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Revell Under New Management after Hobbico Bankruptcy


jargonking

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Despite all the reassuring comments in the last couple of pages, i still think this could be a prudent time to stock up on any Revell kits you might be hankering after.... 

 

Only time will tell, I guess.

 

Chris. 

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22 minutes ago, Ka-Efka said:

I'm still on the fence about that... (hoping for the best of course) They don't have that reputation though. 

What is their reputation, though? Doing a quick search for them i can't find any definite information one way or the other, all i can really see is some of the actual company information rather about what the sort of stuff they've done before.

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How exactly would they asset strip? The main asset seems to be the stock of kits. More likely they want to focus the business on what will make money in the near-term and sell them on for a profit. That may or may not be good news in the long term.

 

The only immediate danger is that they do what Phoenix did to Rover - profiting from the debt loaded on them without any concern for the business. Maybe that's what you meant by asset stripping.

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1 hour ago, Chimpion said:

How exactly would they asset strip?

Tools...............sell the tools to anybody wanting to buy into or adding to their range.  It happened with Frog(Novo and others), Airfix(dapol have many of their tools)and a number of American companies long since gone.

 

 

1 hour ago, Chimpion said:

The only immediate danger is that they do what Phoenix did to Rover

Many of the tools for Rover they were shipped out to the Far East(MG Springs to mind and plenty of other brand logos)......I watched the low loaders taking as much machinery out the works as they could

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57 minutes ago, rayprit said:

Tools...............sell the tools to anybody wanting to buy into or adding to their range.  It happened with Frog(Novo and others), Airfix(dapol have many of their tools)and a number of American companies long since gone.

Airfix sold 52 of the Railway genre to Dapol, not that many of the 848 tools they've produced

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8 hours ago, rayprit said:

Tools...............sell the tools to anybody wanting to buy into or adding to their range.  It happened with Frog(Novo and others), Airfix(dapol have many of their tools)

Both examples were not asset stripping in a comparable sense - the Frog moulds were sold by Dunbee Crombex Marx which AFAIK was a large toy producer because they were in economic troubles and hoped to become more competitive by doing the fairly novel step of essentially outsourcing kit production to a country with cheap labour cost. The Airfix moulds going to Dapol were sold either by Airfix‘s receivers or by Palitoy/GMills because the latter were not interested in those moulds, in contrast to the vast majority of other Airfix moulds. While the Airfix story in 1980 is comparable in that the kit company was still profitable and dragged under by problems elsewhere in the group, that’s where the parallels end IMO. Revell has been bought as s going concern, for Airfix it was an asset deal for the moulds,IP and inventory, but none of the production facilities. Time will tell, but it’s hard for me to imagine Trumpeter ringing Revell‘s doorbell wanting to buy select moulds.

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12 hours ago, TheVoidDragon said:

What is their reputation, though? Doing a quick search for them i can't find any definite information one way or the other, all i can really see is some of the actual company information rather about what the sort of stuff they've done before.

Interesting. My findings led to the conclusion they focus more on mid term strategy with focus on turn around, than go the quick way selling the assets to gain immediate profit and liquidating the company. 

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9 hours ago, Ka-Efka said:

Interesting. My findings led to the conclusion they focus more on mid term strategy with focus on turn around, than go the quick way selling the assets to gain immediate profit and liquidating the company. 

Their site says that's what they do but even if it was the latter i doubt they''d actually say "We like to buy companies just to strip out the useful assets and go for immediate profit". Their site is obviously going to word things in a positive way to make them look good, even if what they do is bad.

 

I'm not saying that's the case or it's what they'd do, just i couldn't really find any definite information about how things went for companies they've bought before. It was only a brief look and maybe i just searched for the wrong thing, though.

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Would the selective sales of tools be a bad thing?, revell have 3 1/72nd lancaster in their inventory-revell new tool, old revell and matchbox, they could sell the older 2 for some quick profit and keep their new tool, they have 2 H.P. halifax tools, multiple spitfire, hurricane, messerschmitt and p-51 tools - they could all be liquidated to provide funds for new tools with no impact on revell and i bet some companies like smer or mistercraft would snap them up .

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You've really got to question how valuable some of Revell's old junk really is from an asset stripping perspective.

 

Revell's value really lies in its well established brand name and vast distribution network. The very fact that they are Revell has allowed them to survive with an awful lot of really crap toolings. Nobody goes out of their way to buy Revell in the main, they are sold through mass-market retailers on the highstreet and every model shop in almost every land.

 

Who would want to buy the Matchbox Lancaster mould, and what would they imagine doing with it?

 

I'm going to venture that the moulds were sold for $50,000 because much of it is worthless nowadays. It's not like picking up Accurate Miniatures' Dauntless and Avenger toolings and being perfectly happy to sell pops in your own boxes.

 

Revell Germany has some decent stuff and some duck eggs. Revell USA has some nice but old Monogram tools, and the rest is just scrap metal with pretty shapes machined out of them.

 

The value is the brand and the inventory.

 

Any physical assets sold off would not raise much capital. Even the injection moulding machines are 10 a penny in China now.

 

You'd buy Revell cheap with an intention to cleae out the dead wood, streamline the product offering down to weed out the shelf-sitters and maximise the strengths it does have - i.e. vast market access. Or at least, that's what I would do with it.

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I think you might be one of my course tutors Jamie :)  Had to do a project and essay on a struggling company and how the parts might be worth more than the whole. You've pretty much summed it up there. Only difference was I picked Airfix and it was about 8 years ago now. Some things never change.

 

I suggested an Airfix 'Classic' range for the older tools, clearly differentiated from the modern stuff. Perhaps using the old artwork and style. In Revell's case the ex-Matchbox stuff is still pretty easy to build and would make a cracking Revell Junior range. Most of the rest could still be sold on as the kits wouldn't be brought by purchasers of higher end Revell items.

 

I think the tooling cost quoted is scrap value only. Anything that can be used, even if only short-term is a bonus.  

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End of an era in the US, with the demise of Revell-Monogram here. Technically they have been dead for awhile, running on fumes of their past glories. One can see that in that there was almost no new tooling in years, and what there was had been done outside of the US to have a Revell or Monogram logo slapped on a box of bits made somewhere else. As far as researching and designing their own products, that part of the brands had been dismantled some time ago. 

 

So now we'll see what the new owners do with the asset they've acquired. As several have said here, no new owner is going to come right out and say 'we strip valuable assets from dying companies, make some money on them, and leave the carcass to die'. But there are going to be many difficulties making it into a viable business outside of Europe again, if that is even part of a 'some day' plan of the new owners. 

 

It seems the new owners only paid about 40% of the estimated asking price/value of the assets, and were the successful high bidder at that low level. It doesn't speak much for the condition/quantity/viability of Revell-Monograms tooling if it was worth so little. I'd find it hard to believe it wouldn't have been worth as much as scrap metal. Anyway, a moment of silence for the death of the last major US model producer...

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12 hours ago, SleeperService said:

 

I think the tooling cost quoted is scrap value only. Anything that can be used, even if only short-term is a bonus.  

Again, the 50k for the tooling is for Revell US tooling, which may not be much- probably mainly cars and really old stuff. Much of Monogram‘s tools seem to be kept in Europe, which may indicate they were transferred to GmbH ownership. Tools owned by GmbH are included in the price allocated to the Hobbico GmbH shares.

Jamie is right with much of what he said.  Revell IMHO has to make the strategic decision whether they want to be a highstreet brand in an ever shrinking market, or a high end producer of kits for modelers prepared to pay a Tamiya price. GmbH has tried to cater also for the latter market for 20 years, to some extent. The older tools simply are of no use in that market, though I‘d like to see their all singing, all dancing F-102,A-4 and P-39 reissued as I find them fascinating. For the rest, neither their SSP nor the „Classic“ reissues seem to have been very successful in Germany, with some exceptions selling quickly. So any reissue of pre 1990 tooling would need picking the right subject to be viable- in the modelers market at least. Add to that a fact that Airfix doesn’t seem to be aware of - loads of the old stuff is around aplenty on the second hand market and would be cheaper than the current RRP of a reissue, restricting the sales potential.

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9 hours ago, tempestfan said:

For the rest, neither their SSP nor the „Classic“ reissues seem to have been very successful in Germany, with some exceptions selling quickly. So any reissue of pre 1990 tooling would need picking the right subject to be viable- in the modelers market at least. Add to that a fact that Airfix doesn’t seem to be aware of - loads of the old stuff is around aplenty on the second hand market and would be cheaper than the current RRP of a reissue, restricting the sales potential.

I agree with everything you say there. I thought the Classic stuff had done pretty well generally as it seemed to sell out in most places pretty quickly. The second-hand market is a different thing and not likely to be relevant to the general buyer except on a small scale. Charity shops, small market stalls and the like.

I think even among the US tooling there would be stuff that could be reissued especially in overseas markets and sell. But only if the molds are serviceable and new modern standard decals are provided. 

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9 hours ago, tempestfan said:

Again, the 50k for the tooling is for Revell US tooling, which may not be much- probably mainly cars and really old stuff. Much of Monogram‘s tools seem to be kept in Europe, which may indicate they were transferred to GmbH ownership. Tools owned by GmbH are included in the price allocated to the Hobbico GmbH shares.

Jamie is right with much of what he said.  Revell IMHO has to make the strategic decision whether they want to be a highstreet brand in an ever shrinking market, or a high end producer of kits for modelers prepared to pay a Tamiya price. GmbH has tried to cater also for the latter market for 20 years, to some extent. The older tools simply are of no use in that market, though I‘d like to see their all singing, all dancing F-102,A-4 and P-39 reissued as I find them fascinating. For the rest, neither their SSP nor the „Classic“ reissues seem to have been very successful in Germany, with some exceptions selling quickly. So any reissue of pre 1990 tooling would need picking the right subject to be viable- in the modelers market at least. Add to that a fact that Airfix doesn’t seem to be aware of - loads of the old stuff is around aplenty on the second hand market and would be cheaper than the current RRP of a reissue, restricting the sales potential.

Even excluding Monogram's aircraft, the Revell, Monogram, Renwall, and surviving Aurora molds have to number into the thousands, each weighing a ton or more. Figuring a scrap price of $100/ton, the scrap value of the molds would seem to be at least double what was paid. Part of the reason they sold for so little might be where the molds are currently located. I'm sure transporting a few thousand tons of steel molds any distance would cost a small fortune.

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7 minutes ago, VMA131Marine said:

Even excluding Monogram's aircraft, the Revell, Monogram, Renwall, and surviving Aurora molds have to number into the thousands, each weighing a ton or more. Figuring a scrap price of $100/ton, the scrap value of the molds would seem to be at least double what was paid. Part of the reason they sold for so little might be where the molds are currently located. I'm sure transporting a few thousand tons of steel molds any distance would cost a small fortune.

Transport is often overlooked in my experience. I was involved in stripping out looms for lace and packing them for a new life in India. The UK company had quoted a delivered price not ex-works. A nice profitable asset strip cost them a fortune. Possibly demonstrating why they went broke in the end.

Among all those molds some would be suitable subjects for a limited re-issue even if not all are serviceable. As I said above release USA only stuff Internationally and vice versa and I'm sure demand would be there.

We shall see.   

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On 14.4.2018 at 6:20 PM, TheVoidDragon said:

Their site says that's what they do but even if it was the latter i doubt they''d actually say "We like to buy companies just to strip out the useful assets and go for immediate profit". Their site is obviously going to word things in a positive way to make them look good, even if what they do is bad.

 

I'm not saying that's the case or it's what they'd do, just i couldn't really find any definite information about how things went for companies they've bought before. It was only a brief look and maybe i just searched for the wrong thing, though.

Most of it is in German, may be that's the reason you didn't find much? Have found some articles in more regional newspapers. And the respective companies seem to do fine.

But, this does not mean it'll work out for Revell as well. 

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Revell GmbH starts strengthened into future with new owner

Revell GmbH (Germany) announces today that in a court hearing which took place on 13 April 2018 at the US court having jurisdiction in Delaware the sale of Revell GmbH has been confirmed in favor of a company of the international investment group Quantum Capital Partners (QCP) with its company seat in Munich (Germany) as sole shareholder. The sale happened in the course of Hobbico, Inc.‘s restructuring process under Chapter 11.

Bünde, 16 April 2018

For Revell GmbH, which so far belonged to a company of the Hobbico, Inc. group in Champaign (USA) initiating a restructuring process under Chapter 11 of the US bankruptcy code at the turn of the year and announcing its plans to sell the group of companies, a lasting solution in terms of change of ownership emerged throughout this proceedings on 13 April 2018. New sole shareholder of Revell GmbH will be a company from the international investment group Quantum Capital Partners (QCP) in Munich. The operating business will not at all be impaired by this.

German investor as new Revell owner

The sale also includes key assets for the North America business, such as trademarks as well as the extensive tool bank being so important for the plastic model building segment. With the change of ownership Revell experiences a strengthening, as this involves an extension of the sales market and an even wider range of products.

Worldwide business operated from Bünde

The previous management in Bünde under the control of Stefan Krings will in future operate the worldwide business including North America.
„Revell is very happy to have Quantum Capital Partners as strong partner, who will assist the company to reach its further international growth. At this point I like to also thank all trade and business partners for the confidence they have placed in us in the past weeks of interim period”, is the comment from Stefan Krings on this news.

Steffen Görig, representative of QCP further explains: “Revell is a well-known and well- established company and it has shown impressively in the past how to found its position as successful toy brand. We will build on this strength and will further develop the Revell brand with its unique position as provider of model kits and toy manufacturer. We look forward to assist Stefan Krings and his team in that achievement and to realize the full growth potential of Revell.”

 

Press release ends.

Edited by gavingav1
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It sounds promising. I'll be the first to say that my experience with Private Equity firms is not good - anybody who knows me will know why!

 

I'd never be one to trust any Private Equity again though on balance. They have a goal and that is to make money somehow, no matter what the cost might be. They won't invest unless they can see the potential for a return though... If this means that Revell can continue to exist in it's current form for the next few years, then so much the better for the hobby. I just won't be surprised if either in the end that the company get asset stripped or (hopefully!) sold onto a higher bidder having had a successful turnaround.

 

The caution for me comes from the fact that on Friday 29th September last year, JFK from Birmingham had appeared on my roster twice daily from May. New routes to Dubai, Goa, Maldives, Mauritius and the USA were going to be announced in the next week - the press releases were all prepared and all was set. At 3:30am on Monday morning, my job along with thousands of others and the entire airline had gone. Private Equity firms can be brutal, but I'm fairly sure not all are as horrific as the one we were unfortunately subjected to were.

 

Fingers crossed - let's hope Revell has a long future ahead of it now!

 

Chris

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Agree with you Chris. Private Equity do not invest for long terms but to make fast money. The do invest, but only as much as is needed to build up the company for the sell to a new owner. In fact it can happen, that if the company performs very good from the start (because "weak trees" have been already cut) the Prvate Equity can even pull out money from the company (I know from experience...). Play- resume,... unless there will be an owner, who is interested in long term growth. But I suppose there are no many. The problem can be that no owner is interested in long term investments, which can become a problem. Quite sad but this is common practice nowadays - the dark side of stock markets.

Never the less this is still better than no Revell anymore.

René

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"[...]We look forward to assist Stefan Krings and his team in that achievement and to realize the full growth potential of Revell.”

 

I might be too negative, but this sounds like an underlying threat...

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