Hornby Annual Report 2023/4

[Mark Saunders]

15 hours ago, GrumpyPenguin said:

There is a huge difference between the profit margins on model railway items & gift shop "tat".

Likewise on the trade price that the smaller shops can buy models for against the big box shifters!

[AY Mod]

6 minutes ago, Mark Saunders said:

Likewise on the trade price that the smaller shops can buy models for against the big box shifters!

 

Only when it comes to clearance events really. For new products it's normally a level playing field. Early settlement discounts may be the thing that influences margins at that time more than anything, and that's not a massive sum.

[GrumpyPenguin]

33 minutes ago, AY Mod said:

 

Only when it comes to clearance events really. For new products it's normally a level playing field. Early settlement discounts may be the thing that influences margins at that time more than anything, and that's not a massive sum.

Absolutely, the model railway business is not subject to the "ethics" of supermarkets & other high volume goods.

[Phil Parker]

On 17/07/2024 at 22:53, JSpencer said:

IF preserved railway souvenir shops are starting to not sell model railways (hopefully a big IF), then I'm not sure what place could bring in new blood. But surely these make good targets for a TT starter set?

 

On 18/07/2024 at 10:52, The Stationmaster said:

Probably a reasonable idea for Hornby's Marketing and Sales folk to look at.  But the demographic of visitors to preserved/leisure lines and sites varies tremendously plus 'tied-in' models are probably more likely to sell rather than 'just anything'.  

 

And don't forget that at all the railways etc the sales side is a business that is there to create revenue for the railway and not necessarily hold slower moving, more expensive, items.  Having said that some railways do have quite extensive model railway stocks so presumably find them to be profitable.  But one line I know of makes most of its money selling refreshments (they need space too) and low priced items as souvenirs or things aimed at children.

 

Andy and I spent half a day years ago with Tim Mulhall at the SVR looking over the range of Hornby Group products being stocked. At the time, they seemed to have a pretty good idea what would sell and what wouldn't in that location.

[MikeParkin65]

14 minutes ago, Phil Parker said:

 

 

Andy and I spent half a day years ago with Tim Mulhall at the SVR looking over the range of Hornby Group products being stocked. At the time, they seemed to have a pretty good idea what would sell and what wouldn't in that location.

And the SVR sell predominately Bachmann now.............

[AY Mod]

10 minutes ago, MikeParkin65 said:

And the SVR sell predominately Bachmann now.............

 

Maybe at Kidderminster and Bridgnorth but the shop at the Engine House has a distinctly different range of items, appealing a little more to the family rather than enthusiast market.

[gwrrob]

The shop at Paignton on the Dartmouth line has a few books aimed at the enthusiast but the majority of stuff is tourists tat and certainly no model railway items.

[The Stationmaster]

Some time since I visited but their website confirms that the SDR's shop at Buckfastleigh stocks a wide range of model railway items listing nine different brands -  r-t-r  with 5 brands including Hornby (and possibly a 6th depending on what Peco items they stock).  Presumably they effectively also operate as a local model railway shop so a bit different from many others in the heritage/leisure sector.

[rembrow]

There is a thriving model railway shop on the Bure Valley Railway, the narrow gauge line on what was a standard gauge branch. At their terminus in Aylsham, Norfolk,  there is Bure Valley Models, which has a large retail space selling the main ranges,inc Hornby. They also retail on-line and their prices are very competitive. 

[adb968008]

Whilst slightly wandering OT, I have wondered the merits of creating a series of preserved railway trainsets …

 

Basically a box artwork that relates to a preserved line, inside the box being a preserved loco / 2/3 coaches relevant to that line and a prominent structure model as found on the line that passengers would recognise…

 

for example

Swanage could be a preserved Bullied, few coaches and the single lane engine shed,

East Lancs a Black5, few mk1’s and an LMS style signal box etc,

SVR a Hall, GWR coaches and GWR footbridge as at Highley etc..

MHR an s15, green mk1’s and the Alresford cattle dock

 

Combined together different sets from different lines build up a layout theme of preserved stock and structures.

This could recycle /make relevent some of their older scenics into a modern context, and appeal to the “ive seen that today” tourist. They certainly arent not short of toolings to facilitate this and gives a tie in to several preserved lines across the country.

 

 

 

Edited July 20 by adb968008

[Trevor Hammond]

Please remember that Hornby,as as a company, are about much more than model railways

[jjb1970]

12 hours ago, Trevor Hammond said:

Please remember that Hornby,as as a company, are about much more than model railways

 

Indeed so. Hornby gets a lot of flak (some deserved, some unfair IMO) but Airfix have made some fantastic kits while under Hornby ownership.

[GMKAT7]

Good morning folks,

 

Another 20% discount advertised on the Airfix website for this weekend on all in-stock items.

 

Interestingly, the Airfix website advises that this is for club members only, and the Hornby website advises that it only applies for TT:120 and Collector Club members.

 

Still indicates a drive for cash, as ever.

Couldn't post this on the price rise (possibly) thread as that is locked.

 

Cheers, Nigel.

[The Stationmaster]

48 minutes ago, GMKAT7 said:

Good morning folks,

 

Another 20% discount advertised on the Airfix website for this weekend on all in-stock items.

 

Interestingly, the Airfix website advises that this is for club members only, and the Hornby website advises that it only applies for TT:120 and Collector Club members.

 

Still indicates a drive for cash, as ever.

Couldn't post this on the price rise (possibly) thread as that is locked.

 

Cheers, Nigel.

On the model railways section of their site it says -

'SAVE 20% on all in-stock items for TT:120 and Collector Club members this weekend ONLY!'

 

Assuming their English is correct (yes, I know) that means that this weekend anyone can get 20% off in-stock TT120 items.  And that Collector Club Members can get 20% off any Collector Club items which are in stock.  

 

Of course that might not be what they meant to say but it is what they have written.

[BroadLeaves]

5 hours ago, GMKAT7 said:

Another 20% discount ... Still indicates a drive for cash, as ever.

Or maybe not. If it does, Rails Of Sheffield are in trouble. They're offering a 38% discount...



And War World Gaming (part of WWScenics) must be in real dire straits They're doing 45% site wide.



Finally, not in the model railway sphere, some small grocery operation is also in a drive for cash. As Tesco only made £2.3 billion profit last year, the 33% they're currently offering on some cheese must be because they have no money left.





Edit: To be clear, this is simply a rebuttal to @GMKAT7 's comments regarding Hornby's promotions. I did not intend to cast any aspersions about the companies mentioned above and have no reason to think that any of them are experiencing any commercial difficulties.

 

Edited July 26 by BroadLeaves
Clarification of reason for post.

[woodenhead]

4 hours ago, GMKAT7 said:

Still indicates a drive for cash, as ever.

Couldn't post this on the price rise (possibly) thread as that is locked.

 

Cheers, Nigel.

A company with creditors like Hornby has will have cash covenants to adhere to, i.e. how much they have in the bank to pay their loan payments when due.

 

Equally for any company cash is what generates revenue not likes or promises.

 

This is aimed purely at their club members to drive some extra spend, a bit like when Sainsburys or Tesco make offers that only apply to their loyalty card members.

[AY Mod]

28 minutes ago, BroadLeaves said:

Or maybe not. If it does, Rails Of Sheffield are in trouble. They're offering a 38% discount...



And War World Gaming (part of WWScenics) must be in real dire straits They're doing 45% site wide.



Finally, not in the model railway sphere, some small grocery operation is also in a drive for cash. As Tesco only made £2.3 billion profit last year, the 33% they're currently offering on some cheese must be because they have no money left.




 

 

I know you are quoting irrelevancies to illustrate a point but some may think you are being serious.

[GMKAT7]

Good afternoon BroadLeaves,

 

Why not quote TMC, their sale is offering 50% discounts?

 

Cheers, Nigel.

[BroadLeaves]

37 minutes ago, AY Mod said:

 

I know you are quoting irrelevancies to illustrate a point but some may think you are being serious.

Fair point. Post edited.

[MidlandRed]

Why are people noticing and quoting reductions just in Hornby items - I receive regularly email flyers from major retailers for vast reductions on Bachmann models (and I’m sure if I delved into their websites could find many other manufacturer’s items reduced as well).

 

I do wonder whether Hornby has missed a trick with its direct sales. It seems some of the newer entrants to the market are very keen to encourage (some still do and others used to insist on) purchasers for direct sales paying very much in advance of receiving goods. Whilst this can assist people in not running into the financial woe of having to pay for several expensive models in one go, on delivery (even though such delivery may be months if not years away), several things have occurred to me. Whilst not universally the case, many railway modellers are of advancing years and many do not appear to be particularly struggling financially. From posts I see on this very forum, it seems many modellers are more than happy to pay in advance, indeed people refer to being able to spread those advance payments over a period if desired (but still end up paying in full in advance). Whilst this is all very friendly and laudable, one does wonder whether this ‘mountain’ of advance cash and earning interest, is part of a deliberate business model. People might say ‘Mountain’ of cash? That’s a gross exaggeration!! Well not if one considers a recent quotation of having sold 30,000 or so of a recent model, even if only a percentage of those was by direct sales (I would guess quite a reasonable percentage)! And this has the ability to be a ‘mountain’ as some new entrants are producing and announcing a large number of different models. 
 

Poor old Hornby uses the old method of paying on despatch of goods, but we often hear of its expensive loan facilities in this thread, as well. Perhaps they’re worried about upsetting too many customers by encouraging advanced payments? I know there are one or two on this forum (including me) who prefer not to pay in advance. I wonder if we’re the minority……. Hmmm?? 

Edited July 27 by MidlandRed

[spamcan61]

18 minutes ago, MidlandRed said:

 

Poor old Hornby uses the old method of paying on despatch of goods, but we often hear of its expensive loan facilities in this thread, as well. Perhaps they’re worried about upsetting too many customers by encouraging advanced payments? I know there are one or two on this forum (including me) who prefer not to pay in advance. I wonder if we’re the minority……. Hmmm?? 

Absolutely, one of the downsides of a push to direct sales the Hornby way is the "manufacturer" having to finance the production run until it's sold. As you point out, that's using borrowed money as well, so doubly inefficient.

[The Stationmaster]

7 minutes ago, MidlandRed said:

Why are people noticing and quoting reductions just in Hornby items - I receive regularly email flyers from major retailers for vast reductions on Bachmann models (and I’m sure if I delved into their websites could find many other manufacturer’s items reduced as well).

 

I do wonder whether Hornby has missed a trick with its direct sales. It seems some of the newer entrants to the market are very keen to encourage (some still do and others used to insist on) purchasers for direct sales paying very much in advance of receiving goods. Whilst this can assist people in not running into the financial woe of having to pay for several expensive models in one go, on delivery (even though such delivery may be months if not years away), several things have occurred to me. Whilst not universally the case, many railway modellers are of advancing years and many do not appear to be particularly struggling financially. From posts I see on this very forum, it seems many modellers are more than happy to pay in advance, indeed people refer to being able to spread those advance payments over a period if desired (but still end up paying in full in advance). Whilst this is all very friendly and laudable, one does wonder whether this ‘mountain’ of advance cash and earning interest, is part of a deliberate business model. People might say ‘Mountain’ of cash? That’s a gross exaggeration!! Well not if one considers a recent quotation of having sold 30,000 or so of a recent model, even if only a percentage of those was by direct sales (I would guess quite a reasonable percentage)! And this has the ability to be a ‘mountain’ as some new entrants are producing and announcing a large number of different models. 
 

Poor old Hornby uses the old method of paying on despatch of goods, but we often hear of its expensive loan facilities in this thread, as well. Perhaps they’re worried about upsetting too many customers by encouraging advanced payments? I know there are one or two on this forum (including me) who prefer not to pay in advance. I wonder if we’re the minority……. Hmmm?? 

Spot on.  I too am against paying in advance as I like to see what I am getting for my money although in one or two cases manufacturer's promises are usually very reliable.  But I do have the luxury of having two 'local' (in their own way) model shops through which I do most of my model railway hobby buying.

 

But like you I wonder if Hornby are missing a trick with pre-order payments when many around, including at least one retailer to my knowledge, seek advanced payment or at least a deposit payment.  I think part of Hornby's problem is that their knowledge of how model railway remote selling can work has been somewhat limited and that certainly shows in various facets of their operation such as not linking orders into a single despatch package (have they put that right yet?).   Also they seem to have unduly increased their staffing costs in order to handle direct selling which again suggests to me a lack of experience.

 

Various of the larger retailers have long experience in remote selling and have got the admin etc fully sorted - if for no other reason than keeping their costs under control as well as offering good standards of customer service.  Hornby - I think - could take a lesson from them as well as from other 'manufacturers'.

[JohnR]

They could easily switch by saying "pay in advance and you guarantee the price, but if you want to pay on delivery, it maybe higher if there are price increases". 

 

I'm sure many people would take them up on that offer. 

[woodenhead]

1 hour ago, JohnR said:

They could easily switch by saying "pay in advance and you guarantee the price, but if you want to pay on delivery, it maybe higher if there are price increases". 

 

I'm sure many people would take them up on that offer. 

As this would be distance selling I imagine the right to cancel or return the item remains, so the only risk here is the company going bump but given the general prices of locomotives you're going to have Section 75 cover.  The real problem is the amount of time you've spent your cash but you are without the item, i.e. any interest earned is by Hornby. 

 

I could also see this as a tactic used to generate cash quickly, buy it now at £x becuase it will rise to £y once the items are in the warehouse - a tactic used by a well known retailer and at least one manufacturer already.  It reduces risk as it encourages pre-ordering and helps to fund the item being made, I imagine it also makes those funding the build happy too, nothing wrong in it for a  well established organisation.

[spamcan61]

Somewhat relevant to this discussion, I notice over on FB that folks are cancelling their Hornby pre-orders then re-making them with today's 10% off. Saving an extra 25 quid ish on a TT:120 set for example. Not sure Hornby thought thru that promotion.