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DT
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LONDON (AP) - Hornby PLC, a British-based manufacturer of model train and cars, said Friday that it has acquired Heico Modell, a privately owned distributor of model railway equipment in Germany.

In a statement to the Stock Exchange in London, Hornby said it paid a "nominal sum" for the business while also taking on liabilities of about euro200,000 ($250,000).

Heico, established in 1996, has more than 1,200 active customer accounts with independent retailers in Germany.

Frank Martin, Chief Executive of Hornby commented:

"The acquisition of Heico is a really important step in the development of our strategy to expand in Germany. The model railway market in Germany is the biggest in Europe and is estimated to be six times larger than the UK market. We believe that the market offers huge potential for growth as we launch new product into the market."

"We are pleased that the existing management team of Heico are staying with us. In turn they are excited by the prospect of working with our portfolio of brands, which we are working hard to re-invigorate since the acquisition of the Lima operations. In particular our brands Arnold and Rivarossi are well known in the German market."

"Our strategy to establish a global model railway and slot racing business is well advanced and this is a vital move that will enable us to grow in Germany. We are confident that we will be able to take advantage of the existing distribution network and increase significantly the volumes of product that we sell in Germany."

Its German acquisition will be renamed Hornby Deutschland GmbH and will also act as distributor for Hornby Group's Lima, Arnold and Rivarossi product lines. Heico's management team will remain in place, Hornby said.
 

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The German model railway market is 6 times the size of the UK and Hornby want a significant slice of the pie. They are now able to offer brands through their own wholly owned distributer that are well known to the Germans which up until now they have not been able to.

If the German market is 6 times the size of the UK then it could be bigger than the market in the USA!

I never realised that the Germans were model railway fanatics to such an extent!

If in time Hornby take a 15% share of the German market (not inconceivable) then that will be the equivalent to their entire sales in the UK!


Happy modelling
Gary
 

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DT
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Discussion Starter · #5 ·
I think that for now it is about distribution. Last year Hornby bought our MKD a small French Model maker and distributor and with it created Hornby France. Hornby want to control distribution from factory to hobby shop and also wish to have a foot-hold in various European countries with important markets.
 

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In order to acheive 16% of the German market they will have to get into competition with Fleischmann, Roco and Maerklin. As yet they do not have a product in this niche. Lima and Rivarossi are budget and poor quality. This could obviously change though. As Hornby are starting to succesfully improve the quality of their British range they could do like wise with Lima and Rivarossi. Maybe they good get some tips from Brawa who distribute the Hornby live steam in Germany. Distribution is a good area to control especially in market where you intend to expand.
 

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"As yet they do not have a product in this niche. Lima and Rivarossi are budget and poor quality."
Neil i think you hit the nail on the head then but perhaps not in the way you wanted. for a start the later Riv models were as good as anyones. and were not poor quality. to call their last few models in this range budget (£300!! thats some budget) is wrong and mine run flawlessly. i even have a few very old poucher models that became Riv and they still run as good as new.

The Lima brand. yes it is budget and many of thir model were poor quality (especailly the UK range but lets not go there) but most of the problems were due to the chassis. something that hornby is adressing. also you completly ignore the very fact that the budget lima range IS there nichie. they dont need to compete with Roco and Fleishmann because they are not in the same market. how many people are there out there that would love some comtinental stock but simply cant afford it. if they bring out a model that is almost as good but half the price then Roco and Fleishmann are going to be priced out of the market.

Hornby's main strength in this country is their relationship with the retialers. (people often thing that the name is the most important thing, but its interesting to note that this is only valued at 5M in hornby's own accounts.) its a hornby man that visits retailers not a distributor man. thats what hornby are trying to do on the continent. (its a pity that they arnt doing that in the US but perhaps they are saving that for later-i want to know how long the distribution deal with walthers is for?? time for a leak someone??)

As i keep saying- give them 5 years....

Peter
 

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QUOTE As i keep saying- give them 5 years....
But you've been saying that for the last few months, surly it's less than 5 years now.


Rivarossi is better quality now than LIMA but the issue with these brands and with Bachmann is that you need to look at the particular model. Some are good but others are crap and you don't always know which you are getting. At least Bachmann with their Spectrum line are trying to differentiate. Does Rivarossi do something similar?
 

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QUOTE (Dennis David @ 5 Sep 2006, 04:34) <{POST_SNAPBACK}>But you've been saying that for the last few months, surly it's less than 5 years now.


Rivarossi is better quality now than LIMA but the issue with these brands and with Bachmann is that you need to look at the particular model. Some are good but others are crap and you don't always know which you are getting. At least Bachmann with their Spectrum line are trying to differentiate. Does Rivarossi do something similar?
To be honest that could also be said of Hornby. They have really lifted there game and produce some fabulously detailed models and they are now belatedly introducing DCC but they still produce some terrible shit. You don't really know what you are going to get sometimes. Some diesels and the hst are diabolical. They are gradually weeding these out but it will take a while.

I didn't know Rivarossi had produced some decent pricey models. I still saw them as similar to Lima. I'll take your word for it.
 

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Neil, Rivarossi had improved their game especially when the C&O Allegheny came out. Lots of seperately applied bits, terrific moldings and what was an excellent drive system . The Big Boy suffered a bit as it only get the new drive but was the same old tired molding with it's cast on detail. Unfortuneatly Rivarossi failed to match the quality work of the Allegheny in it's other models.This coupled with the change in US importers , from Model Expo to Walthers and a huge cash shortfall from Model Expo sent it down the slope. It's a pity as its European models were a step up in quality from the US ones as were the Lima ones though they still produced some not so good models but they weren't competing in the upper range market of Fleischmann, Marklin, Roco Platinium. This is the sort of middle range market Hornby seem to want to compete in and with the accquistion of this German distribution network it should allow Hornby to sell it's products it's traditional way with the Hornby man actually calling at your shop. Wish to hell they'd do that here.

Ozzie21

QUOTE (neil_s_wood @ 5 Sep 2006, 09:09) <{POST_SNAPBACK}>"I didn't know Rivarossi had produced some decent pricey models. I still saw them as similar to Lima. I'll take your word for it."
 

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I'd love to but I doubt that they'd pay me what I get now but it'd would be fun to get away from shift work after nearly 30yrs.

Ozzie21

QUOTE (Dennis David @ 5 Sep 2006, 13:34) <{POST_SNAPBACK}>Tell them you'll be their rep.
 

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I know what you mean. 4.30 am starts are a killer. thank god for RMweb!

If you look at the hornby intl catalouge its only the very detailed models that they are reintroducing at the moment. The big boy is actually a very good model. and i thought it was a retooled version. mine (one of the last of the italian line) looks far more detailed than my freinds. i know mine has had a little work done on it but not that much.

Peter
 

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QUOTE In order to achieve 16% of the German market they will have to get into competition with Fleischmann, Roco and Maerklin. As yet they do not have a product in this niche. Lima and Rivarossi are budget and poor quality. This could obviously change though. As Hornby are starting to successful improve the quality of their British range they could do like wise with Lima and Rivarossi.

The acquisition of Heico allows Hornby access to Heico dealership network and a native speaking toehold at the trade shows, something that the American Wal-Mart recently failed to do in Germany, with the expected result.

Any dismissal of Hornby as being an 'also-ran' is extremely foolish as the company have increased its share price by over 500% in the past five years and is becoming a world player by simply understanding the customers needs and providing the result.

Whether they can make up 5 years of absence from the market place by Limarossi and Arnold remains to be seen but Kader managed the trick with a less-able management structure.

If the comparison is made with Maerklin as the big hitter, it should be remembered by those Maerklin protagonists that Maerklin recently was sold to cover over Eu40million+ of debt to a UK/HK venture capital company and Roco recently moved into receivership. Only Fleischmann seem to be safe but it is a small family firm in comparison with Hornby which is only just starting to flex its muscle.
 

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"Only Fleischmann seem to be safe" i have heard rumors that they could be on the rocks before long too. i would love one of thir ICE's but its just too much money. its not good value. it would be about £200 for the loco's and another £200 for the set of coaches. its too much money.

Peter
 

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QUOTE it would be about £200 for the loco's and another £200 for the set of coaches. its too much money

Try looking elsewhere, I have seen them for as little (or as much) as 140-150Eu
 

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i have been looking for about 8 years but i have never seen them for that price. actually i lie. i did once see a set of power cars for £100 but it was the prototype with the pink stripe and the streamlining between the coaches. i didnt really fancy it. i want an ICE1.

Peter
 

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>it would be about £200 for the loco's and another £200 for the set of coaches
That's quite cheap when compared with some of the HO stuff I was seeing in the last couple of weeks - HAG locos come it at around £300+, Lamarr are even more but they are beautiful looking models.

Here's a showcase full of HO stuff as an example:-



The LGB stuff in the lower showcase seems quite good value by comparison.

David
 
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