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Hornby news


jenko
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Unfortunate news, however I’m sure Hornby are not alone in these troubled times with stretched and expensive supply chain issues. Outsourcing may look beneficial on ‘prospective’ balance sheets, however it doesn't take much for potential savings to vanish when problems occur and the parent company has no physically means to control rising costs. Let us hope that Hornby co. can ride out this latest setback. 
Cheers.. Dave. 

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Rather than base comments on a press report the Hornby Statement is at:

 

https://wp-hornby-2020.s3.eu-west-2.amazonaws.com/media/2021/11/Interim-2021-FINAL.pdf

 

this has some interesting background information including a statements of the  percentages of sales by brand sold through the different routes to market. Which shows that direct sales, as a percentage of the sales, have grown.  over the last two years.

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It's interesting that they are disclosing that their container costs have gone up by £10K each!  I wonder how many kits fit in a container, but that looks like a noticeable amount per kit. It also means they are paying over £1 million in shipping surcharges!  On a turnover of £22 million that's significant, especially as direct manufacturing costs might only be 30% of turnover.  I wonder at what point it becomes beneficial to onshore production?  It's not just cost, but now lost sales as well.

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10 minutes ago, 3DStewart said:

I wonder how many kits fit in a container,

A 40ft container has a capacity of 2,120 cubic ft. If you can get 10 models in a cubic foot this gives over 20,000 models if fully used,. However the container could be shared either with other parts of the Hornby group or others and a £60 Hornby coach or £200+ locomotive take up a lot less space than say a £36 series eight Aircraft.

 

Rather than onshoring production some companies only ship the basic product and add instructions and packaging in the home country, this saves paying to transport air around the world.

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1 hour ago, 3DStewart said:

  I wonder at what point it becomes beneficial to onshore production?  It's not just cost, but now lost sales as well.

 

£22 million turnover for a loss of £700,000 and nothing about bringing any production home despite the difficulties with China (power) and shipping - quite the opposite from this;  " we begin a process of migrating production to different countries.."

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despite being held back by supply disruption. Container shipping costs have soared, requiring us to raise our selling prices in August to cover this. Shipping times from our overseas factories have nearly doubled to circa 70 days

 

The easy answer is to do the manufacturing here, but then the easy comeback to that is it'll cost more....

 

From my perspective (just a simple modeller who buys kits of the things I like the look of, enjoys sticking the things together the best I can with maybe a few extra bits to add detail, paint the best I can and then admire my handwork - maybe the majority of modellers?) I am in the position financially to able to  pay a little more to enable more jobs and money to stay within this country, hell, as an example I like the Cromwell and whether it has the wrong amount of wheel nuts be damned, 🤣  I don't care, it looks like a Cromwell and if I didn't have other subjects I like more I may well have bought the Airfix one 

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On 03/12/2021 at 11:08, Toe said:

The easy answer is to do the manufacturing here, but then the easy comeback to that is it'll cost more....

It's not the easy comeback, to Hornby, it is the only correct comercial answer at this time. The Hornby board will be monitorng all options especialy considering the hike in container costs and weighing these against the one off costs of transfering operation back. Production wasn't moved first to China and subsequently India for fun.

 

Whilst you're able to pay a little more how much of a 'little more' would the average Airfix customer accept? 

                  80%? as one UK manufacturer of plastic storage boxes is hiking prices next year.

 

 

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