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Hornby have taken control of the French distribution company for model railway and Jouef products throughout France. At the same time Hornby have created a new company, Hornby France, which will take responsibility for the distribution of the Jouef and Scalextric brands in........yes you have guessed it, France!

This announcement is from Hornby:-

QUOTE HORNBY ACQUIRES FRENCH DISTRIBUTION COMPANY

Hornby Plc ("Hornby"), the models and collectibles group, has announced that it has acquired the assets and ongoing business of its distributor in France. MKD, a family owned company, is based outside Paris and is a well-known distributor of model railway products and Scalextric throughout France. Founded in 1981, MKD reported sales in 2004 of Euro3.8 million, producing earnings before interest and tax of Euro226,000.

Under the terms of the Sale and Purchase Agreement Hornby acquires the "Fonds de Commerce" of MKD. Under this arrangement, frequently used in France, Hornby acquires the fixed and intangible assets and retains existing employees of which there are 11. Hornby does not assume responsibility for any of MKD's liabilities. The consideration for the Fonds de Commerce is Euro750,000. The inventory of MKD is subject to a separate valuation and purchase agreement for an amount of approximately Euro750,000, subject to audit.

Frank Martin, Chief Executive of Hornby commented,

" The acquisition of the assets of MKD and the establishment of Hornby France is a further vital strategic step in establishing a pan-European model railway and slot racing business.

" MKD has been the Scalextric distributor in France since 1996 and the founders of the business, Olivier and Martine Lanter have many years of experience in the French model railway market. Both previously worked for Jouef in the 1980's.

" The Jouef brand, which we acquired with the Lima assets, enjoys a similar level of awareness and affection amongst consumers in France as Hornby does in the UK. In order to maximise the benefit from our plans to re-invigorate the Jouef product line, following the relocation of the manufacturing activity to China, it was important for us to control the distribution of Jouef in France. Direct control of our distribution of Scalextric in France will also enable us to attack the market more aggressively in the same way as we have in Spain this year through Electrotren. " We expect to be able to increase significantly the sales and profits in MKD (Hornby France) as substantially higher sales volumes will be channelled through the existing, fixed cost base."

Happy modelling
Gary
 

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Have to give credit to Hornby they seem to be doing this right. We should be proud of what they are doing and whilst production is now in China they are still a great British company.
 

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Dennis, it is still a British company. They may sub-contract their manufacturing, but then many others do the same [as you say]. In business terms, it is a logical move to move manufacturing to China. The quality has improved and the cost has remained very much affordable.
 

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Great for Hornby. their new British outline products are superb. Amused by the the Marklin news that they are "the largest model railway manufacturer in the world"? Surely Bachmann/Kader Industries and the others who supply the US market are much larger organisations? Largest manufacturer of 3 rail AC, perhaps...

Marklin strike me as the kind of company that Hornby Dublo/Meccano might have developed into - 3-rail, metal loco bodies and exhorbitant retail prices - but it could well suffer the same fate. The Germans could do with some healthy competition and a bout of re-structuring. Wrenn kept HD going as a tiny niche supplier of outdated toy railways - I suspect that Marklin will escape that, but only with some clever management. Try the Hornby business model!
 

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The US market is very segmented with literally dozens of manufacturers of locomotives. Bachman is mostly thought of as a producer of inexpensive starter sets. Their reputation is quite different I think in England than it is in here.

Hornby's business model is quite a bit different than Marklin's in that they are trying to increase their international market through their purchase of various "national" brands. If they can pull it off then we will all win. They remind me of a toy soldier company called King and Country. They are also a British company with their manufacturing done in China. They have taken the toy soldier market by storm with the number and quality of their new offerings.
 

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Five or six years ago Hornby was in the same position as Marklin - manufacturing product locally for the local market, and generally failing. The first phase of their rehabilitation as a company was to address their failings and sell product, at a profit, that met the needs of their British customers. This they did, successfully, allowing them to start phase 2 of their transformation - expand internationally applying the same (Euro design, Chinese manufacture) model. One would have thought the experience of Roco would have been a lesson to the German companies. Marklin's problem of high retail prices, high European costs and insufficient profitability won't disappear unless they fundamentally re-structure. But companies in trouble never think it's going to happen to them?
 

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It is quite easy to sound Euro sceptic about these issues but "old" Europe has been slow to awaken to the threat (or opportunities) presented by the emerging Tiger economies such as China. German firms, with their huge social costs, will find it increasingly hard to compete on the same terms with companies such as Hornby.

60134
 

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Having just returned from Shanghai I couldn't agree with you more, we all need to keep up including the United States, but let's get back on the subject of Jouef and Hornby's purchase of that company. Did they only produce French outline? And what of N-Scale steam? I would like to see some of that.
 

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I've still got the Jouef Mark3 coaches which for a while were the only scale length ones available.

Talking of "N" scale its going to be interesting to see what Hornby do with "Arnold" and whether they develop any British outline stuff.
 

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QUOTE Talking of "N" scale its going to be interesting to see what Hornby do with "Arnold" and whether they develop any British outline stuff.

That would be neat. I've always thought that N-Scale would be suited for the UK but then again it would be an uphill battle against what's already been established.
 

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I have recently been rummaging around in various hidey holes, digging out all sorts of bits and pieces I had forgotten about, chapters in a life filled with indecision about what to model. Latest items to be unearthed were a Horny Blue Pullman and, loose in that same Pullman box, a single example of those old Jouef British carriages!

I wonder what else is going to crawl out of the woodwork over Christmas . . .
 

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Not sure how the UK distribution system would work in the United States. I do know however that signing up with Walthers gives them an openning to every hobby shopy in the United States that even thinks about carrying trains. So broad is Walther's reach that if you go into any hobby shop and want to order something the first thing they grab is Walther's catalog and if it's not in there you usually just get a lot of long faces and the proverbial shrug of the shoulders.

Sad but true.
 
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