Hornby price increases

If the pound keeps failing against world currencies it's going to make bother Hornby dash for china rather foolish...

John Turner said the following on 16/08/2008 10:17:

I can certainly understand the raw materials issue - I just wish some of our customers would :-)

"Paul Boyd" wrote

Absolutely BUT, is it wise to increase prices TWICE inside nine months at a time when retail sales are in fairly significant decline?

John.

There may be a glimmer of light at the end of the tunnel, at least for non-oil products - automotive batteries have dropped slightly this week after monthy rises of the last two years.

Cheers Richard

No doubt some spreadhsheet whizzos calculated that this would maintain "shareholder value."

"beamendsltd" wrote

Crude oil is also 25% off its peak price, which also makes one question the wisdom of Hornby's latest price increase.

John.

or simply try to prevent them going bust!

Cheers Richard

Yes but still 25% above the start of year price (it was IIRC below the $100 mark at the end of last year), I fear that this has more to do with falling sales and Hornby spending money earlier this year on 'non care' acquisitions - has Bachmann put their prices up?

China is going to cost them an extra =A32,000,000 this year !

If Hornby did go crash who do you think would pick up the pieces ?

I should think it's more to do with increasing costs in China. I've no handy reference, but I've read on the BBC News Business section that maufacturing costs in China are ineveitably rising (I expect the workers rather fancy getting paid these days, and the H&S virus seems to have started arriving) causing people to look at India again. The circle turns I suppose!

I'd expect Hornby to be very aware of the consequences of price rises in what I expect is a very price sensitve market sector.

Cheers Richard

"Jerry" wrote

Not that I know of, but they did earlier in the year.

John.

"Dragon Heart" wrote

I can't see that happening, or at least not in the immediate term, but if it did then I suspect Bachmann would have enough global resources to swallow them up and not notice the cash drain.

John.

I thought that Bachmann also had many fingers in China though, the point (that you snipped) was about the value of the GBP against other currencies, Bachmann is in the same boat as Hornby in this respect surely... Has Hornby kept any UK based injection moulding facilities or have they ripped it all out for extra warehousing space?

"Jerry" wrote

Bachmann is part of Hong Kong-based Kader Industries, of which model railways is but a small part. They also own their own factories, unlike Hornby.

John.

Whooossssshhhhh.....

But they are still at the mercy of currency exchange rates.

Seems Kader havent the capacity for Bachmann UK models without considering any more. However Bachmann could certainly benefit from some decent marketing staff so they might like to take over Hornby ? :-) Cheers, Simon

"If Hornby did go crash who do you think would pick up the pieces ?"

I was thinking of the Chinese themselves !

Chris

The Chinese have serious economic problems of their own. There are forecast to be hunger riots there before the end of this year.

(kim)

China received its final shipment of food aid from the UN back in April ? They have used this food aid to support food-for-work schemes for the past 25 years. Their problem, like ours, is the growing gap between rich and poor which I assume they will deal with in their normal 'efficient' manner.

Chris