It's been a while since I contributed here. Busy, busy!
I can confirm that Horizon does NOT have a strict storefront requirement. They did, initially. Some months into the Athearn purchase, they changed the requirement. Non storefront dealers must meet a number of requirements, key ones being a website with its own domain name AND being located in commercial space.
One such dealer is Tom's Trains of Connecticut. Tom started as internet only, eventually opened a storefront, and later closed it. He was, and is, a Horizon dealer, with their blessing. (IIRC, he actually came here and stated that, although I can't come up with the right combination of search terms to find it.)
Non-storefront dealers such as Big Al, who operate out of their homes, are not allowed by Horizon.
I should comment that this isn't meant to put either of the above businesses in a bad light. Both are run by fine gentlemen, and are fairly well known and respected here on this group.
I'd also like to add that, contrary to popular opinion, Walthers does not have a strict storefront requirement, either! They do allow internet-only dealers, with similar restrictions to Horizon. (EXCEPT that they do not require dealers to be in commercial space.)
As for "the demise hasn't happened yet", while the takeover was about a year ago, Athearn and MDC have only been out out of the Walthers catalog for about 4 months. Not that I believe that they will go out of business because of it, but I don't think they'll feel the full impact until the 2006 catalog comes out. I still believe that, eventually, Horizon will be trying to get back into Walthers. They can't advertise everything every month, and the Walthers catalog is still wildly popular as a source of what's available, even with the internet available.
Another often-ignored point is that, prior to Athearn and MDC, Horizon was a minor player in the model railroad market. They may be a powerhouse in other hobbies, but before last year, there was no real reason for a trains-only store to buy from them. Virtually every line they carried could be had from several other distributors. If you had 8 other sources for Atlas, and didn't need RC planes or plastic model kits, why would you need another account? (Remember, these remarks apply to shops selling TRAINS ONLY, not general hobby shops. I understand why a general hobby shop would want Horizon as a major supplier.) For all practical purposes, Horizon was buying their way into model railroading by gaining control of a major manufacturer. And in light of that, it's clear why they pulled out of other distributors. It's not strictly about keeping all of the cash from an Athearn sale. It's also about "forcing" (for want of a better word) a certain segment of dealers to buy from them, when they previously didn't need to.
I don't think any of the dire predictions will come true, but the last chapter isn't written yet. And that chapeter is going to dribble out over the long term.
Peter King in NY