which there will be zero demand!

[Ozexpatriate]

Has anybody asked Hornby what's going on here?

Can anyone find Mr. Kohler's email for me? I know it's here on RMweb somewhere.

 

And while we're on this topic.

 

You've gotta love the accuracy of Hornby's online catalogue.

 

In the 'description' section, the R4549 webpage states:

Entered Service: 1936

Period: 1950s

 

(This for a chocolate and cream livery with "GWR" in the waist over the arms.)

 

EDIT: I have sent a note to Mr. Kohler. Let's hope this wasn't an early April Fool's prank per 'scorpion's suggestion below.

[scorpion]

is it an April fool thats got released early?  that Hattons picture cannot be real, surely...

[Downer]

As to the two new Class 31s with small yellow panels, Hornby's pre-release literature stated that one would be plain green.  Did some rogue Chinese worker's obsessive panelling of each and every one of them somehow escape the notice of Quality Control?  

 

And the B set coaches should make the Guinness Book of Records for the longest distance between coupled vehicles.