ModelZone seeking Administration

[simoncorkswill]

I'd be interested to know how many average families would know where to start interesting their sons and daughters in model railways, were it not for the likes of MZ?

 

Useless for you perhaps, but their role is perhaps more significant than supporting more experienced modellers (or as RM used to describe us, 'The Average Modeller').

 

 

Quite a few are started by independents , but I agree supermarkets selling sets etc started an awful lot more , the more salient point is that Manufacturers have made sets too expensive to get youngsters involved , particularly Hornby who had a good idea with the railroad range only I believe to 'retire' shall we say the originator of the idea and increase the prices on the railroad range quite a lot .

 

However poor advice from Model zone staff will have cost some of those people an alwful lot more money than necessary , not on purpose , but through ignorance.

[Legend]

So, it appears they have already had a "management buyout", Mike? Not something many people would look at with interest i.e. the potential for a return on investment in minimal.

 

I wonder how much money they owe Hornby and Bachmann? That alone could bring down one of them...

 

Best, Pete.

Unlikely Pete. From what I gather Hornby goods in Model Zone belong to Hornby. If it comes to it theyll simply take their stock back. Not sure about Bachmann, but at least in Glasgow they didnt stock that much Bachmann. Doubt its significant if a factor.   More interesting might be what happens to special commissions like the CCT. If so far down the road Bachmann will probably jcontinue and supply under normal Bachmann name

[The Stationmaster]

So, it appears they have already had a "management buyout", Mike? Not something many people would look at with interest i.e. the potential for a return on investment in minimal.

 

I wonder how much money they owe Hornby and Bachmann? That alone could bring down one of them...

 

Best, Pete.

Exactly so Pete - simple tip for anyone commenting on companies and their future (or past) is to first do a spot of research on the 'net to find out who owns them, who they own, and what their accounts look like if they're available.  I seem to recall they became a management buyout after the previous brush with 'poor trading conditions' but haven't been able to confirm that.

 

Similarly if all we have found in the past about Hornby concessions is correct - and all the evidence suggests that to be the case - it depends very much on the terms of the concession deal and how frequently payment is made etc.  The present administration move ties in with shop rental payment dates I believe although it looks to be more than a cashflow thing.  And as for folk owing money to the likes of Hornby or Bachmann how big a list would you like - there are clearly some traders not being able to pay their bills on time for a variety of reasons when models which were previously 'sold' at trade level come back onto the trade market and are made available to other retailers and from knowing what some of those models are I'm sure that some of the people who weren't up to date on their payments or were over their credit limits weren't Modelzone.

[Butler Henderson]

Last year they were looking for a new buyer with a focus on model railways. The effect of that apears to have been the Bachmann cheapies that they were flogging off at low prices akin to what you might find from the big box shifters. As my local store is solely fullof the red box lot apart from limited ediions and sale items then the Bachmann offers were plainly not a branch clearing its stocks.

 

As the red box stuff, presumably along with Corgi and Airfix, are Hornbys stock then it does beg the question whether MZ sought a reduction in Hornbys dictated prices to attract custom.

[Fat Controller]

Unlikely Pete. From what I gather Hornby goods in Model Zone belong to Hornby. If it comes to it theyll simply take their stock back. Not sure about Bachmann, but at least in Glasgow they didnt stock that much Bachmann. Doubt its significant if a factor.   More interesting might be what happens to special commissions like the CCT. If so far down the road Bachmann will probably jcontinue and supply under normal Bachmann name

My recollection of most 'Terms of Trading' is that goods remain the supplier's property until payment has been received. Thus a situation could exist where some unpaid-for goods remain unsold, and could be repossessed, but others have been sold, and so the supplier would be due the cash from these. Though the amount of such sales might be relatively small in each shop, the global total could be significant.

[The Stationmaster]

Last year they were looking for a new buyer with a focus on model railways. The effect of that apears to have been the Bachmann cheapies that they were flogging off at low prices akin to what you might find from the big box shifters. As my local store is solely fullof the red box lot apart from limited ediions and sale items then the Bachmann offers were plainly not a branch clearing its stocks.

 

As the red box stuff, presumably along with Corgi and Airfix, are Hornbys stock then it does beg the question whether MZ sought a reduction in Hornbys dictated prices to attract custom.

I think the only Bachmann stuff which they sold off cheap - certainly what I saw of it - was from the stock clearout which took place at Barwell at some very advantageous prices to retailers (and some of it is still on their hands if you study the ads carefully).

[cavillas]

My son works for SignalBox and there has been a radical change in management.  As far as he knows there have been a number of offers for The SignalBox as a single entity, so watch this space.  As for ModelZone it is likely their  most expensive to rent and run stores will probably close and the ere will be a smaller number around, as long as the administrators can keep it going.

[Fat Controller]

My son works for SignalBox and there has been a radical change in management.  As far as he knows there have been a number of offers for The SignalBox as a single entity, so watch this space.  As for ModelZone it is likely their  most expensive to rent and run stores will probably close and the ere will be a smaller number around, as long as the administrators can keep it going.

I hope, both for your son's sake, and for that of modellers in the region, that a way is found to keep Signal Box going. I've only visited the shop once, but always visit their stand at Folkestone show. 

[Ian J.]

I too hope The Signal Box will be OK. I've not been in there since my unemployment troubles started and cash got too tight, but if I eventually find some kind of work, it was/is likely to be one of the first stops for my first pay cheque.

[Stevelewis]

My son works for SignalBox and there has been a radical change in management.  As far as he knows there have been a number of offers for The SignalBox as a single entity, so watch this space.  As for ModelZone it is likely their  most expensive to rent and run stores will probably close and the ere will be a smaller number around, as long as the administrators can keep it going.

I really  do  hope  that  it  will work  out  well for  the  Signal  Box and  your  son, as  i mentioned  earlier  I  have used them  for  several  years  and   still do  so occasionally

As  we live in North  Wales  its  all mail order  which is  very  effeciant, never any problems, I have  perhaps  spoken to your  son on the  phone!!

 

I really  do  hope  that  it  will work  out  well for  the  Signal  Box and  your  son, as I mentioned  earlier  I  have used them  for  several  years  and   still do  so occasionally

As  we live in North  Wales  its  all mail order  which is  very  efficient, never any problems, I have  perhaps  spoken to your  son on the  phone!!

[Pandora]

Modelzone purchased the independent SignalBoxRochester shopwhen the owner Trevor decided to move on, (about 2006 from memory) 

 

The Modelzone losses are predicted to be a modest £700k on a turnover of £27 million.

 

I think the Administrators can  soon arrest that situation.

 

The Rochester shop is the oddfellow, they discount to competitive levels, are well established,with a loyal client base,  strong on mail order, and  

near 100% railways   (unlike the rest of Modelzone) and not trying to be all things to all men (modellers).

 

It is amazimg that Modelzone High Holborn London closed only weeks ago, and a replacement shop opened days ago, how can things cahnge so quickly!!!

 

I am sure Rochester will carry on as before, but without the hindrance of the rest of the Modelzone emporium.

 

Looking at white goods,  Comet etc failed, leaving Currys (dixons) as the last man standing,  they are now restructuring, closing down stores and announcing profits.

 

I can foresee that  we will end up with three key players in the UK  Hattons, Signalbox and Rails of Sheffield

[trisonic]

Correct me if I'm wrong but if ModelZone declare bankruptcy then it doesn't matter who "owns" the stock in store prior to that  it then  becomes part of the receivership? Hornby could still lose out or have to buy them back (at pennies on the pound, though, obviously).

 

If it does end up with just three large operators in the UK then I can't see them allowing prices to remain low with little competition.

 

Best, Pete.

[Pandora]

Correct me if I'm wrong but if ModelZone declare bankruptcy then it doesn't matter who "owns" the stock in store prior to that  it then  becomes part of the receivership? Hornby could still lose out or have to buy them back (at pennies on the pound, though, obviously).

 

If it does end up with just three large operators in the UK then I can't see them allowing prices to remain low with little competition.

 

Best, Pete.

Not quite true,  Hornby would simply send a lorry round and take away the goods that they own.  Modelzone could only sell the goods at the owners dictated prices, Modelzone did not own the goods outright, Hornby  owned and controlled the prices.  Same situation at  Jessops,  the importers owned the cameras in stock and  on display. In fact the manufacturers were giving Jessops cash  to keep the stores afloat.  On receivership the stores were emptied in double quick time

[trisonic]

You may be right. I don't see the Receivers simply allowing that, though!  

 

As my dear old Mum (RIP) used to say: "It'll all come out in the wash..."

 

Best, Pete.

[alfsboy]

When Simtek F1 had its receivership sale Dave Richards of  Prodrive  went along to buy back the gearboxes that Simtek hadnt paid for :-)   .In other words he was buying his own goods  back  so I am pretty  sure  that once a receiver is brought then you just become another creditor after the tax man ,bank ,etc.

[paul-dereham]

Not quite true,  Hornby would simply send a lorry round and take away the goods that they own.  Modelzone could only sell the goods at the owners dictated prices, Modelzone did not own the goods outright, Hornby  owned and controlled the prices.  Same situation at  Jessops,  the importers owned the cameras in stock and  on display. In fact the manufacturers were giving Jessops cash  to keep the stores afloat.  On receivership the stores were emptied in double quick time

This depends on who owns the stock. If Hornby let Modelzone hold the stock on a sale or return basis then Hornby still own it. If, which is more likely, Hornby sold the stock to Modelzone as a retailer then Hornby is a creditor of Modelzone and will have to get in the queue for any payment. The most likely scenario is Hornby sold the stock with a retention of title clause then it's all down to the enforcibilty of that clause.

[paul-dereham]

As I understand it, currently there is an administrator appointed. They will try to get the most value which will include trying to find a buyer for all or part of the chain. Receivership will follow if this is not successful.

[lochlongside]

I have been on the SignalBox  website this afternoon and it now (as of 1700 approx looks like SignalBox has been caught up in all this - -their (SignalBox)  website is now non-operative with a Receiver's note on it

A great pity as I use signalbox web quite a lot and always found them helpful

John

apologies - Administrator - not Receiver !!

[Butler Henderson]

There is I would imagine a difference between goods that a supplier has not been paid for and who becomes one of the creditors, and goods displayed for sale on behalf of a third party, a consession.

 

I would suggest that the way forward for MZ, or any other town centre model shop, would be to adopt a catalogue approach. Have a huge range of goods available to order and collect in store within x days if not in stock. Full price items can be cheaper than ordering from one of the big box shifters once you take postage into account,. For example at present I am in need of a set of Bachmann buffers which are six quid but ordering them alone is at least eight quid. The advantage over mail order being knowing the items will be available next time on the high street and avoids the mail order hassle of having to trek to the sorting office as it needs signing for / was too big and no one was in so significantly increasing costs (time, petrol)

[G-BOAF]

OK, so now it seems Signal Box is down (maybe). I will phone tomorrow. I have several Hornby items on pre-order. As we know Hornby items can be rare as hen's teeth, but if SB go down and their orders are reallocated to other retailers operating a reserve list, then I have totally lost out. Among other items is the Uncoverted SR Maunsell third; given the scarcity of the BR version, I had banked on SB being a large reliable retailer and able to supply.

Interestingly is there any liabilty for failure to supply a pre-order if its not paid for, but if failure to supply means the customer misses out?

 

Do I blame MZ or Hornby?

[Mike Bellamy]

 

Interestingly is there any liabilty for failure to supply a pre-order if its not paid for, but if failure to supply means the customer misses out?

 

I think you would have a very hard job winning that argument in a court - after all no cash has changed hands, and it's not as if we're talking about a 'life or death' situation - after all as far as the administrators are concerned it's just a business selling toys. Firms go bust all the time and creditors loose a great deal - all you have lost is the opportunity to buy something in the future.

[Budgie]

I can foresee that  we will end up with three key players in the UK  Hattons, Signalbox and Rails of Sheffield

What about Kernow?

[Jamiel]

I was just having a look at the Signal Box website, and I refreshed the browser to find this:

 

"On 25 June 2013, Richard Michael Hawes, Nicholas Guy Edwards and Robert James Harding of Deloitte LLP were appointed Joint Administrators of Modelzone Holdings Limited, The Amerang Group Limited, Modelzone Limited and Amerang Limited (together the "Companies"). The affairs, business and property of the Companies are being managed by the Joint Administrators. The Joint Administrators act as agents of the Companies only and contract without personal liability. The Joint Administrators are authorised by the Institute of Chartered Accountants in England and Wales (ICAEW). All licensed Insolvency Practitioners of Deloitte LLP are licensed in the UK"

 

The same at Modelzone.

[simoncorkswill]

Hornby announced a few weeks ago a large upturn in electronic selling is this the start of things to come ? i just hope at the end of the day the local or not so local retailers will keep their heads above water.

The only thing anyone can do is to sit back and watch how this pans out or this thread will run into a 1000 postings of speculation and end up being locked by AY

81C

That is very pertinent because Hornby cozied up to model zone , one of their many mistakes in the past few years , they started to believe in their own publicity culminating in the ultimate folly of paying a million pounds for an olympic license , only to find shock horror no one wanted the rubbish they produced at silly prices.

 

In the meantime they alienated their Indy retailers , reduced their trade discount and generally ignored them because they thought the best thing to do , again, was not to bother with those that had kept them going over the years.

[Gruffalo]

And now a former director of Hornby is being let loose on/in the port of Dover!

 

Edited to clarify and remove auto correction error creation.