ModelZone seeking Administration

[Dunsignalling]

As an independent retailer I will truly be sorry to see them go. They were the hobby's presence on the High Street or in a shopping mall , places where few independents can afford to be. They, like Beatties before them, encouraged many people into the hobby who then found us independents that were a little out of the way but stocked with the slower moving items that the High Street stores can't afford to stock plus help and knowledge. Sadly I don't think there will be a knight in shining armour to buy the whole chain but who knows there may be some stores saved as well as the jobs of the staff who are employed there.

 

Dave

Evidently, they can't afford to be there either and, as a general retailer covering almost the whole gamut of "modelling", I wasn't interested in even looking at much of what they had on offer.

 

As with all the independents who have closed down in recent years - if you don't use it, don't bleat when you lose it.

 

I'm much more concerned about proper Model RAILWAY shops whose turnover has been badly affected by short supplying by you-know-who.

 

Just how do you survive when you only get to sell 40% of what you think you could?

 

John

[Clive Mortimore]

So apart from 'Thomas', how do we get people into the hobby?

 

And yes, this is a question that's been asked many, many times on this forum, do please don't answer. Let's concentrate on the MZ issues.

 

The thing is, I consider myself a modeller yet the last time I bought anything RTR was ages ago. I've bought kits mostly from the specialist end of the market. MZ doesn't have a chance with someone like me. They need volume (and deep packets) from their customers. Recession,austerity and high prices don't help.

 

But is there room for part-ex or secondhand being promoted? Would that encourage more people?

 

Or do you need the specialist input that very few people have? And they'd be spread too thin.

I think we are wandering off topic but I question the need for youngsters joining the hobby. If they do good. If they don't I will still enjoy my time as a railway modeller. Selfish ....YES but it is my hobby.

[Coombe Barton]

I think we are wandering off topic but I question the need for youngsters joining the hobby. If they do good. If they don't I will still enjoy my time as a railway modeller. Selfish ....YES but it is my hobby.

 

Yes, but we're all getting older - if people can't see new blood the old blood will die out - and then where will that leave the manufacturers? Who will they sell to? How will they innovate?

 

And if they don't innovate in twenty/thirty years it'll all be relegated to curiosities and collectors - Antiques Road Show style.

 

So the real questions - can someone take over MZ? Can they make money? Can they attract the right people to work there? Can they attract the right customers? CAn they attract the right customers with the wil to spend? 

 

In other words, all the microeconomics questions.

[Ian J.]

I wonder if there's a potential opportunity here for The Signal Box (the Rochester one) to go it alone and take on a few of the more relevant MZ stores in the larger cities/towns, say Birmingham, Manchester, Glasgow, Bristol or wherever, and have a very small, tightly controlled chain supplying in the way that the Rochester shop has been doing for a while now?

[Coombe Barton]

Small and tightly controlled to me says the Kernow model - small inexpensive (but great) premises, knowledgeable staff, innovative with specialist products (Beattie Well, O2, Gated stock etc) and a great mail order service.

 

Could that survive in the city centres?

 

[EDIT] If I wanted RTR then I'd think Kernow rather than taking a trip to a city centre location as, rather than having it NOW I'd have the reputation of the shop to back up what I was buying. This said, MZ isn't on my horizon so maybe I'm not the best customer model.

[Stevelewis]

I wonder if there's a potential opportunity here for The Signal Box (the Rochester one) to go it alone and take on a few of the more relevant MZ stores in the larger cities/towns, say Birmingham, Manchester, Glasgow, Bristol or wherever, and have a very small, tightly controlled chain supplying in the way that the Rochester shop has been doing for a while now?

A Very  good  idea  (dont  forget  Chester though)

 

But in reality  I very much  doubt  it,  quite  simply  Overheads.... Rates &  Rent , 

 

   I do hope the  SB Rochester  may be  saved and perhaps  become  an independant retailer  once  more..............  if it were to and  was  properly marketed then it  could  possibly  regain its  status amongst  the top Model railway  retailers in the UK 

[Ian J.]

TSB are small and tightly controlled now, except for the fact they're owned by MZ. So in that sense they already 'follow' the Kernow model you suggest. I was thinking out loud whether they could take their brand and expand it slightly, but keep it to a small, more personal but more national 'brand'.

[The Stationmaster]

The first problem any 'High Steet' based retail operation has to face is that of costs - premises rental, Business Rates, water/electricity, staff costs etc.  All of that can add up to very substantial amounts - here in the Thames Valley shop annual rental in a 'good' position can exceed £100,000 per annum for a double fronted premises, put another way that means that amount in profit before they can even pay for anything else.   The model shop in our town wasn't brilliantly situated so it was undoubtedly paying far less than that but a poor winter season sales wise left him up against it when the next tranche of rent was due, so he shut up shop - and he had a substantial mail order business in diecasts.

 

So in order to compete or stay in the market 'High Street' shops have to do more - the Kernow model is one example, a good secondhand business is another, but steady supply of new product can be critical as can carrying a large and varied stock, ideally supported by the cash flow generated by new products.  Hornby's supply problems of late haven't done many retailers much good when it comes to cash flow and it might not help many when a glut of new product arrives soon and our spending is either concentrated into a short burst if we've squirreled away the money or the shop acts as our bank and pays for the cost of stock until we buy it.

 

Coming back to MZ they do - at least in Reading - offer more in the railway line than 'just r-t-r' as they have paints and materials which are needed by most modellers but they tend to be smaller ticket of course and that doesn't help over much with huge rental and other overhead costs.  So perhaps the model they need is smaller less expensive premises which remain accessible with mail order support at competitive prices.  However as long as they might be tied to concessions their prices won't be as competitive on some ranges until deep discounting begins to change.  Regrettably as long as a deep discounter is selling at either a loss (there are instances) or a ludicrous levels of gross profit the market will be distorted - and that has, and will kill other businesses.

[martin_wynne]

But if you don't showcase the 'toy' end of the market in places where families frequent how are you going to get new people (especially kids) into the hobby?

 

How do youngsters get into other hobbies? Ham Radio; Woodcarving; Metal detectors; Brass bands; Rose growing; Hedgehog breeding? Nothing in the High Street for any of them. But there is still WHSmith. It may not be in a shop window, but it is in the Railway Modeller. At least for now.

 

But maybe the ModelZone problem is not prices, costs, rents, or anything else. It's that kids don't have hobbies any more?

 

Martin.   

[Stevelewis]

Must admit this is sad news, I have used SignalBox for a number of years and have nothing but praise for the service I have received from them. In fact my last order was only 3 weeks ago.

Personally I think this is another nail in the coffin for the Hobby. I love my Railway Modelling but prices are rising at a staggering rate and I have to be honest the cut off line is fast approaching where, enough is enough. You cant encourage new blood to come into a hobby where a loco costs £100+ each.

All the manufacturers are starting to feel the pinch from the push by China for better wages and thus pushing costs up and up. How long before they move production again? Just look at the cost of Hornbys European locos Jouef etc, £200 plus. How long before British outline hits these prices.

If  you  check  back  you will find  that  the  cost  of  todays  locosand  related  model railway  items  is  actually  less in real  terms  than it was when I first  came into the hobby in the  60s!

 

edit  for  example

 

Back in 79  I bought  a  Hornby  A4  ( tender  drive,  good  for  its  time a little  lacking on  detail)  for   £24.00,  average   anuual salary in 79  was  £6200.

 

Today   a  Rairoad version   A4  is around  £72,  whilst not  super  detailed   the loco  is  Loco drive DCC ready  etc and  probably  perorms better  than my 79 version..  The  average UK  wage  in 2012  was  26.500

[Oldddudders]

If  you  check  back  you will find  that  the  cost  of  todays  locosand  related  model railway  items  is  actually  less in real  terms  than it was when I first  came into the hobby in the  60s!

I don't doubt you are right. However, I suggest that expectations have moved on.

 

In those days, Cyril Freezer's advice to layout builders unsure what to do next was "add a loco". Big deal? It was then, when an average layout might only have 4 or 5. RMweb is full of layouts that have several times that number, and the discussion threads are full of wish-lists thirsting for more new designs, please. Even the more competent modellers among us "complain" about how big their pile of unbuilt kits is! Consumerism is now perceived to be part of our hobby - and in a recession, that quickly hurts those whose fortunes are not faring so well. And of course Modelzone customers are probably not the scratchbuilder types, so RTR prices - or at least the opportunity cost of spending that much - do matter. £100 sounds a lot, double that as suggested and a lot of people will start sucking their teeth a bit.

[valeofyork]

Surely one of the most significant factors is that interest in railways generally has gone down. Most of the blokes you see out spotting are middle-aged - very few kids about. I wonder whether this will in future also lead to the demise of some preserved railways - there are a lot of these now, and there can only be so much demand for a Sunday afternoon out having a ride on a steam train, and Thomas days.

[Coombe Barton]

There is the Games Workshop type of approach - workshops - demonstrations - staff with skill and intimate knowledge of the product - smaller stores - some in malls but not the most expensive bit - but above all stock that doesn't cost the earth. How that could translate to model railways I just don't know.

[Stevelewis]

I hate  to  be  harping  back to  the  good  old  days,,,,,,but  in the  days  when  I first  took an interest in  railways  I went  to a  school  close  to  the  manchester to London main line,  every  morning   when  we  lined  up in  the  playground at  5  to  9  we  were 'priviliged' to  witness  the  slow  passage  of  a  top link (usually) loco  on a running in turn  out  of  Crewew  works  after  overhaul the  train  would be   about  to  stop  at  our  local  station  Levenshule  North.

 

What  i  am  getting  at  here  is   that  there  was  an immesnse  variety of  motive  power on view  masses  of  steam  classes  and  a  few  early   diesels  and  DMUs..

 

Whereas  today   the  younger generation who do observe  the  railways  do  not  have anywhwere as much  variety,  its  almost  like  ( but  not  quite)  'youve  seen one  you've  seen them all'

 

I appreciate  that  the preserved lines  do offer  an  alternative   snapshot  of  what  railways  were  like, but as  mentioned in a previous  post  there  are  so many  of  these around but  the  greatly  increased  cost  of  actually  getting to them ( to say nothing  of  the poor  weather in the  peak periods  lately)  appears in some  instances   to be  causing  a  decline in paying  visitors

 

Anyway  this  is  way of  the  MZ topic............  my apologies!

[The Nth Degree]

We have to be a little more realistic here on a number of levels.

 

Firstly, the business itself is not in a bad position, as long as it can renegotiate rents or relocate without compensation or loss. It will survive, I don't doubt that to any great degree, but I think the retail model it uses needs to be modified slightly to account for market conditions like we have today.

 

Secondly, model railways are a very small proportion of ModelZone's turnover - less than 12% based on accounts published a couple years ago. So how will >12% of a minority stake in the hobby affect the hobby overall? Not a lot. Hornby may need to release their exclusive concession agreement with MZ to include another chain, or change their retail channel strategy.

 

Lastly, the product lines that ModelZone stock has been in decline for a generation or more to reach a reasonably stable, but fairly low volume plateau. Nothing will change that unless batteries and game pads suddenly find themselves extinct - it's not going to happen. In the young pastime sector there is actually a slow shift out of electronics into sport, which is even further away from indoor hobbies.

 

Generally, it's not looking great. Rationalising high cost retail outlets and into mail order will ensure survival but this is double-edged by having less high street exposure - you could argue that stament by saying that without retail infrastructure you can afford more advertising/marketing.

 

This is and always was a small market and it has to be approached in that way.

[Dunsignalling]

Small and tightly controlled to me says the Kernow model - small inexpensive (but great) premises, knowledgeable staff, innovative with specialist products (Beattie Well, O2, Gated stock etc) and a great mail order service.

 

Could that survive in the city centres?

 

[EDIT] If I wanted RTR then I'd think Kernow rather than taking a trip to a city centre location as, rather than having it NOW I'd have the reputation of the shop to back up what I was buying. This said, MZ isn't on my horizon so maybe I'm not the best customer model.

I'd take a day trip to (for instance) Camborne ahead of visiting any city centre (let's face it, they are all more or less the same) and with a decent on-line presence and mail order capability, does any specialist shop need such a location?

 

More to the point, is it possible for any 'niche' retailer to generate enough turnover to cover city High Street costs whilst offering the sort of discount prices most of the people on here seek? I think not.

 

John

[Ruffnut Thorston]

Has anyone else noticed a disturbing fact of the recent "administration" of shops, that being not accepting "Gift Vouchers" that were paid for in advance or, az Model Zone seems to have been instructed, only 50%?

 

Is this not "morally wrong"?

[scorpion]

as I read it they are not saying they are only worth 50% 0f face value but that you can only use them for 50% of the purchase price of the goods, ie, you have £50 of vouchers so you must spend another £50 of new money on a £100 item,

 

still dubious I know but you end up with goods equal to what you paid for

[Coombe Barton]

I pity the kid who has been given a tenner's worth of vouchers and has to find another tenner before they get full value.

[talisman56]

Not a loss in my case-the Bristol Galleries store never had anything worth buying in N-gauge...

[talisman56]

Has anyone else noticed a disturbing fact of the recent "administration" of shops, that being not accepting "Gift Vouchers" that were paid for in advance or, az Model Zone seems to have been instructed, only 50%?

 

Is this not "morally wrong"?

 

Having been thru the Administration of a large eletrical retailer late last year, the Administrators in that case had to put a stop on the stores accepting Gift Vouchers until they had investigated whether the vouchers were prepaid or not - if the retailer had received funds to cover the cost of the gift vouchers then they were later accepted, if the vouchers were payable on the retailer submitting them to the issuer for payment then they could not be accepted.

 

The acceptance of the gift vouchers is apparently covered by the rules governing the running of companies by administrators - the administrators can continue to trade the company but they cannot do anything which might increase the indebtedness of the company, and accepting non-prepaid gift vouchers is potentially breaking that rule.

 

It would depend on what model the gift vouchers are that Modelzone (in Administration) is handling.

[asmay2002]

i'm stuck by the fact that in any other area of retail people are bemoaning the demise of local independent stores because of the encroachment of chains which turn all high streets into clones of each other  (Starbucks, WH Smith, Waterstones,ToysRus,Tesco, etc.) whilst this thread seems to be lamenting the demise of the problem. 

[Clive Mortimore]

Hi Andy, 

 

In many cases Modelzone is the only local model shop.

[Glenn_RhB]

The web site has gone, as has the SignalBox in Rochester site. Quite a bit of Press interest, comment from Hornby about losing one of their main sources of High Street sales, could there be a return to the  privately owned model shop? both the Ashford and Sittingbourne R/C stockists have developed small railway sections, but then, Hobby Craft seem to be slimming down (certainly on the modelling materials side)

[micklner]

http://en.wikipedia.org/wiki/Modelzone