UK MODEL MAKER HORNBY is set to raise money to secure its future. The train set manufacturer, also the name behind brands such as Airfix, Corgi and Scalextric, revealed big losses this week.
SMN report: However, there is a turnaround plan, which involves reducing Hornby’s size, streamlining operations, and focussing on brands that are making money. Whether a planned new visitor centre in Ramsgate, Kent, will go ahead is unclear at this point.
The Hornby name goes back to 1901. Its model trains (pictures below) have been manufactured since 1920. Early locomotives were powered by winding up a clockwork motor, but were soon followed by electric versions.
Hornby revenues have fallen some 4 percent in the last year, meaning that the company is currently trading at a loss. Executive chairman Roger Canham will put a rescue plan to shareholders next month, though he says, “…if they are not approved there are serious concerns over the group’s ability to continue as a going concern.”
We hope that in particular Hornby-owned Rivarossi and Jouef will continue, though perhaps Arnold and Electrotren may visit the hibernation chamber. We’ll doubtless find out more details as the rescue plan unfolds.
While maintaining its key brands, Hornby also plans to reduce product lines by some 40 percent in 2016, with more to go in 2017.
A further part of the rescue plan is to reduce stock levels, and from now on Hornby will be managing these very carefully. It’s no good having warehouses piled with unsold stock.
As Roger Canham puts it, “…The turnaround plan is intended to return the business to sustainable profitability and cash generation.”
A typical modern Hornby rail set (below) comes in a big box, which includes everything a beginner needs to get a new train set - often a Christmas or birthday present - up and running inside an hour. The layout mat is a useful innovation that allows basic realism in double-quick time.
Neatly presented layout mat (below) allows a new rail fan to get going with a minimum of fuss. Add some trackside buildings and accessories and the result looks great.
The visual (below, courtesy Kent Messenger) shows the proposed new Hornby centre in the seaside town of Ramsgate. We think the centre would become a money-spinner if and when those big doors open to the public.
Good luck to Hornby from SMN, and let’s see those new Airfix kits hitting the streets as soon as possible.