Revell Under New Management after Hobbico Bankruptcy

[bootneck]

A question was asked on Revell Germany's FB page, whether the Hobbico bankruptcy would affect them.  Herewith the response from Revell Germany:

" Revell
Revell is not part of the Hobbico bankruptcy filing under Chapter 11 and will continue to operate “business as usual” moving forward. There is no impact on the availability of our products."

 

I'm still, still going to get more Revell stuff... just in case!

 

Mike

[Eric Mc]

Not good. Hopefully the model manufacturing side of the business can be sold if necessary and can keep going.

To be fair, that often seems to be the case.

Don't forget that in the US, Chapter 11 is not bankruptcy itself (or liquidation as we say in the UK). It's a court procedure that stops the creditors of the business from placing the business into bankruptcy/liquidation. It's usually referred to as Chapter 11 Bankruptcy Protection. Many businesses emerge in one piece from Chapter 11.

 

[Hardtarget]

More news on Hobbico

 

It has now gone into bankruptsy from Protection in the last few hours.

 

It will now be sold off whole or in parts and many employees to be let go.

 

Hundreds of jobs to go.

 

LInk to TV news in the USA

 

http://www.illinoishomepage.net/news/local-news/hobbico-files-for-bankruptcy/909851835

[TIGER HOBBIESLIMITED]

Revell is not part of the Hobbico bankruptcy filing under Chapter 11 and will continue to operate “business as usual” moving forward. There is no impact on the availability of our products.

 

Odd statement above as of 2012 Hobbico purchase Revell Germany, so if the parent company folds there as got to be some impact.

 

But Revell are a strong brand so I am sure they would be soon under new ownership.

 

Hobbico company history below.

 

In 1971 Tower Hobbies was founded by Bruce Holecek.

In 1972 Great Planes Model Distributors was founded by Don Anderson.

Hobbico was started in 1985 when Tower Hobbies was combined with Great Planes Model Distributors to form Hobbico, Inc.

In November 2005 the company became a 100% employee-owned ESOP (Employee Stock Ownership Plan).[2]

In May 2007 Hobbico acquired Revell-Monogram, famous maker of Revell plastic model kits.[3]

In January 2010 Hobbico acquired model rocket maker Estes Industries.[4]

In September 2010 Hobbico was appointed exclusive distributor for Thunder Tiger in North and South America. [5]

In January 2012 Hobbico acquired the brands Axial, Durango, Arrma and dBoots tires.

As of January 2015 Hobbico no longer distributes Thunder Tiger products.

In 2012, Hobbico acquired Revell Germany located in Bunde, Germany, and launched Hobbico Europe.[6]

As of January 2018, Hobbico filed for bankruptcy protection

Read more: http://modelhangar3.com/thread/6611/hobby-giant-hobbico-bankruptcy-protection#ixzz53tYvdWa1

 

[Homebee]

""Subtle" crisis communication from a spin doctor?

Source: https://www.facebook.com/pg/Revell/posts/?ref=page_internal

 

 

V.P.

Edited January 12, 2018 by Homebee

[bootneck]

Interesting statement from Hobbico's declaration document:

"....... Beginning in 2016, the Debtors’ businesses began to struggle due to a number of factors which included…a lack of investment in product innovation...."

 

Mike

[SleeperService]

7 hours ago, Truro Model Builder said:

 

Are you sure you are not confusing Hobbico with the UK-based Hobby Company (also known as Hobbyco), who were the successors to Riko and who are the UK distributors of Tamiya, Italeri, Dragon, Zvezda and others? They are two totally separate organisations.

 

Either way, I would expect both Revell USA and Revell Germany to be sold as Hobbico would need to divest itself of what it may see as unnecessary elements that are not its core business, ie radio control, and in the latter's case a consolidation within its domestic market.

 

I'd forgotten that parallel TBH. What I was trying to get at was Hobbico and RIKO both followed the same doomed business model. 

The problem for any potential buyer is going to be reconciling essential range cross-over and products each Revell branch holds that are targetted at one of the markets. Trying to run them as separate entities with range crossover, licensing issues and all the rest is a large part of the problem.

 

I speak from bitter experience in a similar situation in a different industry. 

[Meatbox8]

21 hours ago, Thomas V. said:

New age management, spent huge sums on Disney franchises and radio control with miserable sales, just hope that Revell finds proper owner that will invest in scale modeling,

or at least enable the company to have some degree of decision making.

 

Sounds a bit like Hornby and the London Olympics.

[Habu12]

13 hours ago, Paul A H said:

If Revell are Hornby's (Airfix's) main mass market competitor in the UK, then what's bad for Revell ought to be good for Hornby. Provided, of course, they can hang in there. 

 

In reality, I'm sure the former-Revell Germany kit producing side of the business will find another buyer. Maybe Volkswagen can buy them and then they can churn out even more kits of boring contemporary VAG products  Their capacity to produce new tool kits does seem to have dwindled since the Hobbico takeover.

 

I knew it was news when Hobbico acquired Revell AG. They were doing fine before that. And by fine, I mean I know they had issues, and were looking for an answer. But Hobbico wasn’t it. They would’ve made it through. 

[Habu12]

4 hours ago, Homebee said:

Source: https://www.facebook.com/pg/Revell/posts/?ref=page_internal

 

 

V.P.

Well that’s good news. I still imagine they’re looking for a buyer. 

[Mike]

4 hours ago, bootneck said:

the Debtors’ businesses began to struggle due to a number of factors which included…a lack of investment in product innovation....

Well colour me completely surprised! /s

 

I can't quite understand how the ripples of Hobbico's demise will not affect Revell DE at all, but I hope that's the case, believe me as Revell DE pre-acquisition was one of the companies I watched eagerly for new releases.  I'm guessing that DE is one of the assets that will be disposed of, but I feel for all the American worker that are going to be thrown on the unemployment line.  Perhaps it's time for the old management to buy it back for 10c on the dollah, and get them to throw in the RM name for good measure?  Maybe we could convince Jeremy Clarkson to buy it?  He's good at buying cheap and selling high.

[Thomas V.]

2 hours ago, Meatbox8 said:

Sounds a bit like Hornby and the London Olympics.

Far worse than that because unlike Hornby, Hobbico

 Scrapped plans for numreous toolings

( I know at least a dozen, more than likely there were more ) to finance Star Wars and Cars franchises

In EU boosted prices by 25-40%.

 

But its not only Hobbico's fault for current RoG situation, more than a few bad decisions stem from current RoG management( poor choices in outsourcing that led to Revell for instance not being able to produce more than few accurate aircraft  kits in the last 7-8 years.

 

 

 

[Shane]

16 hours ago, Mike said:

How long since they bought Revellers Germany? A couple of years at best, and now they've dragged them down with them. Hobbico seemed content to rest on their laurels and bask in past glories, repopping old tooling while the rest of the industry moved on in terms of quality. They applied that to an extent to RG, although they did still keep doing a limited amount of new tooling, but not what they once were.

 

I hope RG finds a new owner that will restore it to financial and creative health, and although I've not much time for Hobbico management, I hope their employees get sorted.

RoG became a separate entity from Revell in 2006, and was purchased by Hobbico in February 2012

 

So it's been declining for as long as it was rising

 

Shane

[SeaVenom]

Wasn't the problems with the Halifax and it's inaccuracies linked to Hobbico's takeover?

[TIGER HOBBIESLIMITED]

he Debtors’ businesses began to struggle due to a number of factors which included…a lack of investment in product innovation....

Well colour me completely surprised!  /s

 

I can't quite understand how the ripples of Hobbico's demise will not affect Revell DE at all, but I hope that's the case, believe me as Revell DE pre-acquisition was one of the companies I watched eagerly for new releases.  I'm guessing that DE is one of the assets that will be disposed of, but I feel for all the American worker that are going to be thrown on the unemployment line.  Perhaps it's time for the old management to buy it back for 10c on the dollah, and get them to throw in the RM name for good measure?  Maybe we could convince Jeremy Clarkson to buy it?  He's good at buying cheap and selling high.

 

I agree with the above post from (Mike) it just does not add up, I am lead to believe there will be  a statement from Revell DE to the UK Revell sellers, but it would have been better to be pro-active rather than re-active, to put Revell sellers at ease.

 

Hobbico owned them since 2012 so if they are sold, the very least it will mean new owners and new money will have to be found, so there will be some affect

 

We will all be happy if Revell DE keep producing. 

Edited January 12, 2018 by TIGER HOBBIESLIMITED

[Truro Model Builder]

15 hours ago, Homebee said:

Source: https://www.facebook.com/pg/Revell/posts/?ref=page_internal

 

 

V.P.

 

Business as usual? With your parent company on the verge of collapsing? I've heard of denial, but this takes it to a new level.

 

Hobbico have had no interest in the plastic kit buyer. They bought Revell Germany purely to get their hands on an established European hobby distribution network to break into that region. Since the purchase Revell have annually increased their r/c offerings as the investment in new mouldings has declined.

 

However, I am convinced that there is a silver lining. Revell will continue in one form or the other, and I think it will be with a renewed focus on what they have always done well: plastic kits.

 

[Giorgio N]

7 hours ago, SeaVenom said:

Wasn't the problems with the Halifax and it's inaccuracies linked to Hobbico's takeover?

 

Never heard anything about this and I very much doubt it...

Even before the Hobbico takeover, Revell had done some gems and some not so accurate kits. The difference is that here on BM the Halifax was dissected in every part so we all know about its problems while other kits were not discussed much so their problems are less known.

Edited January 12, 2018 by Giorgio N

[Tomppa B]

On 1/11/2018 at 10:24 AM, Mike said:

How long since they bought Revellers Germany? A couple of years at best, and now they've dragged them down with them. Hobbico seemed content to rest on their laurels and bask in past glories, repopping old tooling while the rest of the industry moved on in terms of quality. They applied that to an extent to RG, although they did still keep doing a limited amount of new tooling, but not what they once were.

 

I hope RG finds a new owner that will restore it to financial and creative health, and although I've not much time for Hobbico management, I hope their employees get sorted.

This is exactly with I suspected and feared when it was announced that Hobbico had bought up Revell of Germany!

[janneman36]

As far from my concern is that i would like to see Revell survive in a normal manner, they produce very nice kits at a very normal price..

Accuracy comes at a price but is not related to takeovers but more about costs.

In order to release a normal priced kit you get a certain amount of time to develop one because time is money!!!

The more time you spend on acuracy the less time you have to get revenue..this is the same reason why i don't built that much

I am diagnosed with AMS lately.....

 

Cheers, Jan

[Homebee]

And from Germany.

Source: http://www.nw.de/lokal/kreis_herford/buende/22028763_Revell-Mutterkonzern-in-den-USA-stellt-Insolvenzantrag.html

 

Quote

Revell: Mutterkonzern in den USA stellt Insolvenzantrag

Insolvenz in Eigenverwaltung: Hobbico im US-Bundesstaat Illinois hatte in den vergangenen Jahren mit starkem Wettbewerb zu kämpfen. 2012 wurde Revell in Bünde an den US-Konzern verkauft

Gerald Dunkel
12.01.2018 | Stand 12.01.2018, 06:39 Uhr

 

 

Bünde. Vor sechs Jahren übernahm der US-amerikanische Konzern Hobbico den Bünder Spezialisten für Modellbau Revell. Damals galt das als Glücksfall für die Bünder Firma, die sich durch die Übernahme "weitere strategische Möglichkeiten" erhofften, wie der damalige geschäftsführende Gesellschafter Hans-Ulrich Remfert im Februar 2012 mitteilte. Vor zwei Tagen meldete Hobbico in den USA Insolvenz an.

"Chapter 11" in den USA bedeutet "Insolvenz in Eigenverwaltung" in Deutschland

Das sogenannte "Chapter 11" ist die Art und Weise, nach der Hobbico die drohende Zahlungsunfähigkeit angezeigt hat. Wie Revell-Marketingdirektor Andreas Bittlinger gegenüber der Neuen Westfälischen gestern auf Nachfrage erklärte, entspricht das der "Insolvenz in Eigenverwaltung" in Deutschland. Dabei bleibt die Geschäftsführung des Unternehmens weiterhin in der Verantwortung. Bei einem herkömmlichen Verfahren wird ein Insolvenzverwalter eingesetzt, der alle weiteren Vorgänge steuert. Bei der Eigenverwaltung hingegen wird der Geschäftsführung ein gerichtlich bestellter Sachwalter zur Seite gestellt, der die Unternehmensleitung lediglich überwacht. Dieses 2012 eingeführte Verfahren kann beantragt werden, wenn ein Unternehmen zahlungsunfähig zu werden droht und die Sanierung eine gute Prognose hat.

Für Revell in Bünde soll das Verfahren des Mutterkonzerns Hobbico im US-Bundesstaat Illinois laut Andreas Bittlinger keine negativen Auswirkungen haben. "Wir selbst sind zwar eine Tochter des Konzerns, aber von dem Verfahren nicht betroffen. Das Einzige, was sich für uns ändern kann ist, dass wir einen neuen Mutterkonzern bekommen, sobald sich ein Investor gefunden hat." Ansonsten sei Revell eigenständig.

Wettbewerb war in den vergangenen Jahren stark

Hobbico gründete sich 1985 aus den seit 1971 beziehungsweise 1973 aktiven Firmen Tower Hobbies und Great Planes und ist eigenen Veröffentlichungen zufolge einer der größten Hersteller und Anbieter von Hobbyprodukten aller Art und Modellen mit Fernsteuerung wie Drohnen, Flugzeuge oder Schiffe weltweit. Wie aus einer Pressemitteilung der Konzernspitze hervorgeht, sei vorrangig ein sehr intensiver Wettbewerb in den vergangenen Jahren Grund für die momentane Situation.

Markt mit funkgesteuerten Modellen ist stark für Revell

Revell in Bünde war nach mehreren Besitzerwechseln 2006 wieder auf dem Weg zu Erfolg. Der Umsatz stieg 2011 nach Jahren der Umstrukturierung um damals 9 Prozent auf fast 40 Millionen Euro. 2012 dann der Verkauf an Hobbico. Das sei laut Geschäftsführung damals kein Widerspruch, ein Unternehmen auf dem Weg des Erfolgs zu verkaufen. Damals hieß es, dass das für die Amerikaner ein "logischer Schritt" sei, weil man mit einem "starken Partner in Europa Fuß fassen" wollte.

Nach der Übernahme sank aber zunächst der Umsatz von Revell nach zwei erfolgreichen Jahren wieder um 3,7 Prozent. Seitdem legte Revell aber wieder besonders im Produkt-Segment der funkgesteuerten Modelle zu.

 

Copyright © Neue Westfälische 2018

 

And the Revell Germany press release words

 

Quote

Revell-Germany announced that its parent company, Hobbico, Inc. (“Hobbico”) filed a petition for relief under Chapter 11 of the United States Bankruptcy Code while it seeks an orderly finalisation and implementation of its comprehensive restructuring plan. In conjunction, Hobbico also announced its plan to sell the company.
Because Hobbico’s bankruptcy filing was made in the United States and is strictly limited to the company’s U.S. operations, Revell-Germany is unaffected. Additionally, Revell-Germany suppliers, vendors and customers will not be impacted by the process.
“Our Revell-Germany operation is not filing for bankruptcy protection,” said
Louis Brownstone, President of Hobbico, Inc. “It will continue to provide the same high-level of service to our customers. We are optimistic that the filing will better position the U.S. operations for future growth.”
“Most important for all of us at Revell-Germany, we continue to operate ‘business as usual’ moving forward,” said Stefan Krings, President of Revell-Germany. “Looking ahead, our top priorities remain continuing to build our business with our high-valued vendors and suppliers, while simultaneously providing the same high-level of product support to our customers.”
Although Revell-Germany is not part of the filing in the United States and will continue to operate its business, the sale of Hobbico could have future implications for Revell-Germany. The decision by Hobbico to file for bankruptcy and pursue a sale of the company allows Hobbico the opportunity to reduce their debts, restructure their liabilities, attract new capital investment and position the overall company for future growth.
From January 31 to February 04, 2018, Revell will be present at the Nuremberg Toy Fair presenting its new products for 2018. “We are convinced that we can continue the growth path of 2017 with our attractive range of novelties and welcome our international customers in Nuremberg,”

 

V.P.

Edited January 13, 2018 by Homebee

[Branky]

Survive in a normal matter is open to debate. These days making kits is a completely different ballgame than 25 years ago. Most of the toyshops are either taken over by chains or has disappeared completely leaving the model companies with far less exposure to clientèle. (meaning  that grandfather buying a present for his grandson is far less likely to buy a modelkit these days as he just cannot get near one.) Secondly the remaining cliéntele is much more demanding  (meaning wanting perfect quality, accurate till the last rivet, cheap as hell and available everywhere) but facutal buying very little as well as facing costs they did not dreamt of 25 years ago (meaning facing the Boeing solicitors and airline solicitors if you want to make a kit of the Boeing 737 in Easy yet livery) and theire fee's add up to the price cosiderably) So business as usual?  With far less exposure, clientéle buying far less and the ever rising costs because everyone wants their piece of the turnover it takes much more time for the producer to actually earn money with their kits...   Food for thought ...

[Caerbannog]

Revell Germany had a turnover of 58 million € in 2015 - 25 million were RC (a growth of 42,6 % in that year). Plastic kits were "just" 23,3 million (with a groth of 11% that year). My impression was that the sale to Hobbico was no good move from the beginning and I am no fan of the RC things either, but finacially this was maybe no bad Idea looking at these (2 year old) numbers.

With that in mind I am a bit more carfull with the Disney costs. In my view the Star Wars kits are partly very nice but mostly poorly executed toys. And the prices for SW kits seem to have doubled since Disney bought Lucas Film (if I were Disney, I would also try to get my investment back...). Not sure how good the SW kits sell, but I should think they would sell a lot better in "proper scales" and with a bit more love regarding the details.

That said I very much hope Revell will survive and all employees of Hobbico will keep their job or get a better one.

[Chimpion]

I believe Toys R Us in the US filed for chapter 11 recently - maybe Hobbico have been burnt by them not having to pay their bills. Clearly there was trouble before, but this might have been the last straw.

 

[PhoenixII]

English translation of what is the pertinent part of HB's earlier post:-

 

"For Revell in frets to the proceedings of the parent company Hobbico in the US state of Illinois, according to Andreas Bittlinger have no negative impact.

"We ourselves are a subsidiary of the Group, but are not affected by the process, the only thing that can change for us is that we get a

new parent company as soon as an investor has found." Otherwise, Revell is independent."

 

The above may be taken a number of way's. My thinking is, first, company 'set up'.

When Hobbico 'took over / bought out' Revell De. the company may have been set up in such a way that,

'should one part of the company fail, it would be 'cut loose' to 'sink or swim' but NOT cause the rest of the group to fail.' 

OR, a variation on this, as the companies share no common LAND boundries, and as both groups are on independant soveign territory.

 

Another view is 'does US law have any bearing on Europe, or a European based subsiduary?'

Reading Andreas Bittlinger's comment's, my first reaction is 'No', outside of the fact that Revell De.

is an asset of the company, it will have more leeway to continue trading very much as before.

 

Revell De. obtaining the rights to use the Revell / Monogram names? that's something for a new owner and the legal beagles to sort.

 

This, I'm thinking, will not go down the route of the Humbrol / Airfix / Heller debacle,

as I'm sure that Revell De. will have held onto their own moulds, 'Thank you very much!'

 

The one SURE thing is the employees of Hobbico USA will get 'stiffed' and the legal beagles will make LOADS.............

My thoughts are with the employees..............

 

Paul

 

 

[Chimpion]

It could also potentially get messy regarding assets and liabilities in the different companies. It's possible in theory to move all the assets to one jurisdiction while leaving the liabilities in the one filing for bankruptcy.  If done obviously this is usually pretty close to fraud, but it could be very blurred and result in potential liabilities in the surviving part of the company that take years to resolve.

 

I have no idea whether this might be relevant to Revell and don't intend to imply any wrongdoing on the part of anyone associated with this company.