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Russell Sheldon
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This assumes that Scalextric is the brand leader in the USA.

Hornby announced impressive interim results for the six months to 30 September 2003 and no doubt their 2003-4 financial year results will be spectacular. Interim results announced were:-

* Pre-tax profits up by 33% to £2.2 million (2002: £1.7 million)
* Sales up by 13% to £15.8 million (2002: £14.0 million)
* Diluted earnings per share up to 19.5p (2002: 14.4p)
* Cash position improved by £1.6 million to £3.1 million
* Interim dividend increased to 8.0p (2002: 6.0p)

Given that for some people world domination and the USA are synonymous, it is indeed encouraging that the US market turned a small profit (just under 3.5% of the US market turnover) during the past six months:-

"Export markets continue to achieve high growth as a direct consequence of our strategy of producing Scalextric products relevant to individual markets. In North America, Scalextric-USA recorded dollar denominated growth of 45% over the six-month period and made a positive contribution to group profit (against a loss in 2002). We believe that the North American market continues to represent a significant opportunity to increase group sales and profitability in the medium term."

However, less than 10% of Hornby's turnover is generated in the USA. During the six month period from April to September 2003, Hornby's total turnover amounted to £15,793,000; of this, £11,517,000 was generated in the UK and £4,276,000 in the rest of the world, of which only £1,378,000 came from the USA. It is unclear how much of this was derived from Scalextric (vs. Hornby trains) specifically.

What is however interesting is that Hornby practically doubled the number of concessions in the UK, from 52 to over 100, to which they ascribe much of their success:-

"Overall sales growth in the UK during the first half of the year has come primarily from major accounts and in-store concessions. A year ago we had 52 concessions in the UK but there are now over a hundred of these outlets in operation. This impressive progress demonstrates a growing awareness amongst progressive retailers of the commercial opportunity represented by the Hornby and Scalextric ranges."

So, I guess the question is would the concession model be equally successful in the US? If not, how should Hornby go about increasing awareness, or is Scalextric-USA doing enough already?

Unfortunately, it seem that Artin stole a march on Hornby in Afghanistan a few years ago...



Kind regards

Russell
 

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Beppe Giannini
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Am printing this because it requires ponderation
But yes it would be interesting to know Scaley's share
- Gareth ??

Beppe
 

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I visited the rather large FAO Schwarz in Florida lat year, and I was very surprised to see no Scalextric products there at all. The only similar things I could see were the hot wheels range of products.

Considering that Daytona was only an hour or so away it struck me as an oppourtunity missed.
 

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Scott Brownlee
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Assuming a suitable product (right price, right quality), growth requires increased awareness. Whatever the conversion rate from Viewers to Buyers, the more Viewers to get, the more Buyers follow.

More stores means more people seeing sets on shelves means more opportunities to convert potential customers to actual customers. In the US I presume Scalextric is not a household name, hence focus should be on building awareness. All they need is a stack of money to do it...

However, this is true even in UK. Okay, it is a household name, but not one put before as many people as it might be. Just think of the relative weight of advertising for PS2 and Scalextric. Even Warhammer has a bigger high street presence.

The increased advertising by Hornby in magazines like Autosport is a good, targeted move, as is the sets for Toys R Us, Marks & Spencer and others before Christmas. It puts the idea in front of folk who had not thought they wanted a set before they saw it (unlike us who go to sleep and wake up thinking slots). A certain percentage of them will never buy anything more, but some will, some will even become obsessed NSCC or SlotForum members.

I suspect Hornby wisely put more emphasis on good, high visibility distribution than advertising since it is the most cost effect solution for a company with its resources. No point being on TV every ten minutes if customers then can't find a shop stocking the stuff, is there.

In the US it is harder to break into the market as it is so big. Web sites help, but to grab a mass audience they need either a ton of money for marketing or some lucky product placements in movies or TV. What do I mean? Well, imaging if the boys in Friends had a slot car track instead of table football.

Scott
 

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The only way to reach the American market is through TV. Without TV your only hitting a niche market that even goes to a hobby shop. That's why I think growing the hobby in the US through the hobby shops is mistaken. Most will not bite until people are beating down their doors for slot cars. These people have limited margins they will not go on the limb again. Hornby trains? Nobody runs them here.

Websites? Forget it you're already preaching to the choir. Growth has to come from the manufacturers. As far as Hornby who says that they won't sell-out now? Seems to me that there is a higher chance now that their business has taken an upturn than before.
 

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QUOTE Well, imaging if the boys in Friends had a slot car track instead of table football

Well now we have a can of worms. Almost every post has good points, re: US Market.

#1 Can the the Hobby shop mentality. put some sets in the big retailers. Blowout specials like we read about in the UK Department stores. I never see specials like I read about here on SF.

#2 Football? we call it foosball !!! But yes, Imagine Homer getting out his 60's cox gt 40 or chapparrell and kicking Bart's ass.

#3 Thank god for the internet , or we would all be up sh**** creek, my local store just closed. And they were not worth a sh**** , anyhow.

#4 Isn't FAO Swartz Bankrupt?

#5 Scaley..Bankd curves... a bridge... on a roll....lets go ahead and as we say "put the competition away" with good product and stock, and delivery and parts and service scaley seems to have counter punched fly's detail and quality, carrera's
understanding of Americas fondness for classic detroit muscle, and vintage nascar. Now don't fumble the ball (the super bowl is coming).
 

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I seriously do hope the drop it in a figure of speech.

Scalex are big and they know it. If Scalex do this they go for detail and they make good race cars not toy cars ninco, fly, scx their knckered, they havnt got an audience then. There wont be a choise anymore.

I know it's a little extreamist, but seriously think about what could happen if scalex carried on.

I dont want to see scalextric everything, that would just be boring. I could write pages on what we would be deprived of.

I mean we couldnt moan at fly and we couldnt throw ninco's into the barrier without bits coming off..

to me, scalex cars are TOO fragile. something always falls off ie challengers headlight

Rob.
 

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QUOTE Given that for some people world domination and the USA are synonymousGiven Hornby's seemingly world-dominating position in slot cars, one could be forgiven for thinking that, although the USA has to be considered important, it might not actually be necessary.

As an exercise in relative thinking and attitudes, it's interesting to compare some figures quoted by Russell with the figures reported in Nuro's near 4-year old link.

Mar 1999:
Sales of £21.2 million - down 15% on previous year (Hornby reported to be thinking of selling up)
Sep 2003:
Sales of £15.8 million - up 13% on previous year (described as "Impressive" in spite of being considerably lower than 1999, which was already 15% lower than 1998!)

Although overall sales are well down on earlier years, profitability seems to be rising and I suppose that is the most important factor. It doesn't matter how much money you turn over if it doesn't actually make a profit in the process.

Personally I suspect that there isn't a great deal of growth available in the slot market as a whole - that apart form the odd blip, it is about as big as it is going to get and that individual companies can only aim at a bigger slice of the existing pie, not a bigger pie.
So, if one company grows, others will suffer.
In the longer term, I suspect strongly that the manic race into digital control will provide painfully ample proof of this, as three out of four known systems are swiftly killed stone dead and the remaining survivor staggers on until it collapses too.
I suspect Hornby may be best placed to weather this carnage.

An afterthought on the USA market.
If USA were to show signs of signifacant growth, I would guarantee that unfailingly energetic American initiative would spring rapidly into action in order to take advantage of it.
 

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Russells post assumes scaley domination.

I agree with Int., I want some competetors, and variety. Having a company that gets plenty of exposure for slots aint that bad. They may sell the track, and get folks started thru marketing. That may well provide the market that keeps the competetors alive. A lot of those cars the small companies, and fly,ninco,scx,carrera sell, are running on scaley track.
 

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Mecro -£21 mill was sales in 1999, £15 mill was PROFIT in 2003. PROFIT in 1999 was £1million. That is some impressive growth.

As for Scaly in USA, they have an additional problem of pricing. Hornby have the weak dollar and import tax to contend with, making their products more expensive in a country where things are generally cheaper than over here. However, it is a unique and quality product, so maybe they can overcome this...
 

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Russell's post saysQUOTE * Pre-tax profits up by 33% to £2.2 million
* Sales up by 13% to £15.8 millionThat seems quite clear to me.

Far from Hornby having any "additional problem of pricing" in the USA - all the other major slot companies are European based and the €Euro has been considerably stronger than the £GB! This suggest that Hornby have less of a USA price problem than anyone else.
 

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All very interesting.

I'm surprised at the comparatively small amount that the US contributes. No doubt that is changing and that red Torino with the white stripe will help no end. I just hope they put a stronger bumper (that's fender to the ex-colonists) on the front because I don't think the current Hornby design and build is tough enough for the crash inducing crossover.

Sheesh, if US Johnny gets a small piece of fender in the eye then Margate had better have some decent legal representation as well!
 

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So what do you make of the fact that there is so little manufacturing of Slot products inthe USA? Maybe the Beatles had to go to the States to impress but Scalextric don`t.

If I were put on the spot to make a suggestion to promote growth then it would be to propose a franchising system in Great Britain to help people set up commercial Circuits. These could eithe be permanent or mobile (or as in my case both). Scalextric tried by using Mehga Bowl Croydon and it failed. I had a long discussion with Ben Collins about this at Carlton TV during filming. It failed because the people running it were inept and not dedicated to making it work. If on the other hand people were taken on that are keen then it would work. Now I`m not going to go into what I`m doing and how I do it, I`m not opening myself up to flack! If anybody wanted help then I am willing, as is the case right now,to help and advise. I realise that most people reading this would not be interested but a lot of people I know certainly are.

In short if run correctly then it works. I am so busy with Phoenix, my diary is full two months ahead and I`m enjoying what I do. But more importantly the people that come and race have a great time. They buy cars,track and accessories and produce real growth because they have somewhere to go and use the stuff and advice and support from people who are interested. Apart from the specialist a retailer can usualy just about tell you the colour of a car and the price. that was in a model shop, you get even less sense out of Argos or Toys R Us.
 

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On the profits subject - profits will be up against lower sales last year then in 1999 because Scalextric now manufacture all their products in the far east. Instead of paying a Brit £5 an hour to make a car, they're now paying £5 a day at best!
 

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Here in North America, if you want to make it in Toys, which is where Scaley's Holy Grail of breakthrough would be found, there is only ONE KEY....

WAL MART, the World's Number 1 seller of TOYS.

If you are an average parent (non-hobbyist yourself!) looking to buy young johnny an electric slotted race toy, right now its slim pickings of really crap "imitation" slot cars, some battery powered, mostly in the range of 1:43 - 1:32.. just awful dreck.

Scaley needs to breakthrough and crack the buyers at Wal Mart with their high quality, world renowned brand.

My suggestion is a CUSTOM starter set just for Wal Mart, with exclusive CARS. Think NASCAR or American Street (Cameros, Corvettes, Mustangs - think Fast and Furious) or frankly whatever the buyer thinks!

If there is interest good, now to sign the deal...

Wal Mart will want to buy this from Scaley at several points less than cost and the buyer will probably sit there with crossed arms and a disinterested look ready to show Scaley the door as the next Wal Mart vendor want to be lines up....

So if Scaley wants in, and they can get some level of emotional interest, they sure won't make much money at the start, but a Wal Mart deal is KEY!

And if the first set is a success then more will flow and maybe the great US market might be cracked.

p.s. repeat for Toys R Us and Sears!
 

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Beppe Giannini
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Er... , not my area of expertise at all, but ;

- about Scaley's turnover, maybe there's some confusion - Russell's initial quote talks of semesters, Nuro's seems to refer to yearly sales

- the strong Euro - if this were a fair world, most manufacturers should quote in yuans (which are pegged to the $ , latest efforts aside) - OK, tell that to Nike !!

- Wall Mart & C. - what is being suggested amounts to marketing a commodity, which classically means low prices and low quality - not really what we want. But honestly, if 90-95% of sets are one-time purchases, promptly shelved, why shouldn't one buy the battery powered disgraces? Or could it be that our "product" is (a la Inte, partially) "broke" ? [makes quick exit]
 

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Revisiting An Old Thread

This was an interesting discussion at a time Before Scalextric USA if I am not mistaken.

Has Scaley taken the US by storm???
Are Hornby Profits up/down?
Sales up/down?

Myself, when I set out to discover the world of 1/32 I judged all and found All but scalextric wanting.......Oh they all had some positives certainly, but as an overall system (particularly in Digital which was a definite on my want list) Scaley had all the plus's.
Quality was a keyword I found everywhere I looked....Quality Box Stock, Quality Ready to Run, Quality in Form & Function and all that wrapped up in an intriguing technical package.

Scalextric CAN dominate the American Market, but they have yet to show they really want too.(although they have made a few token gestures)
NASCAR is the hottest thing right now since apple pie. The only sport more watched is American Football......(that means america's National Sport which is actually Baseball has been set back a few places)
4 models & the top 10 liveries from the Nextel Cup Shootout would be a real gesture instead of a token IMHO...Instead we get 2 models, 2 liveries........next year we get same models 2 liveries........If you want to draw new blood to slots and dominate the American Slot car market, this aint getting it done!!!

Toyota stated its first year in Nascar .........Scaley should have had the Nascar Toyota ON the shelves on opening Day of the season!!

Rolex Sports cars..........hmmmmmm we probobly dont want to go there!!!(Has Hornby ever heard of Pontiac???)

We may be Ex Colonists, (Thats MR. Ex Colonist to you Wankel) But that would be ex colonists with a much higher disposable income than Most and a serious bent on spending it on expensive toys.......We can afford a 70.00 car, but we have to WANT to afford it.

Carrerra has shown that they Understand and Want the US market...........Scaley with their quality and venue can Have it for the taking......... if they would just put forth some effort.
I hate to say it, but if you want to sell an American and dominate the North American market share, you best be able to think like one!!!( I include Canada here because when it comes to this stuff we do actually think alot alike...Walmarts proven that LOL )

My opinion worth price charged.......

So what is Scaleys US Market Share???? Much higher than 3 years ago I expect!!:)
 
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