Athearn is bought out!!!!!

ANNOUNCEMENT


Horizon Hobby, Inc. Acquires Athearn Trains

Posted: 01/05/2004

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Horizon Hobby, Inc. Acquires Athearn Trains
Champaign, IL - Horizon Hobby, Inc. is pleased to announce that it has
purchased Athearn Trains of Compton, CA, a leading manufacturer of model train
products. Athearn's headquarters will remain in southern California under the
continued leadership of its President, Tim Geddes, who has been an executive at
Athearn since 1994. Product support and warranty repair service will also
remain in the Athearn facility, along with product development and
manufacturing.
Athearn's management and staff will remain the same and Athearn's production
and new release plans will continue uninterrupted throughout the transition,
including the production of Athearn's traditional "blue box" kits and it's
Ready-to-Roll?, Genesis? and Athearn N scale products. The development and
production of the exciting, new products is continuing as planned, including
the recently announced sound-equipped HO scale "Challenger" steam locomotive,
the HO scale SD70 MAC locomotive, the N scale Coalporter and the N scale
Automax. The only significant change resulting from the acquisition is that
after March 1, 2004, Horizon will become the exclusive distributor of all
subsequently released Athearn products and all new production of existing
Athearn products.
This new business combination, allows two leading companies in the model
railroad industry to join together in a unique way. In commenting on this new
acquisition and alliance, Horizon Chairman Rick Stephens stated, "Since we
began distributing model train products in 1996, we have been committed to
providing model train retailers with the best service and selection. The
acquisition of Athearn truly emphasizes how seriously we take that commitment.
From its inception in 1943, Athearn has had a reputation as a pioneer and an
innovator serving the model train hobbyist. Athearn's sixty-year history of
developing and delivering quality and value in model railroading is a perfect
fit with Horizon's focus on innovation and service. It's exciting to think
about adding our marketing strengths to the knowledge and expertise of the
people of Athearn. We expect great things to come out of this for dealers and
the industry, as well as Horizon."
Tim Geddes the President of Athearn, Inc. commented, "We are extremely proud
and pleased to be able to form this affiliation and permanent relationship with
Horizon Hobby, as we feel it will help Athearn best realize its future
potential. Under this new arrangement and structure, we will be able to turn
over the major advertising, marketing and distribution efforts to Horizon and
use their outstanding expertise for those important activities. We will be able
to focus our energies and attention on the continued enhancement and expansion
of our product line and on the careful and detailed development of new products
to meet the wishes of our customers. As we are maintaining a significant
continued involvement in Athearn's future, we are especially pleased to join
with a company who shares our strong commitment to customer service."
Interested retailers can contact Horizon Hobby toll free at (800) 535-5551 or
via e-mail at snipped-for-privacy@horizonhobby.com.




Reply to
wearing fire retardent suit
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this can only be great news.
all hobby stores having to work though one distributor means higher prices for the small stores and lower prices for us at Wal Mart
Reply to
John Obert
And bad news for Walthers. Athearn is/was one of their MAJOR lines. Now they're stuck with pushing Bachmann & Rivarossi even more. :-(
Don
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Reply to
Trainman
It is interesting how much will stay the same when one company acquires another. A few years back a local company was acquired by a competitor. All stayed the same until the papers were signed. The next day the facility was closed.
Tom G.
Reply to
Tom Groszko
Don, you say that as if it were a bad thing?
I am just starting back into it, after 30 years, my dad used to have a layout in our attic, 24x40 completely around the walls, you entered via a ladder stair in the center.
My new layout will be set in 1880s. I will be wanting to pick up 2-3 unlettered 4-4-0 locos (The Credit Valley Railway used the large stack 4-4-0s exclusively), also one 2-8-0 for a Toronto, Gray and Bruce train which will cross the CVR at Melville Junction.
I was looking at the MDC 480-6554 for the TG&B locomotive.
For the 4-4-0 I was looking at (Walthers #):
Bachman 160-51124 IHC 348-13814 MDC 480-520 Rivarossi 635-5417
What is the better one to get, or is there another brand?
Reply to
wannand
My main concern is that now that Horizon is the sole distributer they will be able to charge what the want for the entire Athearn line.
I would look for prices to go up on all Athearn products.
John Binford
Reply to
wearing fire retardent suit
Bad news for almost every one. The small dealer that can't but $500 a month from Horizon is out of the Athearn line. I guess almost out of model trains.
wear>
Reply to
Charles Kimbrough
The MDC will probably be a good runner and can be made even better with a set of gears from NWSL. The only Rivarossi I have is an 0-8-0 I bought about 1968. It always ran well and still does. The concern I would have with the Rivarossi and the IHC would be flange depth though I think that Rivarossi has corrected this at least with some models. The Bachman 4-4-0 not being a Spectrum might work fine or might be DOA or anything in between. As far as pulling especially if you have any grades I would think the MDC or IHC would do best. Bruce
Reply to
Bruce Favinger
I got an email concerning this from Athearn. Notice there is only one distributor now. This could lead to a much increased price on Athearn depending on what discount structure Horizons has. So much for the little UP 4% being a strain on pocket books
Jerry
Reply to
Jerry
Rivarossi is no longer in production. The facilities closed right after Walthers' production run. As a matter of fact, Walthers paid the court to open the facility and finish their run.
Don't count on a lot of new Rivarossi items.
+GF+
Reply to
+GF+
Horizon Hobbies is primarily a distributor of radio control airplanes.
This makes about as little sense as if, say, Walthers had bought a model aircraft company, like Carl Goldberg.
Reply to
Ed
It doesn't say there will be one distribution source. Plently of distributors can and do offer there lines through other distributors. It happens throught the industry. Now if Horizon decides to be sole soure that remains to be seen. The discount structure you mention might only lead to a price increase from your basement bombers. Horizon does not sell to folks that do not have a sorefront retail operation. They also have Minimum advertised pricing on their exclusive lines. I don't anticipate any such "much increased prices".
Dave
Reply to
Dave Henk
If a shop is not selling enough to purchase $500 a month from a distributor then they shouldn't and likely won't be in business. Horizon has been a good distributor for us over the last 6 years. They are not our sole or largest (#2 for us) vendor. I wouldn't lay claims to being a large hobby shop but I do shop around and buy from Intermountain and various smaller sources when applicable (will it sell and will I make a justifiable profit are the only questions that matters).
Dave
Reply to
Dave Henk
The press release specifically states "Horizon will be the exclusive distributor...."
Look for higher prices, the end of deep discounting by the mail order and online sellers, and the demise of the blus box line.
Compton will become only a "west coast warehouse", and look for the complete US operation to be gone in five years or less.
I pray I'm wrong, but don't bet the farm on it.
Don
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Reply to
Trainman
Good Morning All,
I just read this post and all the replies. I don't know what to make of all of this....but one thing I do know. In the past five years or so I have bought next to nothing from Athearn. One pair of Genesis diesels, one pre-built covered hopper and some tractor trailers. I have gone to Bowser and Accurail for my primary source of freight cars. I did this because Athearn, one, has not changed anything about their primary line in the way of detailing their cars, etc. Yes the newer Genesis cars are nicely detailed but think about all the bitching that went on here and in other forums about things like how hard it is to put different couplers on their cars. Speaking of couplers....Athearn still forces that lousey plastic, McHenry coupler on you in their kits and their lower end prebuilts. The Athearn steam program was average at best with big problems with the 2-8-2 and the way it tracked. And worry about the blue box disappearing.....that has been gradually happening for a couple of years now. In the store I work in.....I cannot remember the last time a customer wanted an Athearn kit and our ability to get anything in a blue box has been difficult at best. As far as their prebuilt cars...price was usually a couple of dollars more than say an IBF car or an Atlas car. Even some of the Intermountain and Red Caboose cars are cheaper than the Genesis line of freight cars. And parts.....try to get Athearn parts now. At one time that was an Athearn strong point. The ability to get parts for engines and cars. Not anymore and not for at least two years now. When a customer asks us to order a part we say we will try but don't hold your breath. Ok....enough rambling.....Athearn is sold. Let the chips fall where they may. The Athearn line is not the draw it once was as an entire line.
Bob Rule, Jr. Hatboro, Pa.
Reply to
EBTBOB
Actually, Dave, it DOES say that they will be the sole distributor. Last line of the second paragraph.
This is what I anticipate happening:
- MSRP will increase on most of the line soon after takeover, to help pay for the cost of acquisition.
- Since wholesale competition will be gone, the dealer discount will be cut. (Or, at the very least, will not be as good as the current lowest-price distributors.) This will raise the "street price".
- A certain Northeastern distributor will start to dump Athearn at ridiculously low prices.
- A couple of other distributors who also have retail operations MAY offer Athearn at wholesale as a courtesy, but dealer discount will be very small. Likely candidates to do this are Walthers and Bowser.
- If the above doesn't happen, and Athearn disappears from the Walthers catalog, older Athearn will languish on distributor shelves after the 2005 catalog comes out. This may lead to more dumping.
- I suspect almost all manufacturing will move to China, and Compton will be just a distribution center. (Although this would probably happen anyway.)
- Bye-bye Bev-Bel. Likewise CM Shops, at least their line of cars.
- As street prices go up and distribution narrows, sales will drop.
Effects on the industry as a whole:
- In the short term, it will be great for Horizon, since they will pick up a BUNCH of new dealers. It will be bad for other distributors, because they're losing a major product line, plus some sales of other items. (Dealer needs some Athearn, so he tacks on some other stuff to fill out his Horizon order.)
- In the long term, sales will be hurt. This has happened when other lines pulled out of the general distribution system.
- It will be a mixed bag, initially, for full-price dealers. Reduced competition means more sales, but this will be affected by "dumping" of older product for some time. (Even after the old stuff dries up. People will be reluctant to pay the higher price once they've had a taste of the dumped merchandise. This happened with P2K.)
- Discount dealers will be hurt overall.
- Modelers will see some great deals initially, as older product is dumped. In the end, street prices will be higher, and product will be less available.
Overall, I don't think it's a good thing. I understand WHY it was done. I don't see it as good for the hobby, but I doubt the decision was made on that basis.
Peter King in NY
Reply to
Peter King
I agree with most of what you have said. In the long run I think that if Horizon stays the sole distributer it will hurt Athearn and the hobby.
Peter K>
Reply to
Charles Kimbrough

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