Hornby 2014 - A fatal sting for retailers?

[Jonboy]

Its funny because here in Didcot I don't feel I have a local model shop to browse in......the nearest shops are all around an hours travel away and I never make a special trip to one and this has been the situation for several years now.

 

I therefore am not sure Hornby would see a long term future in local shops.

 

As a parallel comparison look at the actions of HP's stakeholders around four years go when they announced they intended to sell off their PC manufacturing business...now look at the PC market today and I would question who was thinking right.

[edcayton]

Big Grey thing in corner!!!

 

It crosses my mind that Hornby "know" that 85% of thier market is train sets and collectors......why would either of the group go to a model railway shop? just a thought (but not a wrong one)

I certainly can't tick "like", and I have no figures to agree or not, but I suspect there is more than a grain of truth here Mickey.

 

Ed

[The Stationmaster]

But when these terms could possibly affect the future of the hobby we should all be concerned. And while we are seeing this from the perspective of retailers and consumers, there certainly seem to be a few retailers on here all saying the same thing. So not getting worked up about things could lead to independent retailers going, no place to browse and model railways becoming Internet only. It might happen, but I sincerely hope not and certainly prepared to get worked up about it. If not Hornby will just roll over you, and that is not necessarily what's good for the hobby.

 

That is very much my thought on this - indeed I have heard it expressed in terms of 'if I don't accept their terms does that mean I can't sell Hornby any more?'  And in view of experience over the past year or so I'm about as likely to place an advanced order for anything with Margate as I am to take a trip on the Trans Siberian or across Canada.  I get good service from my retailers and I don't want to lose it - even at the expense of possibly paying more with them than buying electronically from Margate.

[Dunsignalling]

Big Grey thing in corner!!!

 

It crosses my mind that Hornby "know" that 85% of thier market is train sets and collectors......why would either of the group go to a model railway shop? just a thought (but not a wrong one)

"Hornby for Collectors, Bachmann for Modellers" raising its head again

 

But if that was really the case, what would be the point of Hornby making the stuff in the back third of the catalogue? Only model shops ever sell most of it.

 

I think your principle is probably right but my guess is that whilst 85% might have been somewhere close in the exceptional year just gone, it would be more like 65% in more normal times.

 

Anyway, where does the line between modeller and collector lie?

 

Most of us straddle it; I certainly do. As an otherwise committed fan of things ex-LSWR and Somerset and Dorset, I have just bought a L&Y Radial Tank and ordered a Dukedog. I won't be getting a P2 or half-a dozen A4s though, just not my thing!!!!!

 

 

John

[great central]

Having dipped into this thread several times, I'm seeing some parallels with my previous business. A bit over 10 years ago, I had to close my shop down.

I'd tried introducing model railways to try to keep the business afloat in the face of an attack on my core business (video rental), but due to the new terms imposed by the film distributors, the whole business quickly became unviable.

In short, the independant video shops were told they could only buy 'rental format' videos and DVDs, whilst Blockbuster, at least, were given preferential terms. In general a 'rental' film cost up to, and mostly was, £55 + VAT. Blockbuster allegedly paid as little as 99p! They had to then share the revenue that they got from rentals but if the film didn't rent it had still only cost them 99p, not the £55 paid by such as me.

Around the same time the film companies 'got into bed' with the supermarkets, and most films went straight to retail at around £10. These films were essentially the same as the 'rental' copies but with the addition of a warning that if the user had rented the film they were in breach of copyright law as the film was not licensed for rental and to report the fact to a freephone number! The independent video stores were quickly finished, as the industry trade bodies had warned. That Blockbuster has survived this long I'm really surprised!

The technology was moving quickly towards 'video on demand' which has now finished off Blockbuster but I can't help but think that the film companies themselves have hastened this.

Obviously this is different as you can't (yet) download a model, who knows in the future? But there were a good many films that, although very good only got a decent airing on video, without which they would have remained as 'cult' films. Maybe Hornby are hoping to create a 'niche' market where they can dictate the prices and match production tightly to demand, thus ensuring they get their money back on every item, fallout from the 'Olympic' tat?

[Paul Cram]

But when these terms could possibly affect the future of the hobby we should all be concerned. And while we are seeing this from the perspective of retailers and consumers, there certainly seem to be a few retailers on here all saying the same thing. So not getting worked up about things could lead to independent retailers going, no place to browse and model railways becoming Internet only. It might happen, but I sincerely hope not and certainly prepared to get worked up about it. If not Hornby will just roll over you, and that is not necessarily what's good for the hobby.

I think you are over stating this. It is only in the last few years that I have become aware of the quality of the ready to run products and even then have bought very few mainly because they do not produce them to my gauge. Those that I have bought require considerable time spending to modify. As I have said before my local model shop does not cater for 90% of what i require so if they disappeared I would not be much worse off. Everything I do get from them can be bought elsewhere and I am never that desperate for something I can't wait for the post or an exhibition. I and several others that I know would not be affected. I have more than enough kits to keep me going and a lack of new modellers is not going to have an impact. The recent HMRS newsletter points to a declining membership due to natural causes and a lack of new members. Must youngsters these days are internet savvy and get most of their purchases this way. I think that is more of a problem for the local model shop. Perhaps Hornby are just moving with the times?

[Dunsignalling]

i must have missed the Bachmann bit of thanks for reminding me

 

so you dont agree that Hornby make trainsets? Im pretty sure they do cos I seen em

I didn't mention trainsets in my post, but I don't think it implied I deny their existence.........

[Dunsignalling]

The direct sales with a limited presence in concessions idea is something that is entirely possible. Personally I wouldn't like it but I also think it could work for Hornby. If they did cut the middle men out of their sales they'd remove a tier of overhead and profit allowing them to improve their take and reduce price increases in the face of rising production costs. The risks are that they'd lose presence and lose the indirect relationship between retailer and customer, a relationship which is highly unlikely to ever be replicated between customer and sales channel of a large company. 20 years ago, maybe even 10 years ago I'd have called it a dreadful idea on all levels but today with the changes in shopping habits whilst I may not support it from a personal view I think it could work. This isn't unique to Hornby either, other niche products (I use niche in terms of general retailing) have been looking at the same model.

It is, indeed, just Hornby going down the same road that the makers of many of the kits-n-bits some of us rely on have already trodden.

 

However, specialist model retailers offer much advice and guidance to newcomers and explain how all the bits and pieces (which many would never otherwise purchase at all) fit into the scheme of things.

 

Many dealers are quite capable of continuing without dealing with Hornby (let's face it, they've more-or-less been doing so for quite a while already) and there is plenty else that they can sell INSTEAD. I think losing the profile Hornby have in that sector would do them no good at all.

 

They would certainly have to substantially up their promotional game to compensate. Otherwise, imagine a potential beginner (or his mum) with little overall knowledge of model railways but aware of the Hornby name. He/she walks into a model shop a couple of years from now. The shelves are filled with boxes carrying various brands but with nothing marked Hornby outside the second-hand section; it would be natural to assume that Hornby no longer made models.

 

If you were the shopkeeper, would you even mention Hornby or just get on with selling the goods you do stock? 

 

John 

[Dunsignalling]

I Dint mention Bachmann For Modellers but you seem to think I did......

 

I must have my own invisible ink that even I cant see

 

Simple thing is that Hornby are as to trains as Hoover are were to vacuum cleaners...except Hornby dont  go bust over silly gimmicks ...

They did have a pretty good stab at it, though!

 

OK! fair enough. I inferred "Bachmann" as much as you inferred a disbelief in trainsets on my part.

 

But. If you go into a shop and ask for a Hoover you won't get a "Hoover", and if you go into a shop that ceases to sell Hornby you won't get "Hornby".

 

John

[woodenhead]

As a parallel comparison look at the actions of HP's stakeholders around four years go when they announced they intended to sell off their PC manufacturing business...now look at the PC market today and I would question who was thinking right.

And two months later they changed their mind and still compete today in the PC market, in fact I got a rather nice new HP laptop just a few weeks back. Their very latest offering has an Xbox kinetic style gesture recognition bar built in.

[Fenman]

... imagine a potential beginner (or his mum) with little overall knowledge of model railways but aware of the Hornby name. He/she walks into a model shop a couple of years from now. The shelves are filled with boxes carrying various brands but with nothing marked Hornby outside the second-hand section; it would be natural to assume that Hornby no longer made models. ...

 

I understand your point, but you're describing the "internet generation" - do you really imagine that, if they were interested in model railways, they wouldn't have been actively Googling? Hornby's continued existence would be obvious to them.

 

And since many of us no longer have a "local" model shop, the chances are we wouldn't be walking into one anyway; how many Mums in central London would know where to go, other, perhaps, than Hamleys?

 

Paul

[Dunsignalling]

I understand your point, but you're describing the "internet generation" - do you really imagine that, if they were interested in model railways, they wouldn't have been actively Googling? Hornby's continued existence would be obvious to them.

 

And since many of us no longer have a "local" model shop, the chances are we wouldn't be walking into one anyway; how many Mums in central London would know where to go, other, perhaps, than Hamleys?

 

Paul

I must try to remember that, in this part of the country, we have a disproportionately large share of the remaining 'traditional' model shops.

 

I do take your point about the internet, but I've been going into my 'local' at least once a week lately to chase up new models and a common opening to a conversation in the lead up to Christmas has been: "We've been looking at X or Y on the internet, can you explain how......".

 

Unfortunately, the situation in Central London remains much as it was before the internet was invented.

 

John

[woodenhead]

We have to be careful of assuming everyone has our buying techniques. I'd like a local model shop but for me that is a trip to Altrincham or Shaw, there are a couple of others in Warrington and whitefield but I wasn't struck by them when I last visited. Generally I browse the Internet but usually end up buying from Kernow or Hattons straying only to other online retailers when items are rare.

 

If I wasn't a modeller then I would expect to find a train set in Argos, Toysrus or my local supermarket(at Christmas). Out and about in shopping centres then Modelzone would be where I would have bought extra stock and Hornby track from and that's likely to remain so with Whsmith now fulfilling that non modelling after market.

 

Lets face it, the high street is not what it was, the face of retailing has changed forever and Hornby are clearly adapting

[Guest maxthemapman]

As a person who has self-published a book, I am very sympathetic to the position of Hornby. I sell copies by mail order, and I am prepared to offer a 50% discount for units of ten to any retailer (or individual for that matter) who is prepared to purchase on a non-returnable basis. Selling the odd copy here and there to retailers on an individual basis really isn't worth the sort of discount that they expect, or need to continue functioning. Likewise, there is no point dealing with wholesalers for small numbers of units because two bites out of the pie leaves not much left for me.

 

Times are tough, and production costs are high. For people who want to buy rtr models, what is more important? That these models continue to be produced, or that there is a local model shop to call into? You might not need to make a choice right now, but a couple more years of dire results from Hornby, and you might just have a difficult decision to make.

[edcayton]

For many years Hornby had the market to themselves. The rise of Bachmann has given them a lot to think about. The general view on here is that Bachmann have beaten them in the "scale model" market.

 

The latter don't seem to want to compete in the junior/trainset market, but we find Hornby in Tesco's, Argos etc. (do Hobbycraft and ToysRUs still sell them?). Hornby have pulled back in the super scale model area, bearing in mind that most of their target customers may be less than gentle with the models.

 

Maybe Hornby have decided to concentrate on big ticket items.There is just as much admin etc in selling a buffer stop as in a loco/set. Maybe they're just not bothered with the small profits in small items.

 

Perhaps those who want to go beyond the train set will find their way to Peco, etc via exhibitions and hence to the few local(ish) model shops that survive

 

Ed

[APOLLO]

Life is a journey so they say.

 

I feel that if the Hornby company was on a London to Glasgow journey they turned off the west coast mainline at Farington Curve Jcn a couple of years ago, and are rapidly approaching Blackburn station.

 

I hope they can turn left to Hellifield and get back on track at Carlisle via the Long Drag, but they may go on to Burnley, and if they take a left at "last chance saloon" Gannow Jcn, then its a long, long single track to a buffer stop at the back of beyond.

 

Brit15

[6959]

As a person who has self-published a book, I am very sympathetic to the position of Hornby. I sell copies by mail order, and I am prepared to offer a 50% discount for units of ten to any retailer (or individual for that matter) who is prepared to purchase on a non-returnable basis. Selling the odd copy here and there to retailers on an individual basis really isn't worth the sort of discount that they expect, or need to continue functioning. Likewise, there is no point dealing with wholesalers for small numbers of units because two bites out of the pie leaves not much left for me.

 

Times are tough, and production costs are high. For people who want to buy rtr models, what is more important? That these models continue to be produced, or that there is a local model shop to call into? You might not need to make a choice right now, but a couple more years of dire results from Hornby, and you might just have a difficult decision to make.

 

Exactly the same happened to my book publishing adventure 25 years ago. Bookshops placed an order for one book only when they had an order and then wanted it delivered like now. The booksellers who bought 20 copies then forgot to pay.  At the time, the general book discount was 35 percent  for 1 -2 copies and 40 percent for 3 or more. I tried to pursuade a shop to buy at 25 percent discount and his straight reply was that he had a certain amount to spend and based his yearly income on 35 percent minmum from every publisher. In 1980s it cost about 35 Pence to post a book parcel weighing 1kg but was about 4 quid a few years ago. When I paid in cheques the Midland charged me 35 Pence per cheque. The tax man wanted his cut for books sold even though I had not made a profit on printer's price, and then wanted tax for books not yet written. So much for small business. I gave up in the end because it was more profitable working a couple of hours overtime during the wek plus a Saturday morning in my PAYE main job.

[Brian D]

I seriously fear for Hornby.  The brand has had a chequered history going back to Hornby Dublo through Triang Hornby to its present Hornby manifestation.  Perhaps time for another revolution in the brand's life cycle?  Just a thought.

Regards,

[berwicksfinest]

This actually makes for interesting reading !!

 

What strikes me though is that several times I have tried to contact customer services and been either fobbed off or ignored, but I am going be the one providing their income.

With Hornby's current pricing. Am I going to spend my money in Shiny Red Boxes.................................NO!!!

 

Sadly I have the best money reducing agent known to man, A wife and two daughters, I like every part of me attached and if i walk in with a £150 loco that ain't going to happen.

 

Whether box shifters or independent with prices rising so significantly i the past couple of years, I am buying as cheaply as I can and Modelling .

[andyman7]

This actually makes for interesting reading !!

 

What strikes me though is that several times I have tried to contact customer services and been either fobbed off or ignored, but I am going be the one providing their income.

With Hornby's current pricing. Am I going to spend my money in Shiny Red Boxes.................................NO!!!

 

Sadly I have the best money reducing agent known to man, A wife and two daughters, I like every part of me attached and if i walk in with a £150 loco that ain't going to happen.

 

Whether box shifters or independent with prices rising so significantly i the past couple of years, I am buying as cheaply as I can and Modelling .

I'm sad to here that, I an only say that my own dealings with Hornby customer services have always been very good

 

As a brand it has survived 3 owner receiverships and lasted nearly a century so I suspect it has life in it yet 

[newbryford]

Life is a journey so they say.

 

I feel that if the Hornby company was on a London to Glasgow journey they turned off the west coast mainline at Farington Curve Jcn a couple of years ago, and are rapidly approaching Blackburn station.

 

I hope they can turn left to Hellifield

 

Then they'll go past my back door............

 

Cheers,

Mick

[robmcg]

That is very much my thought on this - indeed I have heard it expressed in terms of 'if I don't accept their terms does that mean I can't sell Hornby any more?'  And in view of experience over the past year or so I'm about as likely to place an advanced order for anything with Margate as I am to take a trip on the Trans Siberian or across Canada.  I get good service from my retailers and I don't want to lose it - even at the expense of possibly paying more with them than buying electronically from Margate.

 

I do not know the percentage of Hornby PLC's projected income from independent UK shop sales, but for shop owners and buyers in NZ  dealing in Hornby via bricks and mortar became rather difficult; either you accepted a model from a small range 'in stock' or you waited, typically 5 weeks for an order to be fulfilled via the wholesaler or factory. Sure you got personal service, but you might pay about £20 more than an equivalent engine bought via the web and a box-shifter or even a UK web-savvy seller like Kernows, who have brilliant service , you save money and receive an item in about 10 days by tracked packet airmail. 

What you do not get in the latter case is the personal service face-to-face, nor the chance to take an engine out of a box and test run it, and then decline it?  Shop sale engines may have been un-boxed and re-boxed several times before a less fussy buyer appears, or it gets discounted. If it is faulty, you might get your money back immediately. With web sales you return a faulty item and receive a bank credit when the item is received by post at your expense.

 

The model shops which remain here in NZ are either based on very wide product ranges and possibly toys too, of which Hornby is a very small part, or are cottage-industry things attached to museums and so on, or are almost 'hobby' shops for owners with low overheads, even trading from home. 

 

Not sure how this relates to the UK., but I am told, and read, that most High Street shops in the UK are in deep trouble, as they are here.

 

Again I feel sorry for retailers who depend, or recently depended on Hornby for turnover. The feeling in the first messages was that Hornby have in a sense betrayed retailers with broken promises, which is bad.  I hope the re-definition of relationships in retailing early next year works out ok.

[APOLLO]

Then they'll go past my back door............

 

Cheers,

Mick

 

Let us all know what engine is pulling it, look out for the handrails  !!!!!!!!!!!!!!!

 

Brit15

[newbryford]

Let us all know what engine is pulling it, look out for the handrails  !!!!!!!!!!!!!!!

 

Brit15

 

They are doing a yellow 08417 in the 2014 range...... I wonder.....?

 

Cheers,

Mick

[Pandora]

We have had a few postings about new and S/H models.

to draw a parallel with the extremely competitive car retail industry.

 

The car dealers make more money from selling used cars on the forecourt than  new cars fresh from the factory.

 

With the restricted supplies of Hornby, and their new structures in pricing,  then  good quality S/H and trade ins may  be the keystone of model shops in the future