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News :: Economy |
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Horizon Hobby Buys Athearn: Local Biz Becomes Major Player in Model Railroading |
Current rating: 3 |
by ML
(No verified email address) |
05 Jan 2004
Modified: 06 Jan 2004 |
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Horizon Hobbies, a large Champaign-based distributor of hobby items such as RC cars and planes, has gone back to the future by purchasing Athearn, one of the largest model railroad motive power and rolling stock manufacturers. |
Horizon Hobbies, a large Champaign-based distributor of hobby items such as RC cars and planes, has gone back to the future by purchasing Athearn, one of the world's largest model railroad motive power and rolling stock manufacturers.
Athearn's roots reach back more than 50 years, to the heyday of model trains. Although the company had been regarded as moribund in the field for its oftimes rather pedestrian lineup, it has made substantial efforts to upgrade its offerings to keep up with increasing consumer demand for pre-assembled railroad models with a high level of detail. Among the most successful was the recent introduction of its Genesis line of high-end, highly detailed HO railroad models, sparking substantial growth in the company's reputation and revenues.
Athearn's Genesis locomotives are now sought after by both collectors and ordinary model railroaders who enjoy their combination of detail and excellent running qualities. The Genesis line includes diesels from the 1950s along with current production models from EMD (including models of those currently operating along the IC/CN line through Champaign which just now clebrated its 150th anniversary.) Several Genesis steam locos were recently added, along with a line-up of modern freight cars. The models come ready-to-run, at a premium price that reflects the painstaking detail that goes into their construction.
What this means for Horizon's local operations is unclear. Athearn's headquarters are in California, although increasing amounts of its production work have been shifted overseas to places such as the People's Republic of China. Horizon is one of a number of distribution companies which employ thousands of local workers in Champaign County. The author's own experience (23+ years) in this line of work is with other local companies who ship heavier goods such as auto parts and groceries, but I can make no specific comments on working at Horizon other than to note that it does employ several hundred workers at its Champaign headquaters and production facilities.
Here are some more info links:
Athearn
http://www.athearn.com/
ModelRailroader.com announcement
http://www.trains.com/Content/Dynamic/Articles/000/000/004/815lgeym.asp
ModelRailroader.com discussion group message in which this is being discussed (may require free registration)
http://www.trains.com/community/forum/topic.asp?TOPIC_ID=10597
Another MR thread:
http://www.trains.com/community/forum/topic.asp?TOPIC_ID=10616
Horizon Hobbies
http://www.horizonhobby.com/
Disclaimer: The author has been a model railroader for 33 years. He is a satisfied customer of Athearn, with no other connection to either it or Horizon, who hopes that this deal results in more good models for model railroaders and good jobs for those who construct and distribute the models, whichever country they work in. |
This work is in the public domain |
Comments
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Re: Horizon Hobby Buys Athearn: Local Biz Becomes Major Player in Model Railroading |
by .
(No verified email address) |
Current rating: 0
08 Jan 2004
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Thanks for the post, ML!
That company has some seriously weird/dysfunctional internal politics.
Just heard from a previous employee (over the '03/'04 holidays, at a party) that the owners are religious zealots. S/he did NOT enjoy his/her "experience" there.
Now it's starting to make a little more sense. They also seem to be constantly hiring in the Snooze-Gazoo, and for often the same positions, which means turnover is high, which means...
I was considering responding to an ad' a few years ago, but got "bad vibes". Seems like my hunch was accurate. Had researched one of the managers, just blind google'ing the name, which is unique.
Came up with a bunch of really nasty/heated "pro-life" "arguments" in newsgroup postings. The manager-person was as maddeningly zealous as they come, and the "debates" had gone on for many months, as indicated by all the groups.google archive listings. Saving-babies-for-Jesus on company-time, no doubt.
Had also heard about that same manager from another ex-employee, who said the manager was a real jerk. So I asked how that manager managed, to stay employed, and my source said that the manager was "in tight" with the owners.
Ah ha! Crystal clear. All the pieces are coming together now, just took some time. |
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Serial Job Offers |
by ML
(No verified email address) |
Current rating: 0
08 Jan 2004
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I've wondered before about why Horizon seems to have the same jobs in the paper again and again. .'s explanation could certainly account for that.
I only hope that the workers in China, where Athearn is moving more and more of their production, are being treated fairly. A investigation of working cnditions in these factories would certainly be desirable, given China's poor record on labor rights. |
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Re: Horizon Hobby Buys Athearn: Local Biz Becomes Major Player in Model Railroading |
by via ML
(No verified email address) |
Current rating: 3
11 Jan 2004
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Found on the HOn3 list:
"Unfortunately, this has significant impact. Horizon has chosen to be the
sole distributor of Athearn. Beginning March 1, 2004, they will stop selling
to other distributors. Horizon requires that all of their dealers have a
storefront operation, so the dealer I buy from will not be allowed to buy Athearn products. He offers an internet 'storefront' with a much wider selection than most hobby stores. I think it's a mistake for Horizon to do
this.
"Horizon does have a comment form on their website:
http://horizon.hobbyshopnow.com/support/listen.asp?tag=ft
"It certainly can't hurt for them to know how their end customers feel!"
Mike
HOn3 list web pages are:
http://www.railwayeng.com/hon3/
http://groups.yahoo.com/archive/Hon3/
http://groups.yahoo.com/files/HOn3/
Further comment from ML:
Model railroaders have struggled along with limited offerings from local hobby shops for years, despite the presence of such wholesalers like Horizon. I'm uncertain whether this idea of restricting the distribution of Athearn to storefront operations will really help. It will certainly not help many local model railroaders who have begun to depend on the internet to satisfy our needs.
The area does have a great RR show at the Lincoln Square Mall in Urbana at the end of March/beginning of April every year, thanks to the work of Fred Schlipf of the Urbana Free Library. The other 51 weeks of the year, model railroaders have to look outside of local vendors, who stock little and generally have had rather poor records of following up on orders.
This is not entirely the hobby shops' fault, as model railroaders often have rather specific desires for products based on modeling specific prototypes. But it also means that hobby shops have to offer excellent service that caters to these special requirements if they hope to compete with motivated, specialized retailers using the internet. If Horizon follows through with this policy, it is unlikely to change the realities of hobby shops needing to offer great service and reasonable pricing, while likely driving up prices to consumers. |
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Horizon's Hypocrisy in Saying They're Helping Local Hobby Shops |
by via ML
(No verified email address) |
Current rating: 3
13 Jan 2004
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Some more from the HOn3 list, which seems to demonstrate that what Horizon wants to do is not help local hobby shops, but force them to compete with Horizon for mail order/internet customers.
From the HOn3 list:
While this might make you and others feel better, (venting steam) don't be
surprised if it falls on deaf ears. Both Horizon and Great Planes are in a
'to-the-death' fight to see who will be the RULER of the hobby industry.
For years both have locked horns trying to either buy up or obtain exclusive
rights to sell a given brand. Up until now their focus has been mostly in
the cut-throat R/C market. (radio control cars, planes, boats etc.) It now
appears they are going to go after the model railroading market. Be assured
Great Planes will find a 'big' fish in model railroading and go after them.
MDC, Life-Like, Atlas the choices are many. If I owned a company looking to
stay independent from these BIG distributors, I'd pray they never come
knocking at my door. They don't always play fair.
MJ also wrote: Horizon requires that all of their dealers have a
storefront operation, so the dealer I buy from will not be allowed to buy
Athearn products. He offers an internet 'storefront' with a much wider
selection than most hobby stores.
The old line given was we (the distributor) want to PROTECT our brick and
mortar shops. They still use that excuse but it is far from the truth.
Both Horizon and Great Planes have a very strong internet/mail order
business. They would much rather sell to a customer direct than to a hobby
shop. Their profit margin is much better. Ask any hobby shop owner if they
'like' competing with the very distributor they are forced to buy from and
they'll say no.
Many of the smaller distributors have gone out of business because they
simply can't compete with the likes of Horizon and G.P. These big
distributors are also putting many of the very hobby shops they claim they
want to protect out of business.
Case in point:
A customer buys an R/C airplane in the local hobby shop. If the plane was
sold at full retail the shop might see a 40% profit. When the customer joins
AMA (mandatory for all flying fields) their name if automatically put on
Tower Hobbies (Great Planes mail order business) mailing list. If the hobby
shop wants to keep said customer they are often forced to sell items at
Tower's price. In many cases that means a 10% profit. Try to keep your
doors open with that kind of margin.
Even though I've been away from it for over two years, I was in the hobby
retail business for fifteen + years so I know the horrors these big
distributors can cause. Our hobby of model railroading will only suffer as
the big guys tighten their grip.
Off to do some modeling,
[another] Michael |
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Re: Horizon Hobby Buys Athearn: Local Biz Becomes Major Player in Model Railroading |
by Crewdog
zzyzx (nospam) quixnet.net (unverified) |
Current rating: 3
18 Jan 2004
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This buyout can be bad and good. The bad part is an excessive concentration of power. My Dodge dealer does not have to compete with the Daimler-Chrysler factory for car sales, only with other Dodge dealers. Is it fair to the hobby shop owners that their suppliers are competing against them, and underselling them? Isn't there some kind of conflict of interest here?
The good news is that this might help keep the retail hobby shops in business. We all like to be able to touch and feel things before we buy, but too many people look at it an item in the hobby shop, and then go buy it on-line. How can the hobby shop stay in business if the customers buy the profitable items on-line, and then only buy nit-noy items like glue and couplers in the store? People around here moan and groan about the declining number of hobby stores in the area, but they still buy on-line: they want to have their cake and eat it, too. Maybe if they'd shel out a couple more bucks for an item, the hobby store could afford to stay open.
People who gripe about the limited product availability at brick and mortar stores should shop around. We have a relatively new hobby store in town, and they special-order stuff for the customers all the time. They sometimes run into difficulties when limited-run items are all sold out at the distributors. Part of the reason for that could be because they're being snatched up by hordes of basement-based wholesale buying clubs masquerading as legitimate hobby shops. Maybe the shaking out that is sure to follow will be more like house cleaning and less like cattle rustling. |
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C-U Could Use a Good Hobby Shop |
by ML
(No verified email address) |
Current rating: 2
18 Jan 2004
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Crewdog,
All good comments. I was just going to note that one can probably judge the success of Horizon's strategy by evaluating hobby shops right here in Urbana and Champaign. I really don't want to diss on the several places that do sell model railroading supplies, as getting the bare basics in front of people does help grow the hobby, even if it doesn't satisfy advanced modelers.
I've used them all (except for those that specialize in Lionel, which I don't do) at one time or another in the nearly three decades I've lived in the area. The quality over the years has varied, but was in pretty sad shape the last time I looked several years ago. Since then, I've done business with Hammer's Hobbies in Decatur (a really great shop for service -- I hope they're stioll around) and on the internet. None of the local shops has ever made the consistent effort it takes to get and hold the business of hard-core model railroaders away from first, mail-order, and now the ever-more-seductive internet.
There has to be selection, a reasonable discount (full-price just won't succeed as a business model anymore), and service for those items which must be ordered because they are too specialized to stock. You didn't specify whether you're from the local area or not when you mentioned a new hobby shop opening, but if you know of a new one in C-U, go ahead and post the info for everyone's benefit.
BTW, for those who want one last, local crack at pre-Horizon Athearn models and pricing, the annual Lincoln Square Railroad Show is scheduled for March 27 and 28. Many of the dealers that attend this show will no longer be able to get Athearn because of Horizon's restrictive marketing and will be drawing down their stock of this brand. Whether that will help a good local hobby stock to exist, stocking model railroading goods, is an unanswered question. However, it may just lead to less of a selection available locally because Horizon's move may impact some dealers' ability to stay in business and attend future Lincoln Square RR shows. |
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