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Eric Aitala

Hobbico files for bankruptcy...

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It would not surprise me if "Licensing fees" are a significant part of the debt situation, with profits sucked out of the company for every image and logo used on the products. Once upon a time, those logos and images were sought by their owners to be on products as a form of free advertising. Now it is considered a source of revenue by those owners. So, kill the goose that lays the golden eggs. So sad that greed is so pervasive.

 

Ed

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Hobbico's debt came, in part, from a patent infringement lawsuit--one of their subsidiaries, ARRMA (a manufacturer of RC cars), was sued by Traxxas (probably the premier manufacturer of entry- and intermediate level RC cars and trucks).

 

https://www.scribd.com/document/320063741/Traxxas-v-Hobbico-Amended-Complaint

 

Hobbico filing Chapter 11 is a surprise only in that it hadn't happened earlier. When I worked at the local hobby shop, we were taking bets that it would happen as early as 2016...

 

Ralph

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Perhaps this will be good news in the long run, if Revell is bought by someone who sees the hobby as the main point of being in business.

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Just checked the internet for the latest on Hobbico.  Horizon did buy all the RC assets, which is not really being met with a lot of joy.  A substantial number of the Hobbico employees will be out in the cold, those who do catch on with Horizon will have lower paying jobs and mostly in the warehouse.  Worse, those who have retired will find themselves with no retirement income.  And one more thing: Horizon was the ONLY bidder in the 'auction', which does not bode well for Revell.

Also, the Revell US and Revell Germany auction had been suspended but is now occurring today.  Cross your fingers because, given the recent developments in the Hobbico bankruptcy, there's no telling what will happen with Revell/Monogram and Revell Germany.  Worse, since Horizon was the only bidder for the RC part of the business, you have to wonder what happens if there are no bidders for Revell.  Or if some third rate holding company picks them up for a song with no intention of keeping them going as a producer of quality model kits.

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The latest news has a group of investors, thought to be related to Revell GmbH management, buying both Revell GmbH and Revell USA. On Friday, Bert Kinzey made a post in the Detail and Scale Facebook page that said, in effect, that Revell USA has been shut down completely.  Supposition has it that all future design will be overseen by the group in Germany.  Molds will continue to be cut in either Korea or the PRC.  Molding may be done in the PRC or Poland (most Revell GmbH kits are molded in Poland, most Revell-Monogram kits were molded in China).  They will need to find a U.S. distributor, since that went away with the closure of the Revell USA offices.

Nothing has been said about Hasegawa and Italeri--Hobbico was the sole U.S. distributor for both.  I imagine both companies have feelers out for a new distributor here in the states.

Lastly, Estes was bought by a group in Colorado.

Parties close to the subject say that while the Hobbico acquisition wasn't the best thing to happen to Revell USA, the problems began years before that--some say Revell's problems began even before the merger of Revell and Monogram in the mid-1980's.

Still early days yet.  It will be interesting to see how this all unravels.

Cheers!
Ralph

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The collateral damage will go a lot farther than most of us suspect.  I had several how-to ebooks planned that would have focused on the higher quality Monogram kits (along with aftermarket components to make them even better).  Now I'm left wondering if it's worth the time and effort required to produce them.  At the same time I have to wonder if it's worth the time and effort to produce ebooks on current, expensive, kits and which ones.

If nothing else, the Hobbico bankruptcy and the various factors that led to it is evidence of the current business trend:  Mergers and/or acquisitions are based on nothing more than the bottom line and how many units of a particular product is sold in a specific time frame.  Testors is a classic example of what I mean.  Many of the colors were dropped for that very reason.  Consider that I'm pulling numbers out of a hat since I don't know the real ones, but it's being done for illustrative purposes.  If a company...who knows nothing about a hobby business beyond dollars and cents...estimates that a specific bottle of paint should sell125 bottles in a month an it only sells 112 bottles in the same time period, it won't be many months before that color is dropped for "lack of marketplace interest".

Makes you wonder who the next model company will be to go belly up, doesn't it?

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Does anyone know why Hobbycraft went out of business?  I know the models were not that that good, except for a few.  Some I would buy, open the kit box and the kit looked terrible and into the trash bin the kit went. 

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Jim, I think you've mistaken HOBBICO, a multi-national and multi hobby company OWNER (owned Revell GER, Revell/Monogram USA, Estes rockets, etc.) for the Hobbycraft plastic model company. To my knowledge, Hobbycraft is still in business and wasn't a part of the break up and sale of all of the interests owned by Hobbico.

Others can correct me if I missed that Hobbycraft was involved, as to my knowledge, it's still plodding on as usual, good kits, not so good kits, and all.

 

GIL :cool:

 

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3 hours ago, ghodges said:

Jim, I think you've mistaken HOBBICO, a multi-national and multi hobby company OWNER (owned Revell GER, Revell/Monogram USA, Estes rockets, etc.) for the Hobbycraft plastic model company. To my knowledge, Hobbycraft is still in business and wasn't a part of the break up and sale of all of the interests owned by Hobbico.

Others can correct me if I missed that Hobbycraft was involved, as to my knowledge, it's still plodding on as usual, good kits, not so good kits, and all.

 

GIL :cool:

 

Gil, You are correct.  Hobbycraft is still producing model kits in Canada.  I thought they went out of business because Academy is selling the Hobbycraft T-33(it must just be a rebox,  I thought the molds were bought by Academy because Hobbycraft went out of business).  Thanks for setting me straight on this.

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No problemo....The way people trade molds today it's really a Godsend to have the internet so we can find out whose plastic is in what box before we buy it! And with the Hobbico sale, who knows what type of box the Revell and Monogram molds will come back to us in the future?

 

GIL :cool:

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The latest, from Kalmbach (Scale Auto magazine, to be exact).  Note that this was derived from court documents and not direct discussion with the new owners:

http://www.scaleautomag.com/articles/2018/04/revell-has-been-sold

So there are some answers--the new owners basically bought the whole wad--molds, trademarks, etc.

The questions that remain:

1. Despite owning the molds, will the new owners reissue legacy kits?  (My opinion--yes to some, no to others.)

2. Who will distribute Revell GmbH kits in the States?

3. Ditto Hasegawa and Italeri kits.

Again, this is early days, a lot remains to be seen.

Ralph

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Last night I stumbled across a thread in a British website that has...so far...devoted nine pages to the ongoing saga of the Hobbico bankruptcy.  The buyers of Revell...both US and Germany, are a Venture Capital Investment Group headquartered in Munich, Germany.  As far as is known at this time, the Revell Germany management will remain in place with the goal of Revell Germany eventually be returned to profitability.  Those of you who know anything about venture capital groups understand that this can be either good or bad, with the odds favoring the bad side.  In any event, there is no way to know at this time...though that could change at a moment's notice...what will happen to all the Revell U.S. and Monogram molds.  They could be scrapped, sold to various toy manufacturers, allowed to simply rust in place or whatever.

At the moment, if you don't have enough Revell kits in your stash or are missing certain ones that you planned on eventually buying, buy them now if you can find them still on the shelves.  Otherwise it's going to be ebay or other secondary marketplaces at an elevated price.

Edited by ipmsusa2

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Here is the latest info about the sale of Revell.  First, an entire ten page thread, starting with the bankruptcy announcement and ending a couple of hours ago, can be found on the Britmodeler.com website.  Go here to read the entire thread.  Page 10 will have the latest info.

Secondly, there is a post on Militarymodelling.com that features an official announcement direct from Revell.  You can read that here.  It also identifies the venture capital company by it's real name, which is Quantum Capital Partners, headquartered in Munich, Germany.

Hope some of this helps.

Edited by ipmsusa2

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I worry about the venture capital bit...  Toys R Us was bought out that way back in 2005.  And then ended up with $5 Billion in debt. 

As I understand it, sometimes these buyouts are a method of transferring debt from one asset to another - although that may not have been the case with Toys R Us.

Anyway...

Eric

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I understand your fears. Regardless of how it turns out, there are two things certain.  IF Revell survives and even thrives, prices will go up, probably substantially, and most of the really good Revell and/or Monogram kits will become difficult to impossible to find except at collector prices.  For example the 1/48 Ju-42 and C-47.  And how about the 1/48 F-105 which, despite its age is still the best 48th F-105 around and is (was) still to found at a reasonable price at Hobby Lobby.

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I could see there demise. As most of their kits have been repalced by newer releases but others, they sell less. There Tomcat is Ok but not nearly Hobbyboss or Tamiya or AMK's forthcoming kit. And resissuing the old when most of us have the kit or there is a better kit won't cut it. I see there P-61 is back out....GWH is better by miles

 

Dave

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And this is why I don't understand Tamiya.  Instead of making a really good kit that requires no aftermarket or scratchbuilding  they make mediocre kits and model builders still pay top dollar for them.  Even when these are Maxpeerless/Italeri molds sold under the Tamiya name.  It just boggles my mind.    

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Consider this: It makes more sense to produce a decent quality model...such as the Monogram B-26 Marauder, Ju-52, C-47 & F-105...that can be sold for a decent price and may well bring new modelers into the hobby, instead of a state-of-the-art (and then some) that sells for $75 to $300 that no one except advanced or expert modelers will go near.  After all, if we want to build something to an advanced level, the aftermarket gives us everything we need.  At the rate we're going with kit prices, we're cutting our own throats.

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I did consider it. The reason model companies have produced these expensive, multi option, state of the art models is US, the dedicated modelers that whine, criticize and complain about every rivet, issue, panel and the like. This has driven costs up and modelers out (so we defintely agree on that). As for Italeri being distributed by Tamiya, that's a distribution agreement .

 

Dave

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Dave, when it comes to Italeri having a distribution agreement with Tamiya, Italeri had an earlier distribution agreement with Testors.  At that point in time, I had had a long term relationship with Testors and Testors was not owned by Rustoleoum.  For reasons I never learned, some kind of disagreement resulted in Testors severing their relationship with Italeri (or vice versa).  Since that event, it's been all downhill for Testors, as least as far as we modelbuilders are concerned.

BTW, another effect of the increased cost of model kits is the decreased commission builds that I obtain, in turn reducing my income and switching my focus to how-to ebooks and CD-ROM photo galleries.  I agree that we've done it to ourselves and suggest if we don't find a way to reverse the trend that we will be the cause of our own demise.  While that sounds negative, there is a practical limit to how much any of us can afford to pay for a single kit without having to keep our bank's loan officer on speed dial.

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Interesting information; Testors/Italeri kits from the 1980s were the first "high quality" kits I ran across. Their instruction sheets were top notch. I still have quite a few and if I am constructing an Italeri kit that I once built as a Testors kit, I'll use the Testors instructions instead.

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