Stock shortage hits sales at Hornby
From Logistics Manager Magazine,
Published Wednesday 10 April 2019 12:04 pm
Hornby has warned that its revenue will be lower than last
year owing to a shortage of stock arriving on time and in full in the
first half of the year.
Nevertheless, it said in a trading update for the year to 31st March,
underlying margins had improved and reduction in overheads had
The company, whose brands also include Scalextric, Airfix and Corgi,
has been working to improve the infrastructure in its overseas supply
chain to make it function more efficiently.
The company made an operating loss of £9.9 million in the year to
31st March 2018. In the company’s annual report for the year, chief
executive Lyndon Davies said: “We must guarantee that we get the right
amount of product to the market at the right time and at the right cost.
When this works efficiently we will greatly improve our sales
Davies went on to highlight the problems the company faced: “We have a
lack of new product arriving in the UK and therefore can’t meet the
demand. This is because of two main reasons:
– Order quantities were very low per item because of cash constraints
and a lack of understanding about which designs would sell better than
– Not only were orders placed late, but the vitally important
technical specifications were also supplied late to our manufacturers.
The solution here is to pull forward the planning deadlines by six
months and choose the right manufacturing partners for the long run.
Considering the complexity of our design and ordering cycles it will
take time, but the aim is for the new schedule to be fully operational
and firing on all cylinders for the financial year ending 31 March 2020.
In the 2019 trading update, Hornby said: “Our underlying margins have
improved and the reduction in overheads has continued. The focus on
doing more with less through continued cost-cutting and efficiency
improvements has resulted in a significantly lower underlying Group loss
compared to last year. The loss is in line with the board’s
expectations despite the reduced product availability and lower sales in
the first half of the year.
“This is a real achievement under the circumstances and we are
grateful to our passionate and hardworking staff who are working
tirelessly to get the Group back to profitability.
“As previously explained, we are rebuilding trust with our customers
and suppliers. This takes time, but the initial signs are encouraging as
we move into the first full year where all the new products and
marketing strategies have been designed by the new management team.”