Saturday, 29 October 2016

Christmas is coming, and Hornby's last boat before the holidays will soon be in, full of goodies.

Some time ago I toyed with the idea of buying some shares in this famous, British brand. I knew their history, what they did, and they were doing well at the time (see share price 5 years). I am glad I did not. The Hornby management went on a European wide, 'rivals' buying spree and bought into some very poor marketing tie-ins: The Olympics for one. They bought the enlarged group to its knees.

But my original concern before this, was their wholesale shift in production from Margate to China and the long term issues with that. They provided fantastic models and kept price inflation low over a decade. The central problem was the planning, communication and supply issues. They could never hit their deadlines and customers and retailers assumed all delivery date promises were fictions. Their customers also could not grasp how expensive it was to develop and tool up every new product they promised to bring to market (£100,000+). On the hobby sites some cool heads, who knew the tooling up problems, tried to calm the frustrations. In this context then, this anecdotal caught my eye on a blog: *Kader is a giant toy manufacturer

As people from factories in China talk to each other, it need hardly come as a surprise that A knows a little about what B is doing, it need also not comes as a surprise that C lets drop a hint that he is doing it just to test the water. Hornby now buy stuff through a multiplicity of factories, at least one of which has some ex-Kader folk working for it; some factories are known to be making models for several (widely different) concerns which happen to have 'a presence' of some sort or other in the British market so it is hardly surprising that word might get around.

If Hornby happened to have a concern that - not for the first time - a competitor is working on something which they are also working on it strikes me as good business sense to 'let slip' hints about what they are doing and where they have got to with their version. Hornby have had a vast amount of panning on here in the past (some of it from me) about not responding to what many of us consider they should be doing or what 'the market' wants (or what we think it wants).

Hope it works, but that seems a funny old version of the free market if true.


Mark Wadsworth said...

Seems fair enough to me, outsource your production and take your chances. What you save in costs you lose in control.

Lola said...

Got a mate who has been having kids wear made in the China since the 80's. He does it right and it works well. And yes other people do try to nick his designs. The trick is to build proper relationships with the factories. My guess is that Hornby didn't put that work in.