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Wednesday, 16 March 2016

Hornby on Brink of Collapse

Hornby’s chief executive Richard Ames, has quit the ailing British firm, following a 3rd profit warning in just 5 months. Will this be the end for one of Britain’s best loved manufacturers?

Hornby, which also makes Corgi cars, Airfix kits and Scalextric, have produced children’s toys since the early part of the 20th century. They produced most of their product lines in the UK until 1999 but subsequently moved all of their manufacturing to China. Despite attempts to move some production back to the UK in 2012, it could be the unreliability of their Chinese manufactures that is set to toll the death knell for Hornby. The irony of this will be in the event that Hornby does go under, I would be willing to bet that it will be the Chinese that buy it!

Hornby have struggled to consistently get there train sets out of China and into European stores for the last few years, despite going to the length of changing Chinese factories in 2014. Stories of businesses struggling to get stock out of China are not new. Many business owners of, start-ups specifically, were lured to China by the promise of low unit prices only to be hit by low quality or delayed stock. Such delays can have devastating effects for fledgling businesses and, as we can see in the case of Hornby, more established companies too.

A huge downfall to Chinese manufacturing of any product, is the potential threats against  intellectual property. A common problem for businesses that have chosen to manufacture their toys in China is to discover cheaper knock-off’s being produced in the very same factory utilising their innovations. What is more, there is very little that can be done about it.

As for Hornby, James May, the Ex Top Gear presenter, has recently attempted to encourage his twitter followers to buy a Hornby train set to save the company. We would suggest that you perhaps opt for one of their Quickbuild kits made at the Plastech factory in Sussex instead!

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