Keep the Faith

Exactly. I play with trains (can't pretend it's more sophisticated than playing!) to get myself and the kids away from screens. If I am wearing VR goggles that isolate me from the world then what is the point of a physical model? AR on the other hand could be a fun additon. Pull a model train into the station and then hold up the iPad to see virtual passengers, freight being loaded, people around Skaledale houses, steam from the loco etc.

The argument about the true home of Hornby is fun but ultimately meaningless. Model trains were made at Binns Road for around 43 years but Dublo for only about a quarter of a century. Tri-ang stated in Margate in 1954 and as Hornby from the mid 1960s. So with 65 years of history in Margate and all active staff, even good old Peter from the Visitor Centre, knowing no other base, I think it is reasonable for Hornby to argue that they are "coming home" even if it is only to save a few quid. Good luck to them.

The show was heavily edited for entertainment value. Remember the scene where SK was talking to the Warley organisers about the Rails banners and we were shown queues of visitors waiting to be let in? Cut back to SK and he is walking past stands still being constructed. These scenes were shot hours apart but presented as contemporaneous. This show was cut to generate a sense of urgency, immediacy, excitement and humour. Having said that, it would be unsurprising if the Hornby staff were unimpressed with more changes. They must live in fear for their jobs every day!

If our hobby was big enough to be noticed then this crowdfunding saga would make for a fascinating case study on how to get it wrong. As other have pointed out more eloquently than I can, successful crowdfunding projects rely on building excitement and anticipation to keep existing customers engaged and to continue to attract new funding. It is a real shame that this apparent debacle could affect the credibility of future similar projects from other potential vendors. In a hobby that is probably becoming smaller non-traditional funding could be the only way that some projects are viable.

Totally off topic but thanks for an interesting post. This move to extremes seems to be reflected in much of life. Take politics, Brexit, Trump, Corbyn, Le Pen, Viktor Orbán etcetera - their popularity would not have seemed possible just a few years ago. In relation to the question of young grandparents, it is remarkable that teen pregnancy rates in the UK have halved in the last decade and are at an all time low.

Lots of journalist at Toy Fair. There are three trade mags but they get a lot of general and lifestyle journalists plus bloggers and vloggers galore. This is a excellent coup for Hornby and will help open doors to major accounts. This deserves a big thumbs up from enthusiasts as more train sets sold means more money for investment in tooling as well as lots of kids who may take the next steps into the hobby.

Half year results are now confirmed for release on Thursday 22nd November.

Interim results must be due any day now. Announcement was on 17th November in 2017, 24th November in 2016. Fingers crossed for some sign of an improvement. It's only part of Hornby sales but the UK toy market is down 11% YTD. Is there any reason to think the hobby market is in a better state? https://toyworldmag.co.uk/blog/not-beating-around-the-bushits-the-friday-blog/ (paragraph 4)

There have been quite a few successful CMA prosecutions and by its predecessor,the OFT, pre-2014. What happens in practice though is that it won't reach court. Once made aware of a potential offence the CMA sends a warning or advisory notice to the company. Few businesses, once they have received such a letter, will continue down the same path. A fine of 10% of turnover, legal costs and the resulting negative PR are usually a big enough incentive to cease. Only the most egregious cases reach court.

Andy, can you name one category where consumers approve of price controls that keep retail prices artificially high? A buoyant manufacturing and retail sector is great but achieving this through what looks like price fixing is not. Waitrose and M&S can thrive in a world of Aldi, Lidl and now Jack's by offering a differentiated service. Hornby et al need to be supporting independent retailers to make their shops special with trade marketing support.

Hornby can set its COST prices to retailers at any level they like in order to make the margins they need. You still get your two locomotives although you may have to pay more if the retailer is paying more to Hornby. What is less clear legally, and certainly objectionable as a consumer, is any attempt to prevent a retailer from selling to us, the consumer, at a price than the retailer WANTS to sell at. Legend is correct in post 60, what other category would see consumers happy about interference like this resulting in higher retail prices?

The problem is that "levelling the playing field" is not Hornby's, Bachmann's or Heijan's job. At least not through trying to restrict discounting by threatening supply. Brands can support specialist retailers with marketing, instore events, product launches, exclusives, branded signage, profiles in the Engine Shed blog etcetera. If any of these manufacturers want to control the price in the market then they have a perfectly legal route, to only sell on their own websites or vertically integrate retail by running shops. The only loser in this current scenario is the consumer and that is not something to celebrate or praise.

Strange question, one that should be addressed to Hornby. I'm just sharing 30 year's experience in brand marketing. As a consumer, not very keen on manufacturers attempting to keep prices artificially high.

For a household name this is a pretty risky strategy. The legality of this, as explained above, is unclear, but it never looks good for a brand to be seen to be attempting to fix the price of their products. Bachmann are under the radar so selective distribution agreements will not cause much of a stir. The Competition and Markets Authority would certainly be eager to have a good look at a high profile target like Hornby. The newspapers love to knock a brand and just one call to The Sun or The Daily Mail could see them in a PR nightmare. It was clear from their handling of the Airfix Afghan House brouhaha that the team at Hornby Towers are lacking in PR nous. "Hornby Grinches try make Christmas toys more expensive" is not a great advert regardless of its accuracy.

This is not without risk as Warner Bros has over-licensed Harry Potter. There is too much product available on the market for a franchise that ended in 2011. The success of Fantastic Beasts at the box office has not translated into sales of consumer products so WBCP is trying too hard to milk the HP cash cow. Having said that, the HP license is now skewing older which may help Hornby. What price a Hogwart's Express train set in 2019 - north of £120? Disney has made the same mistake with over-licensing Star Wars and as a result there was a lot of unsold stock which ended up being heavily discounted, something the regime at Hornby don't seem keen on. DC is a bit "meh" when compared with the licensing juggernaut that is Marvel. Positive share price response but with so few shares floating around movement is likely to be exaggerated.

Volume of advertising doesn't necessarily equate to value of sales - or more importantly to profitable sales. What it may indicate is the hobby moving toward a cottage industry model both in terms of supply and retail. The sustainability of a PLC like Hornby in a low-volume hobby with a large overhead is very unclear and has been for a number of years.

I certainly agree with you that they have failed to deliver value from Corgi, Airfix and their non-UK brand acquisitions. Sure, some great looking new tooling from Airfix but have they grown the category or found new retail channels? Corgi is as good as dead. I am not sure I would agree with any part of the UK model railway market being buoyant.

Plenty of experience of Hornby and other hobby/model rail operations with Stansfield, Mulhall, Kohler and Davies but are these the right people? What worked in the 1990s is almost certainly not the solution as we head into the 2020s. Corgi, Hornby, Scalextric and Airfix all face the same problem of having moved from mass market toys to niche hobby brands with a declining (dying) customer base and virtual extinction of the high street model shop.

Disappointing to see the RMWeb forum users behaving like a bunch of sniggering schoolboys over the word "Gay". Grow up.

More than a little off-topic. It's the Sekt and Cava v Champagne and Prosecco dilemma. Quality over image. Long may it continue - some real bargains to be had from Spain and Germany.

The move from production beyond China is not going to happen overnight and is not going to be complete but it is happening right now. Customers of factories in Guangdong have seen how the area is transitioning away from toys, clothing and plastics to high-tech consumer electronics. Western retailers and brands are seeing factories close that have supplied them for over twenty years. The problems Hornby is experiencing with sourcing outside China will be largely down to micro-volume categories like model railways being pretty unattractive for factories. Who would want to set up a factory to make low volume production runs for a category where the retail network is shrinking and the core customer base is dying? The big risk for the hobby is if any of the remaining factories decide to close to model railway production. We already see the challenge that the UK brands have getting production slots in China.

The world is changing. Hasbro CEO is Brian Goldner is eyeing up a move away from China production. https://www.foxbusiness.com/markets/hasbro-to-move-more-production-outside-china-due-to-tariffs https://www.toynews-online.biz/law-politics/hasbro-outlines-plans-to-move-production-operations-out-of-china Mattel, LEGO and Hasbro already have significant factories in Mexico. Expect to see more production from BRICS countries (Brazil, Russia, India, South Africa, ignoring China for this exercise) the MINT countries (Mexico, Indonesia, Nigeria, and Turkey). Don't forget to add in Malaysia, Pakistan, Vietnam and Bangladesh. Together that's a population of close to 3 billion. Global sourcing is about to get really interesting.

Mike is absolutely right in that we don't know Hornby's set up with their factories but I would be amazed if the Chinese factories were working on any other basis than letter of credit - probably a 30 day basis. In my experience the Chinese will not even order materials until they have seen the LC. I suspect Hornby are facing a supply challenge will be their EU factories struggling to get credit insurance. This may explain the reported poor supply of Humbrol paint (if these are UK supplied). In the current retail climate there is also a real prospect that Hornby are struggling to get credit insurance for their customers and they then face the decision of whether to ship goods without insurance. That's a big risk after Modelzone, Toys R Us, Maplin.

http://otp.investis.com/clients/uk/Hornby/rns/regulatory-story.aspx?cid=1477&newsid=1057137 Not pretty. 19 June 2018 Hornby PLC Hornby ANNOUNCES ANNUAL RESULTS Hornby Plc ("Hornby"), the international models and collectibles Group, today announces its results for the year ended 31 March 2018. Results Highlights · Revenue of £35.7 million (2017: £47.4 million) · Reported loss before tax £10.1 million (2017: £9.5 million loss) · Underlying1 loss before tax of £7.6 million (2017: £6.3 million loss) · Reported loss after tax £9.9 million (2017: £9.7 million loss) · Exceptional items of £2.3 million (2017: £3.3 million) including costs relating to the restructuring of the business and refinancing in 2017 · Net cash at 31 March 2018: £3.9 million (2017: £1.5 million) 1 Underlying figures are before amortisation of intangibles (brand names and customer lists), and net unrealised foreign exchange movements on intercompany loans and exceptional items Current Trading Group Sales for the 10 weeks to 8 June 2018 are lower than we expected. This is due to the ongoing impact of insufficient investment in tooling in the past, coupled with late placing of purchase orders with suppliers. There is also a backlog of stock at our retailers from previous decisions to bring sales forward by discounting, which will take time to work through. Despite these difficulties, gross margin for the Group for the 10 weeks to 8 June 2018 was 5 percentage points higher compared with the same period last year, reflecting the absence of discounting initiatives since October 2017. Lyndon Davies, Hornby Chief Executive Officer and Interim Chairman, said: "In the first seven months that I have been at Hornby, we have assessed our position and confronted the reality of the situation in which we find ourselves. Tough decisions have now been taken and we are currently laying down the foundations for our future success. There is a new energy in the business and I am excited with our plans as we re-engage across both domestic and international markets with these well-loved brands."

"third-world status" - really?