Jump to content

Kitty Hawk / Panda Closing


madcat911

Recommended Posts

Do ya‘ll really think their kits will disappear that quickly? One would think they sold greater volumes than Wingnut Wings, and even those kits can still be had, albeit overpriced.

 

IMO, the real shame is that KH offered some really popular and well-known subjects such as a modern UH-1 that no one else did (discounting the old Italeri kit). Why did it take for a company like KH to do these? I think that the loss of these kits is the biggest hit for modeling in general.
 

One can only hope that some other company steps in now that there is less competition. 

Link to comment
Share on other sites

10 hours ago, Mike Esposito said:

IWould be a stupid business decision. Their most important asset.

Well buying their molds could also be a stupid business decision. What would be the price for a particular tooling set ? Would the kit produced using this tooling set sell enough to recover the invested money and in how much time ? Are the molds in a good shape ? How much would cost the production of the kits ? The buyer could shoot himself in the foot by buying a particular tooling. Only KH knows how profitable each of their kits have been. I wouldn't be surprised if many of their kits weren't very profitable and if some weren't profitable at all (break even not reached).   

  • Like 1
Link to comment
Share on other sites

Just doing my good citizen of Britmodeller bit. Hannants have now put their Kitty Hawk Models stuff back up for purchase.

  • Like 1
  • Thanks 1
Link to comment
Share on other sites

 There has been much wailing and posting already but, as my tutor always says, no business has a right to survive it must do so by it's own merit. 

Tiger Hobbies knows what they're talking about with the distribution side, I've seen companies who decide how much money they want to make over the next few months, look at how much they sell and increase the prices to match. It never works as the sales invariably reduce and/or costs go up, but IMHO this isn't the real issue.

Imagine you've been able to raise funding to start a business and, being a model-maker, decide you'd like to get into that side of the business. You have a huge list of subjects that you know will sell because you like them and you're always right. Now you need to make choices; what scale, price point, target customers, subject, and so forth. Then you have two more vital choices which can make or break your company

Distribution. Will you go global or start local? The subject choice may favour one or the other but eventually the wrong choice will kill you.

Quality. This will need to be consistent unless you go for different lines. So do you take care in getting the shape and dimensions correct and simplify detail in some areas, make sure the kit assembles well, go for a high-end product will the best possible result.

 

KH seems to have failed to address any of these issues and added to the issue by ignoring comments about errors visible when they could be fixed. That is not a trait unique to a culture or particular group it is an individual thing.

The distribution set up was not aimed at casual purchasers, the price point either and in many cases the assembly was 'challenging'. The enthusiast market was the only other target and for them basic accuracy, availability of after market parts to increase detail, thin clear canopies, and other things matter. They were certainly not satisfied by the product offered at the price set, thus slower sales, here we are.

I was not alone in responding to issues raised by the CAD drawings, with photos to show the area of concern, and what else may be affected only to meet with no response at all. Not even a single generic 'Thank You All...' post. The Cougar is better than many of their offerings but is by no means correct as a quick look at the windscreen area will show.

Fail to learn means you're likely to fail. Sad, harsh, cold and ruthless it may be but that's business folks.

 

 

 

  • Like 8
  • Sad 1
Link to comment
Share on other sites

5 hours ago, Laurent said:

Well buying their molds could also be a stupid business decision. What would be the price for a particular tooling set ?

In a business liquidation, the price is set by what people will offer not what the seller wants. In the Hobbico bankruptcy that led to the sale of Revell, the entire tooling bank and all the companies IP was sold for about $3 million. That must be a tiny fraction of the amount invested over the 60+ years Revell was in operation. The big question you are really posing is whether the tooling is worth more as scrap than to produce more kits. I think it’s likely that the tooling gets bought by another kit manufacturer, time will tell.

  • Like 3
Link to comment
Share on other sites

8 hours ago, David2703 said:

Do ya‘ll really think their kits will disappear that quickly?

That depends, there may be no initial shortage but remember it's a psychological thing too. You can compare it to a bank run. At first people start to fear the bank will not be solvent soon, so they all try to withdraw their money at once, which then leads to the insolvency all feared in the first place.

You can see it already starts when you read similar threads on different forums. Many modellers decide now to buy the kits they eyed on for a long time. This will for sure cause some kits to get out of stock soon at many vendors, and this in turn will fuel the purchase of the remaining stock by other modellers as they fear they will be gone soon too. Then, some will pull their kits out of the stash and put them on auctions sites for a healthy profit as they see that there is a high demand for these kits. This will finally drive the price up of the remaining kits on the market.

Simple economics, the pattern is always the same :lol:

 

Cheers

Markus

  • Like 1
Link to comment
Share on other sites

28 minutes ago, Shorty84 said:

This will finally drive the price up of the remaining kits on the market.

Simple economics, the pattern is always the same

This will be followed by a price collapse when the kits are, inevitably, reissued by another company. The one exception to that rule seems to be Wingnut Wings, which has an owner with enough money to do whatever the heck he wants with the molds, apparently.

  • Like 1
Link to comment
Share on other sites

Not directly, from what I've read in the various discussions KH sits a huge backlog of kits in their warehouse as demand from retailers was only a fraction of what was assumed. Why this is the case (did retailers cut back their orders? And if yes, why?), no idea. But it seems production outstripped demand by a huge margin lately (on the, now closed, Facebook page KH assumed it will take them 1 year to sell off their stock of remaining kits).

  • Confused 1
Link to comment
Share on other sites

What do I know, but it seems to me that the existence of a huge stockpile at the manufacturer's warehouse would tend to drive the price down, not up, yes? Unless the stockpile is particular kits no one wants, of course. Someone get in there and scope it out!

 

John

Link to comment
Share on other sites

10 hours ago, Laurent said:

Well buying their molds could also be a stupid business decision. What would be the price for a particular tooling set ? Would the kit produced using this tooling set sell enough to recover the invested money and in how much time ? Are the molds in a good shape ? How much would cost the production of the kits ? The buyer could shoot himself in the foot by buying a particular tooling. Only KH knows how profitable each of their kits have been. I wouldn't be surprised if many of their kits weren't very profitable and if some weren't profitable at all (break even not reached).   

A lot of guesswork on your side without a single fact pointed out, so what is a purpose of your post? You have zero insight into any aspect of KH business model and profitability of any of their products, have no clue what exactly is behind their decision to close, but somehow you have a lot to say about that matter.

Link to comment
Share on other sites

Something which may have resulted in overstock is the huge hike in seafreight prices from the middle of last year. Whereas the pandemic resulted in more people coming back to the hobby, they have been buying known brands like Airfix. KH are not the only business to have faltered. Hopefully they will sort out the business rather than fold.

 

They do need to up their game in certain respects or they may never fully recover.

  • Like 4
Link to comment
Share on other sites

2 hours ago, Zacharias said:

A lot of guesswork on your side without a single fact pointed out, so what is a purpose of your post? You have zero insight into any aspect of KH business model and profitability of any of their products, have no clue what exactly is behind their decision to close, but somehow you have a lot to say about that matter.

I reacted to a message posted by a forum member and that reaction was one message only... well let's see what will happens with the toolings then...

Link to comment
Share on other sites

If you want any KH stuff get it sooner rather than later.

 

I ordered a Blackhawk and 'Little Friends' helicopter kit yesterday on eBay from a good value and reliable China seller I have used previously and 24 hours later, he/she has bumped up the price by 11 and 5 quid respectively; doubtless jumping on the bandwagon. The price will only go one way moving forward.

 

At those prices now, Hannants are now competitive and I ordered my last 2 'wants' this evening from the Big H - 1/35 Sea Hawk and 1/32 F-5E (they only have one of these F-5E's left at the time of post) and both are very reasonably priced compared to eBay prices.

 

Gary

Link to comment
Share on other sites

45 minutes ago, SleeperService said:

So do you take care in getting the shape and dimensions correct and simplify detail in some areas, make sure the kit assembles well, go for a high-end product will the best possible result.

 

You forgot about money and time. Each project of this type is prepared to give the best possible result from the money invested, and to be completed in the time allowed. This means that the technological division of the mould design must be such as to enable the use of a considerable number of elements in different versions of the aircraft. Such division means more complicated assembly of the model and making compromises between different versions of the plane.

 

At the top of this illustration should be a description of "what modellers demand: detailed and accurate, cheap, easy to build".

 

spacer.png 

 

 

45 minutes ago, SleeperService said:

KH seems to have failed to address any of these issues and added to the issue by ignoring comments about errors visible when they could be fixed.

 

It is standard in the industry to reveal most projects with a long delay, which usually means that most / any feedback sent to the company is irrelevant. If you see the early stages of design in social media, the CAD project is nearing completion or is even finished. If you see an advanced CAD design, at that time the company has already cut the moulds / is close to test sprues.

 

Sometimes corrections can be made at this late stage, but this is done when the correction is small and easy to make and does not include additional substantial investment. And no, it is not possible to improve a project indefinitely. Someday it has to be finished and passed on to the next stage of implementation.

 

Complaints from modellers that "the company doesn't listen to them" are because the complainants have no idea about the whole process. Besides, in most cases they also overestimate their level of knowledge about the details of the aircraft or vehicle, but that is a topic for a completely separate thread.

  

45 minutes ago, SleeperService said:

The distribution set up was not aimed at casual purchasers, the price point either and in many cases the assembly was 'challenging'.

 

I'm not sure what group of modellers you are referring to as "casual purchasers" or "enthusiasts".

 

If you are thinking of beginners, then the truth is that most of the modern technologically complex kits have never been, are not and will not be aimed at them.
At the same time, there is not much point in producing simple jet or helicopter models in 1/48 or 1/32 to be cheap and easy to assemble by beginners. The investment will not be noticeably smaller, and sales of simplified models will not necessarily be greater, because their price will be only slightly lower than that of complex models. For the price to be really low, the model would have to be at the level of kits from the 1960s - a dozen parts on one frame. There are still a lot of such models on the market and I don't think that modellers particularly miss this kind of kits.


If by "casual purchasers" you mean people who buy a model and put it in storage to be made in a few years (or never), then they are driven by very different factors. The degree of complexity usually is not important, the price only a little, what matters most is the space in the stash - if they don't have it, they won't buy another five kits.

 

The problem overlooked in this discussion is the interest in particular topics, which translates into model sales.

 

In the case of aviation, the hierarchy is as follows: the best sellers are models of WWII aircraft, then jets, and finally helicopters. The difference in buyer interest is really significant. In the case of vehicles, it is similar: WWII models sell better than modern equipment. That is why it is more profitable for long run steel moulds companies to make another Bf 109 and Mustang instead of Strikemaster or Panther and Tiger instead of Alvis Stalwart.

 

In addition, 1/48 and 1/35 scale models will sell in smaller quantities than their 1/72 scale counterparts, because they take up more space and are more expensive.

 

If the vast majority of a company's catalogue are models in categories that don't sell very well, then the company is taking a big risk. This risk can be very rewarding, as you can become a company that monopolises a particular subject. In this case, it seems that modelers' interest in the products of Kitty Hawk and Panda is not high enough for further production to be noticeably more profitable.

 

 

45 minutes ago, SleeperService said:

They were certainly not satisfied by the product offered at the price set, thus slower sales, here we are.

 

Certainly?

 

Even with access to in-house data on the sales of individual kits, order structures, distribution networks and so on, it is impossible to make such clear-cut diagnoses.

 

There could be many reasons for the closure of a business, especially for companies operating in China. This is not the first Chinese company to go out of business and it will not be the last.

 

For modellers, this is bad news for a basic reason - any other manufacturer will look at what Kitty Hawk / Panda have been releasing and think very hard about whether to produce these kinds of kits.

  • Like 4
  • Sad 1
Link to comment
Share on other sites

2 hours ago, B.sin said:

Perhaps after they sell off the inventory they have,  they'll start up again?  Or is that just wishful thinking?

 

Brad

Assuming they have in-house design staff and others who would not be needed just to sell off stock, what would those people do in the interim. The company isn’t going to pay them to do nothing. Look at what happened to the WnW staff. The company isn’t technically dead, but it’s a zombie. Sounds like KH is going the same way.

  • Sad 1
Link to comment
Share on other sites

40 minutes ago, VMA131Marine said:

Assuming they have in-house design staff and others who would not be needed just to sell off stock, what would those people do in the interim. The company isn’t going to pay them to do nothing. Look at what happened to the WnW staff. The company isn’t technically dead, but it’s a zombie. Sounds like KH is going the same way.

Very sad!  I wish Mr.Song, and the people at Kittyhawk, the very best!!!

  • Like 1
Link to comment
Share on other sites

2 hours ago, Piotr Mikolajski said:

 


If by "casual purchasers" you mean people who buy a model and put it in storage to be made in a few years (or never), then they are driven by very different factors. The degree of complexity usually is not important, the price only a little, what matters most is the space in the stash - if they don't have it, they won't buy another five kits.

 

 

 

Interesting viewpoint.  For sure, lack of space in stash slows down rate of kit purchases.  Maybe Airfix/Revell should expand their ranges to include 1:1 scale garden sheds ?

  • Haha 3
Link to comment
Share on other sites

12 hours ago, Shorty84 said:

Not directly, from what I've read in the various discussions KH sits a huge backlog of kits in their warehouse as demand from retailers was only a fraction of what was assumed. Why this is the case (did retailers cut back their orders? And if yes, why?), no idea. But it seems production outstripped demand by a huge margin lately (on the, now closed, Facebook page KH assumed it will take them 1 year to sell off their stock of remaining kits).

Never purchased one of their kits but my understanding is that they released almost every version of the Sikorsky Hawk/SeaHawk family within 12-24months, with that rate of releases did they peak too soon. Not allowing people time to enjoy their current purchase before yet another version  came out was too much too soon hence contributing to the problem of over stocking. Along with all the other problems mentioned here my laymans opinion is that while subject matter was spot on, business acumen was somewhat lacking. 

Link to comment
Share on other sites

If they quit production of new kits temporarily because of an over supply of inventory then this is taking place for financial reasons.  Inventory is expensive to finance and any company that finds itself with too much inventory on hand needs to correct the situation.  And stopping the creation of new inventory seems the most prudent place to start.  And yes this probably means some people will be redundant as the situation is fixed.  But I am optimistic that the situation can be fixed and have seen many companies come through these difficulties stronger and wiser.  In the mean time if you see a kit you need then get it (for me I need an F-101B, a couple choppers and those Russian support trucks).  I wish Kitty Hawk the best and encourage them to work hard to get through this. 

  • Like 2
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...