Hornby get financial lifeline

[PanzerJohn]

https://www.telegraph.co.uk/business/20 ... -lifeline/

[Mountain]

Thanks for sharing. It does look a bit like prices may rise again in the future to pay back any extra money being loaned to the company?
It isn't ideal, but fair play to still be trading as many companies would not have the guts to continue.
Is it me or am I the only one who when I read the last time Hornby made a profit was in 2012, that it was a coincidence that this was about the last time modellers saw reasonable prices in the shops? I saw the same thing happen with Bachmann products but other manufacturers seemed to go up more gradually.
Is there a direct relationship between the profits and the retail prices? I say this as logically, if one rises prices then one gets more profit, but there comes a point where the customers start dropping off as the costs are too high for them to buy the products, so where is the best happy medium? I believe that today models have gone beyond the happy medium as when I have visited model railway fairs I keep hearing people say they dont buy new anymore and come to the fairs to buy secondhand.

[GWR_fan]

Quote: "Today’s refinancing lays the foundations for what is understood to be a flurry of future announcements." To me this means asset shedding to get rid of legacy items that were acquired a few years ago, like some European brandnames.

Quote: "In an April trading update Hornby said a decision to halt discounting had hit sales. The company also signposted the need for a larger facility in order to support its future strategy." Well of course banning discounting is going to impact both on retailer orders and customer sales. Secondly, did not the company move to better premises only a few years ago? A very short sighted move considering the cost to do so. Does "future strategy" imply Hornby and Oxford Diecast Models sharing the same office facilities?

Really, is GBP 18 million going to pull the company back to profitability (GBP 6 million is only to cover a previous debt with Barclays, so in reality there is only GBP 12 million new money for investment)?

There is talk of a possible tier system separating full detail models from legacy items, however, to be successful there has to be a distinct line drawn between the tier levels. The premium line needs to be suitably identified and seen as such. No point marketing different levels of detail when there is no marked distinction in naming, quality and pricing. For many released items in the past the distinction between Railroad and Premium was merely a refined livery and supposed etched nameplates. No matter what dress you put on a pig it is still a pig. A premium line model has to be premium and not a tarted up Railroad level of detail.

Also, no point distinguishing between Railroad and Premium when there is just a few pounds difference in pricing. The Railroad pricing needs to be markedly less to make the Premium line more attractive. Recent releases had items marked as Railroad and yet the prices were almost Premium level.

[Puffingbill]

I for one could not care less what happens to Hornby to my way of thinking most OO gauge manufacturers have prced themselves out of the market and its only going to get worse, that I believe is why so many mdellers are turning to American layouts where locos are cheaper and far better quality.

Our local hobby shop has dumped Hornby products and introduced Frateschi Model Railways, cheep and cheerful stuff that is made in Brazil, they had the forsight to cater for Aussie and Kiwi modellers plus the freelance modellers that build layouts on a small budget

http://www.alcoworld.com.au/shop/shopdi ... D+RAILWAYS

As a feelance modeller that runs what he likes on his layout this is the direction I will be heading like so many other modellers I am sick of bloated prices and hearing about the woes of Hornby, in my humble opinion if they cant get it right this time they should pull the plug and forget about all the emotion because its British, crikey they are using American money so its hardly British anymore.

[Bigmet]

Presumably Lyndon Davies has written a plan that convinced PNC that he knows what he is doing. Now we wait and see. The exit from the TTTE franchise production probably an early taste of what is to come. It won't be Hornby - and the other lines they have - as we knew it in some respects. For the Hornby railway product I don't see they have much option but to move in the direction of the new entrant competitors, who focus on locos and rolling stock only, could be the end of the 'whole system'.

... Is there a direct relationship between the profits and the retail prices? I say this as logically, if one rises prices then one gets more profit, but there comes a point where the customers start dropping off as the costs are too high for them to buy the products, so where is the best happy medium? ...

The ideal price point for a business is the one that yields maximum return on the investment. It can be better to have fewer customers, who are prepared to buy at a higher price. Less stuff to physically get made, ship and distribute, less after sales provision required.

[Admin4]

Thanks for sharing, i had to chuckle when i read:

In an April trading update Hornby said a decision to halt discounting had hit sales

I know looking back at my purchases from Hornby that it only tended to be when they had a sale on, otherwise its normally cheaper elsewhere or you have the advantage of being able to order other bits at the same time (peco track etc)

[Bufferstop]

That Hornby had "lost it" when it came to the railway modelling hobby is fairly obvious from the number of items being advertised by retailers as "split from sets". It remains to be seen whether this board can make a better fist of it than the previous iterations could.

[Mountain]

GWR Fan. I've been thinking that. I recently saw a deltic from the old Lima moulding and it retailed at a huge price. Hattons price is £81 so I'm guessing the RRP price is even higher. (It was a standard DC model!) And will it pull the 8-10 coaches that the Lima model can? No idea but I doubt it as those Lima mechanisms were strong pullers if they had good tyres on them.

[Bigmet]

GWR Fan. I've been thinking that. I recently saw a deltic from the old Lima moulding and it retailed at a huge price. Hattons price is £81 so I'm guessing the RRP price is even higher. (It was a standard DC model!) And will it pull the 8-10 coaches that the Lima model can? No idea but I doubt it as those Lima mechanisms were strong pullers if they had good tyres on them.

Well you can find out for only £56 this week (Hattons) and it is not billed as a discounted item either. http://www.hattons.co.uk/250954/Hornby_ ... etail.aspx
There may be other retailers charging less than that!

Going back to 2000, Hattons wanted £52 for the then current Lima Deltic release.

Side note: the magnificent Lima class 42 was listed at £42, Hattons will do you one ATM for £39. The hobby has never been more economical...

[Mountain]

I noticed the Warship. It is the wrong livery for my 00 gauge collection. Also the wrong era, though I do have a beautiful Bachmann Warship in blue from when they first came out and I couldn't resist buying it!

[GWR_fan]

The Hattons Hornby Warship has been GBP39.00 for a long time and has the skew wound motor in the drive bogie as it is an updated drive. I like the Lima Warship but never purchased one. Was criticised for insufficient detail as is the Hornby model but at half the price of a Bachmann model most likely worth the money (and no mazak problems).

A decent ringfield can be a strong puller. I added a little weight to a Hornby class 90 and it easily hauled seventeen coaches around an r4 curve oval test track.

[GWR_fan]

GWR Fan. I've been thinking that. I recently saw a deltic from the old Lima moulding and it retailed at a huge price.......

I believe I also saw that and was stunned, unless like every other Lima release it was a "limited edition".

[Mountain]

Even limited editions are not justifying the higher retail prices now standard productions are produced in such low volumes.
If a toy manufacturer changed to 00 scale and run their trains with 12 volt motors with track pick up they would take the 00 gauge market by storm, and their trains wouldn't even need to be detailed accurate models to do this as many modellers would buy a few to convert them to something else. All they would need to do is make cheap trainsets with steel track, a simple three speed controller, a freelance loco and a few wagons or coaches and they are onto a winner!
Can you imagine how quickly the shares would go up of any toy manufacturer who makes a move to do this!

[b308]

I doubt it, there's lots of cheapo Chinese manufactured plastic sets knocking around that would appeal to that sort of buyer already and they are a damn sight cheaper than what you describe could be sold for... Pay peanuts, get rubbish (as a variation of the old saying!)...

[Puffingbill]

When its all said and done people buy what they can afford but that does not mean that they are any less an enthusiastic modeller, I myself buy Railroad models and consider myself to be a model railway fanatic, lets face it it is only in recent years that Hornby have lifted their game in the mechanisms they used to run their engines, traction tyres, spring suspension, motors with a very limited life they made some real dogs, they have always played catch up to other brands crikey how long did it take before they started fitting flywheels to their motors, I dont think the amount of money spent on model train engines has any bearing on how reliable the are.