Hornby Trading Statement Published 22 April

[JohnR]

I'm assuming part of the stock mountain were Class 66s - Rails now offering them at 33% off £64.95 each. 

[The Stationmaster]

2 hours ago, JohnR said:

I'm assuming part of the stock mountain were Class 66s - Rails now offering them at 33% off £64.95 each. 

That fits with the sort of reduction level that comes from items sold out of the longer standing stuff in the warehouse.  Kernow are listing the W1 in late BR livery at a similar level of discount (33.2%) which is a larger discount than their usual discount level on the other W1 and A4 models they have in stock

[Legend]

The 66 market is probably now saturated at the Hornby level - I wouldn't be at all surprised if they are in slow moving stock .  Anything in "made up" liveries like the W1 also not a surprise  and I'll bet you Turbomotives will be appearing shortly . 

[GordonC]

9 minutes ago, Legend said:

The 66 market is probably now saturated at the Hornby level - I wouldn't be at all surprised if they are in slow moving stock .  Anything in "made up" liveries like the W1 also not a surprise  and I'll bet you Turbomotives will be appearing shortly . 

 

The Class 87s (87006 and 87009) have featured in sales recently and there seems an abundance of Mk3 and Mk4 coaches in offers. I'd expect they'll be involved in the stock pile.

[Michael Hodgson]

7 hours ago, Legend said:

it’s a wonder the handle hasn’t fallen off 

So it's not yet been reviewed by Sam's Trains .

[Ravenser]

11 hours ago, adb968008 said:

There is a range of mugs..

 

Corgi, Scalextrix, Airfix and a Tin one for TT120.

we digress.

 

 

 

Joking aside,. "merch"/tat is clearly an element of the issue. 

 

I remember the Hornby stand pre-pandemic as being a "pure" display stand not selling anything. Bachmann have sold off their stand for many years , the Dapol stand is in effect a factory discount outlet ... But Hornby have started selling TT:120 off the stand, and they are also offloading some items from the stand which are presumably heavily in surplus. And probably represent things the trade won't touch with a bargepole

 

At a recent large event attended by the Hornby stand they were flogging discounted mugs , so presumably there are far too many in the warehouse. The collectors club 2022 and 2023 wagons were also being cleared cheap - if you need a milk tanker for a project now's your chance. And a pile of the very toylike 0-4-0T in red livery were going for silly money for a silly loco - useful if you need a jack-rabbit 0-4-0 chassis...

 

But this problem seems to be across the brands - at the adjacent Airfix stand they were trying to shift a pile of Dambusters Anniversary watches. At least mugs are cheap , and they aren't tied to a date..  One well-known model railway boxshifter had two Hornby Railways jigsaws on offer: that bit of merch must be some years old,. But they also had two Airfix jigsaws and a Corgi jigsaw . This particular dud idea seems to have gone across the group

 

Also on the Airfix side of the business almost all the major kit traders seemed to have Airfix Titanic kits in at least 2 scales - the 1/400 box is pretty well... Titanic. As far as I can make out the 1/400 kit is not a recent release but seems to be 3-5 years old. It's not cheap, either. A demo stand allowing the children to have a go at building a plastic kit was well stocked with kits and Airfix 1/72 Focke Wulfe 190s and Messerschmitt Bf109s were very much in evidence. If you are going to donate stock for that kind of exercise, I presume you donate kits you simply can't shift

 

I've tended to assume that Airfix was the most successful brand in the Group but there may be an element of "the grass is always greener on the other side"  in that view.

 

The Oxford Diecast stand is a relatively recent innovation at model railway shows so far as I'm aware, and with bargain bundles, bins of defective returns priced to clear, and multibuy deals it does smack of a clearance operation as well as displaying new models

 

SK was something of an aging showman pulling eyecatching rabbits out of hats with each year's annual announcement . But it looks like many of the rabbits left a pile of droppings on the warehouse floor.

 

And "merch" and attempts to "leverage the brands" look like they have generally been commercial blunders

 

[AY Mod]

2 minutes ago, Ravenser said:

Bachmann have sold off their stand for many years

 

Incorrect; yet again.

 

They used to have returns for sale, some years ago that was moved to a separate stand at no more than two events a year. That has now ceased, replaced by events at the GCR for the Collectors' Club. Other than that the only thing to 'buy' is to sign up to the Collectors' Club.

[john new]

40 minutes ago, Ravenser said:

 

Joking aside,. "merch"/tat is clearly an element of the issue. 

 

I remember the Hornby stand pre-pandemic as being a "pure" display stand not selling anything. Bachmann have sold off their stand for many years , the Dapol stand is in effect a factory discount outlet ... But Hornby have started selling TT:120 off the stand, and they are also offloading some items from the stand which are presumably heavily in surplus. And probably represent things the trade won't touch with a bargepole

 

At a recent large event attended by the Hornby stand they were flogging discounted mugs , so presumably there are far too many in the warehouse. The collectors club 2022 and 2023 wagons were also being cleared cheap - if you need a milk tanker for a project now's your chance. And a pile of the very toylike 0-4-0T in red livery were going for silly money for a silly loco - useful if you need a jack-rabbit 0-4-0 chassis...

 

But this problem seems to be across the brands - at the adjacent Airfix stand they were trying to shift a pile of Dambusters Anniversary watches. At least mugs are cheap , and they aren't tied to a date..  One well-known model railway boxshifter had two Hornby Railways jigsaws on offer: that bit of merch must be some years old,. But they also had two Airfix jigsaws and a Corgi jigsaw . This particular dud idea seems to have gone across the group

 

Also on the Airfix side of the business almost all the major kit traders seemed to have Airfix Titanic kits in at least 2 scales - the 1/400 box is pretty well... Titanic. As far as I can make out the 1/400 kit is not a recent release but seems to be 3-5 years old. It's not cheap, either. A demo stand allowing the children to have a go at building a plastic kit was well stocked with kits and Airfix 1/72 Focke Wulfe 190s and Messerschmitt Bf109s were very much in evidence. If you are going to donate stock for that kind of exercise, I presume you donate kits you simply can't shift

 

I've tended to assume that Airfix was the most successful brand in the Group but there may be an element of "the grass is always greener on the other side"  in that view.

 

The Oxford Diecast stand is a relatively recent innovation at model railway shows so far as I'm aware, and with bargain bundles, bins of defective returns priced to clear, and multibuy deals it does smack of a clearance operation as well as displaying new models

 

SK was something of an aging showman pulling eyecatching rabbits out of hats with each year's annual announcement . But it looks like many of the rabbits left a pile of droppings on the warehouse floor.

 

And "merch" and attempts to "leverage the brands" look like they have generally been commercial blunders

 

Not selling at York. Info and display only for many years now although can't remember how many other than for quite a few shows now.

[melmerby]

39 minutes ago, Ravenser said:

I remember the Hornby stand pre-pandemic as being a "pure" display stand not selling anything.

Incorrect again

They have sold odd items at various times.

I bought one of those 0-4-0s for a 5 pound note pre pandemic.

Not quite sure why but it was only £5😄

 

[JohnR]

I've not turned my nose up at the cheap 0-4-0s that Hornby flog off at the stands - often its only to collectors club members. I've found it a useful way to buy new locos for my two boys. It probably indicates that these are too expensive to begin with - at the moment Smokey Joe is £50, and I wont be paying that for the kids to race about on their layout. 

[Crisis Rail]

Difficult reading. 
 

Maybe the hobby is long overdue a reset of sorts. There is a lot of retail about now. A lot of choice which is all well and good but the market seems to be over saturated. The hobby has come on a lot in the last three decades with near watchmaking quality which can be very hard to produce and sustain.

 

Hattons really was a big wake up call. 

 

[Phil Parker]

9 hours ago, Ravenser said:

The Oxford Diecast stand is a relatively recent innovation at model railway shows so far as I'm aware,

 

Oxford has traded at Warley for many years. It was the only show they did.

[Roy L S]

9 hours ago, AY Mod said:

 

Incorrect; yet again.

 

That has now ceased, replaced by events at the GCR for the Collectors' Club. Other than that the only thing to 'buy' is to sign up to the Collectors' Club.

Collectors Club Members only event with "Not quite perfect" sale tends to move around, it was at the North Norfolk Railway last year and will be at The Battlefield Line this.

 

Edited April 30 by Roy L S

[Stefan88]

Hornby had a few shelves of random stock for sale at Warley 2022, I remember as I spent a lot of time thinking whether or not to buy a discounted Rivarossi Austrian class 1040 electric loco with sound (in the end not).

 

I'd imagine a good chunk of the stockpile will be European H0 - their RRPs are mad. The aforementioned Rivarossi Austrian class 1040 is about 30 years old and was part of the Lima assets, all that has been changed is a new PCB with LEDs instead of bulbs. It's still a usable model but some of the detailing isn't up to today's standards anymore. The RRP for a basic analogue model was near the price of some DCC Sound equipped models to a much higher standard of detail from competitors. Needless to say the only ones I've picked up were returns auctioned off on ebay by a UK trader, winning them for less than half the RRP.

[The Stationmaster]

2 hours ago, Crisis Rail said:

Difficult reading. 
 

Maybe the hobby is long overdue a reset of sorts. There is a lot of retail about now. A lot of choice which is all well and good but the market seems to be over saturated. The hobby has come on a lot in the last three decades with near watchmaking quality which can be very hard to produce and sustain.

 

Hattons really was a big wake up call. 

 

I think Hattons departure needs to be out in a properr context.  Firstly don't forget that it bowed out as a solvent business but one where its profits were shrinking.  Don't forget also that its past business model (high volume, rock bottom prices with very slim margins) has been shot to pieces and is never likely to return.   It had become a large retail concern competing price wise on a more even basis with other retail concerns but now on an industrial estate without a proper 'High Street' retail outlet as its public face.

 

The market had changed, the deep discount situation has gone (in my view something which is good for the hobby - as I've long said) .  So the old, high turnover, highly profitable, Hattons business model is no longer valid.  And, for whatever reasons, diversification doesn't seem to have worked as well for Hattons as it has for, say, Kernow

[ruggedpeak]

1 hour ago, Stefan88 said:

Hornby had a few shelves of random stock for sale at Warley 2022, I remember as I spent a lot of time thinking whether or not to buy a discounted Rivarossi Austrian class 1040 electric loco with sound (in the end not).

 

I'd imagine a good chunk of the stockpile will be European H0 - their RRPs are mad. The aforementioned Rivarossi Austrian class 1040 is about 30 years old and was part of the Lima assets, all that has been changed is a new PCB with LEDs instead of bulbs. It's still a usable model but some of the detailing isn't up to today's standards anymore. The RRP for a basic analogue model was near the price of some DCC Sound equipped models to a much higher standard of detail from competitors. Needless to say the only ones I've picked up were returns auctioned off on ebay by a UK trader, winning them for less than half the RRP.

I think that is a very good point with the generally British OO centric view, the warehouse may be full of non-British models and Pocher Lambo's! A single Pocher is nearly £800 retail.

Edited April 30 by ruggedpeak

[1andrew1]

1 hour ago, ruggedpeak said:

I think that is a very good point with the generally British OO centric view, the warehouse may be full of non-British models and Pocher Lambo's! A single Pocher is nearly £800 retail.

As an FYI, back in 2017, all the Pocher stock was sold to Hornby's Danish distributor, Vestergaard, which included about 1,600 Ducati kits. The impression given was that Vestergaard had acquired the brand but this turned out not to be the case.

 https://www.britmodeller.com/forums/index.php?/topic/235016639-pocher-now-dropped-by-Hornby/

 

 

[Legend]

1 hour ago, The Stationmaster said:

 

 

The market had changed, the deep discount situation has gone (in my view something which is good for the hobby - as I've long said) .  So the old, high turnover, highly profitable, Hattons business model is no longer valid.  And, for whatever reasons, diversification doesn't seem to have worked as well for Hattons as it has for, say, Kernow

I think Mike because they fell out with the manufacturer . They couldn’t stock Bachmann and at the same time Hornby had a shortage of capacity resulting in the ridiculous tier system . A company that needs to sell as much as possible , restricting sales ……duh !  So that clearly had an effect on the high volume low margin model of Hattons and while latterly it looked like they could take preorders again , I think the damage had been done . 
 

Going back to Hornby , I’ve just watched Richard Proudmans presentation of Bachmanns new 25 . I think I’m counting 11 versions (and three styles in each of these ) and you realise just how far Hornby are behind .  I think really Hornby lost it when they failed to upgrade their BR diesels in 2000s . Allowed Bachmann , Heljan to run away with it . They certainly seemed to have a blind spot on BR blue 

[spamcan61]

4 hours ago, Legend said:

 

Going back to Hornby , I’ve just watched Richard Proudmans presentation of Bachmanns new 25 . I think I’m counting 11 versions (and three styles in each of these ) and you realise just how far Hornby are behind .  I think really Hornby lost it when they failed to upgrade their BR diesels in 2000s . Allowed Bachmann , Heljan to run away with it . They certainly seemed to have a blind spot on BR blue 

Quite possibly, but it would be interesting to look at profit margin and return on investment. The ex Lima tooling Hornby still use - i.e. a good chunk of their D&E offering - must've surely paid for itself long ago, and those Limby products are surely significantly cheaper to assemble than the complicated modern stuff with 150 piece parts or more.

Compare that with Bachmann's stated million quid development cost of their 47 range - even if they sell  100,000 locos from that tooling - which is one heck of a lot in this day and age - that's 10 quid tooling cost to be amortized on each loco, and I suspect that's still a fair chunk of the overall factory cost - behind the labour costs.

Edited April 30 by spamcan61

[woodenhead]

Hornby with the Lima toolings had everything they needed for a cheap as chips (relatively) low cost model railway solution for those who were more financially constrained.  Railroad clearly had a place in Hornby's hierarchy of models though somewhere it does appear to have gotten a bit lost.

 

They had everything except Peaks in toolings plus three types of DMU without counting existing Hornby toolings.

 

But maybe despite the wailings of a vocal group it was and remains a small selling component of Hornby group, i.e. they sell but not in the way some people think they would.

[The Stationmaster]

2 hours ago, Legend said:

I think Mike because they fell out with the manufacturer . They couldn’t stock Bachmann and at the same time Hornby had a shortage of capacity resulting in the ridiculous tier system . A company that needs to sell as much as possible , restricting sales ……duh !  So that clearly had an effect on the high volume low margin model of Hattons and while latterly it looked like they could take preorders again , I think the damage had been done . 
 

Going back to Hornby , I’ve just watched Richard Proudmans presentation of Bachmanns new 25 . I think I’m counting 11 versions (and three styles in each of these ) and you realise just how far Hornby are behind .  I think really Hornby lost it when they failed to upgrade their BR diesels in 2000s . Allowed Bachmann , Heljan to run away with it . They certainly seemed to have a blind spot on BR blue 

Another interesting point about 'recent years' Hattons is that they were clearly buying Hornby items out of the unsold stock mountain and no doubt at a substantial discount of.  But Kernow were buying some of the same items and contrary to the past known to many Kernw were selling the same things a few £s cheaper than Hattons.

 

Obviously the 'headline' retail prce might not be everything - unless you happen to buy in a shop instead of by mail/'net order - but the lead in price on most stuff saw Kernow doing the slightly better offer.

 

Back to Hornby ... where Railroad remains something of an enigma which needs to be either dumped (wrong move I think) or be given a consistent brand and price point identity.  Hopefully the new marketing people will get round to sorting that one as properly marketed it could be just what the company needs for part of its model railway business in the current economic climate.

[Harlequin]

On 30/04/2024 at 16:12, The Stationmaster said:

Another interesting point about 'recent years' Hattons is that they were clearly buying Hornby items out of the unsold stock mountain and no doubt at a substantial discount of.  But Kernow were buying some of the same items and contrary to the past known to many Kernw were selling the same things a few £s cheaper than Hattons.

 

Obviously the 'headline' retail prce might not be everything - unless you happen to buy in a shop instead of by mail/'net order - but the lead in price on most stuff saw Kernow doing the slightly better offer.

 

Back to Hornby ... where Railroad remains something of an enigma which needs to be either dumped (wrong move I think) or be given a consistent brand and price point identity.  Hopefully the new marketing people will get round to sorting that one as properly marketed it could be just what the company needs for part of its model railway business in the current economic climate.

 

The thing about "Railroad" is that it represents the core of what Hornby are/should be selling: basic affordable models for beginners. Hornby is Railroad and so it's very confusing for everyone to find Railroad is a separate brand within the Hornby offering.

 

Maybe they should get rid of that sub-brand and add a new premium brand to sell their "premium" products (although their track record has not been good on that front recently). That would clarify the price points, clarify the toy vs. serious model identity crisis, allow the marketing to be targeted more accurately and make it clearer which products are really meant to stand up against those of the newcomers.

 

Edited May 2 by Harlequin

[Geep7]

15 minutes ago, The Stationmaster said:

Back to Hornby ... where Railroad remains something of an enigma which needs to be either dumped (wrong move I think) or be given a consistent brand and price point identity.  Hopefully the new marketing people will get round to sorting that one as properly marketed it could be just what the company needs for part of its model railway business in the current economic climate.

I don't think it helps things (more muddy's the water) when a better fidelity model is put on sale for around about the same price or slightly more expensive than the Railroad model. (i.e The Dapol 73 vs the Railroad 73)......

[woodenhead]

16 minutes ago, The Stationmaster said:

Another interesting point about 'recent years' Hattons is that they were clearly buying Hornby items out of the unsold stock mountain and no doubt at a substantial discount of.  But Kernow were buying some of the same items and contrary to the past known to many Kernw were selling the same things a few £s cheaper than Hattons.

 

Obviously the 'headline' retail prce might not be everything - unless you happen to buy in a shop instead of by mail/'net order - but the lead in price on most stuff saw Kernow doing the slightly better offer.

 

Back to Hornby ... where Railroad remains something of an enigma which needs to be either dumped (wrong move I think) or be given a consistent brand and price point identity.  Hopefully the new marketing people will get round to sorting that one as properly marketed it could be just what the company needs for part of its model railway business in the current economic climate.

Hattons issue over Kernow was probably the size of warehousing it had to support.  Hattons moved to the new site with plans to expand into building it's own range of models plus reading between the lines with comments from other shops it was potentially wholesaling some manufacturers as well.  Once it lost Bachmann and then Hornby reduced it to lower tier status then the wheels came off and it was stuck with massive capacity.  I am guessing that's where the trunk came in, using the space in the warehouse by not having as much stock to sell.

 

Kernow on the other side were growing into their warehousing organically and not rocking the boat, in fact it enhanced it's relationship with Bachmann through EFE rather than going up against it.  So with less to maintain and more to sell it's better positioned to obtain and sell the sell off models under what would have been Hattons' prices.

[woodenhead]

5 minutes ago, Harlequin said:

 

The thing about "Railroad" is that it represents the core of what Hornby are/should be selling: basic affordable models for beginners. Hornby is Railroad and so it's very confusing for everyone to find Railroad as a separate brand within the Hornby offering.

 

So maybe they should get rid of that sub-brand and add a new premium brand to sell their "premium" products (although their track record has not been good on that front recently). That would clarify the price points, clarify the toy vs. serious model identity crisis and make it clear which products are really meant to stand up against those of the newcomers.

 

I don't think Hornby knows where it is in the market, it was clearly in that toy market and adding the Lima range would have enhanced that status.  I guess when other manufacturers came along and looked to challenge on the sorts of locos Hornby might sell and it's new management wanted to enhance it's offering it got into more detailed models which results in a new A3 or A4 in regular cycles plus other staples in it's range.  Then they had design clever which was muddled yet delivered some fine looking SR EMUs and it's been confused ever since, even Railroad is not one range and there are 'prestige' levels attached it that range too. 

 

They need a comprehensive look at the ranges, what represents one and some clear marketing, hopefully TT120 stays at one quality level and they don't try and diversify that.