Horizon Hobbies purchases MDC/Roundhouse!

[Anonymous]

Here we go again....

http://www.mdcroundhouse.com/

[:p]


Bob Boudreau
Canada

[Anonymous]

You are kidding me!

At least Horizon is keeping production in the USA.

[cacole]

It seems that Horizon Hobbies is out to control the entire U.S. hobby industry by buying up the manufacturers ....

What next? Lionel?

[Anonymous]

My worry is that the retailers I've been using are small operators most often specializing in trains. The word they've been giving me is that Horizon is cutting their main supplier, Walthers, out of the game with the intent of having that relationship. The difficulty is that Horizon a few months ago wanted $1000 guaranteed worth of sales per month. I understand that it's since has been modified to $500. What I'm left with in my area is Wal*Mart, and two hobby stores that specialize in radio control airplanes or cars. I hope an affordable relationship can be made with these smaller operators.

[decoy706]

Crap ! With the pending loss of Lionel-(due to money)/Athearn -(bought-out)/MDC-(bought-out) whose next Atlas-I hope NOT/Kato-not enough money for that/Life-Like maybe/Bachmann probably high on the list to go next.
Can you say "the begining of a MONOPOLY" in the train market. BTW is Horzion on the UP list ???

[dharmon]

Ugh![V]

[okiechoochoo]

I wonder if Lionel won't be on the list as soon as they come up for sale. Horizon will eventually run Walthers out of business, just choke the life out of them, kind of like Walmart does to small business in the towns they go into. Somehow, I don't think this is really good for the overall health of the hobby.

[NscaleMike]

Well...there goes all those great online/web bargains I used to get from MDC...man o man...I am glad I was able to stock up on a few of them.[:)]

[Anonymous]

Horizon will not run Walthers out of business, but I sincerely hope that the two of them will "enjoy" some friendly competition that may just give us more neat products and at more 'friendly' pricing.

No one panics when Walthers purchases another product line, often due to it having been mismanaged by the prior owner, the prior owner retiring, or for whatever other reason that put it up for sale. . .Sometimes the product line just hangs around as i, until demand falls away and it's allowed to die. Usually, Walthers raises the prices - to see what the market will bear, perhaps? - but never am I aware that they maintined the older price structure, or ever lowered it. . .Nor am I aware of Walthers ever expanding an acquired product line that they own, as opposed to distribute. . .

No one panics over sacred Walthers and their super high-priced catalog items. Yet everyone freaked out over Horizon and their recent acquisition of Athearn, and I can sense the same thing is about to erupt over MDC Roundhouse: the rumor mill is cranking up, and the dooms-dayers are preparing their posts re: greedy corporations and nasty CEOs.

Welcome to corporate America and the free-enterprise system.

To repeat myself - the sky is not falling ! We should be glad that someone stepped up and purchased MDC Roundhouse. I for one, am glad that it wasn't Walthers. The retiring owner and founder of MDC Roundhouse has been at the helm since 1939 and it's time for someone else to bring them into the 21st century.

[IRONROOSTER]

Acquistions are always fraught with apprehension by the customers. And rightly so, will availability be maintained? will prices go up? etc. While not all work out well, remember that most of these are done with intent of maintaining the business. Horizon wants to make money out of this not lose it. I suspect that the line will be maintained, but that business decisions will be based on sales and profit margins. Price increases are a way of life, but hopefully Horizon keeps the concept of reasonable quality at reasonable prices.
Enjoy
Paul

[Anonymous]

One of the problems I have with my LHS is they source from Walthers whenever possible. As a result I frequently go to the manufacturers directly or to online sources. Thus I save on the order of 20-50%. I'd prefer to go through the LHS but I'm not willing to subsidize Walthers to that extent. I wish Horizon well.

[Anonymous]

QUOTE: Originally posted by bill mathewson



To repeat myself - the sky is not falling !

AMEN!

[nslakediv]

I personally will not shop online but will give every HO $ to my LHS, they make pennies per dollar invested. We need to support them any way possible or we all will be shopping online.

[Anonymous]

QUOTE: Originally posted by decoy706

Crap ! With the pending loss of Lionel-(due to money)/Athearn -(bought-out)/MDC-(bought-out) whose next Atlas-I hope NOT/Kato-not enough money for that/Life-Like maybe/Bachmann probably high on the list to go next.
Can you say "the begining of a MONOPOLY" in the train market. BTW is Horzion on the UP list ???

Also possible buyouts - Stewart and Accrurail.
Hopefully not Branchline - if so, I hope Atlas buys them!

[michealfarley]

In an indirect way, does this one actually benefit the LHS? Here's a bit of economics.......

Before MDC sale, LHS must order $x/month to keep up status. After MDC sale, LHS must still order $x/month to keep up status, but now has more inventory to order from. Easier to order up to the $x/month bar?

[piinob]

It seems all the affordable Rolling Stock manufacturers are being bought up by horizon. Can price increases be far behind? Okay, inflation takes it's toll on the hobby supplier like every one else. Still, the lack of diversity in ownership, will remove competitive pressures, and likely decrease the variety of products available. MDC has long been one of my favorite lines because of the "not quite mainstream" variety of their offerings. Horizon seems to have a lot of resources available to continue this, but I wonder if they will..... I think it best that the enthusiasts remain the primary source of hobby supplies.

[okiechoochoo]

We will probably wind up with only two distributors, Walthers and Horizon. I guess that is ok as long as the product is available.

[Anonymous]

Bill said it best. The sky is not falling. If anything, this is a good thing and it makes sense. The guy from MDC wants to retire (I envy him and am happy for him) so he sells his business. He sells it to somebody (Athearn) who is already not only very familiar with the business, in general, but also with his particular business and it's to somebody he knows well because they have been friendly competitors for decades (I'll bet he was even a friend of Irv) and are actually fairly close to each other even geographically. They both serviced the same markets (MDC being a lot like the Athearn Blue Box line) so it's a great fit for Athearn. It also indicates that maybe not only is Athearn not going to kill off the blue box line that some have been predicting now for 3 years (yet they still keep on making them and even have a production shedule posted through Dec of this year), but have now just expanded it by acquiring MDC.

This is actually a good thing for the MDC line because it has never really been a big player. Most LHS's I've been to only carry only a few MDC cars - usually a very small fraction of their overall offerings. Even on the Walthers website, MDC is really very minor in the overall offerings. So now that the MDC line can be offered by a major player, how does that hurt them? It can only help. If you suggest that Athearn is just buying MDC just to bury them, I suggest that you look at what they did with the RPP products. More RPP cars are more readily available than ever before. So, that logic does not follow. Besides, why would Athearn waste the money to do that? If anything, Walthers might have done that, if they had acquired MDC. I can't see Walthers making the MDC line (they're sourcing most everything offshore), though I could see them buying it just to keep it out of Athearn's hands. Personally, I don't think Walthers would have even been interested in purchasing MDC. Horizon's Athearn acquiring them is not going to hurt Walthers by taking the current minimal volumes from them. It may hurt them in the future if Athearn really expands the MDC volumes. If you're an MDC fan, this deal is actually probably the best thing that could have happened. The product line could have just disappeared.

I don't mean to be denigrating the MDC products. Hardly. I like them a lot, but like their presence in the LHS's, they make up a very small percentage of my rollingstock fleet (and none of the loco fleet) if only because they are not really readily available in the LHS's. While I do a bit of mailorder buying, the MDC and Blue box items aren't the type of thing I do mailordering of. They have to be at the LHS or I don't buy. Maybe now I'll be able to get more of the MDC at my LHS's.

Enjoy the hobby.

Greg

[Anonymous]

Keeping production in the US? Where do you think all the Atherizon RTR and Genesis are coming from? California? [Excuse me while my giggling subsides] That stuff is all done in CHINA. If the headquarters moves a few blocks, what difference does that make?

Your Local Hobby Shop will get whatever Horizon lets them get, at whatever price they choose to set, because THERE NO LONGER IS ANY COMPETITION.

So far, there has not been anywhere enough backlash. So, we'll keep getting skewered until there is. All Hail Horizon, our new overlords! Learn to love them,'cause there ain't any other choice.

[Anonymous]

QUOTE: Originally posted by SWchief

I like them a lot, but like their presence in the LHS's, they make up a very small percentage of my rollingstock fleet (and none of the loco fleet) if only because they are not really readily available in the LHS's.

I agree. All of my MDC cars were bought at hobby shops outside my local area (more than 25 miles away) because my LHS simply did not stock more than ten kits at a time. A quick glance through the Walther's catalog leads me to believe there isn't much overlap between what Athearn and MDC makes, aside from boxcars. If this means more bathtub gondolas and 2-bay covered hoppers out there for me to wish I had the money to buy, then I'm all for it.

[darth9x9]

As Bill Mathewson said earlier, "Horizon will not run Walthers out of business..." Walthers doesn't make that much from piece mealing Athearn and MDC products to LHSs. Walthers has two sides - a distributor and a manufacturer. The manufacturer has done well with the rolling stock and structures they have released over the years.

It will be interesting to see what Horizon does with MDC. We are all stilling waiting to see the outcome of them procurring Athearn. I have seen nothing bad so far......(unless I was asleep and missed something).

[Don Gibson]

QUOTE: Originally posted by fleetwoodmac
Your Local Hobby Shop will get whatever Horizon lets them get, at whatever price they choose to set because THERE NO LONGER IS ANY COMPETITION.

So far, there has not been anywhere enough backlash. So, we'll keep getting skewered until there is. All Hail Horizon, our new overlords! Learn to love them,'cause there ain't any other choice.

...and just where do you think Horizon's competition is coming from? California??

Horizon's aquiring Athearn / RPP and MDC is small potatoes compared to the lines Walthers has aquired (and kept alive) over the years... WALTHERS is the biggest supplier/distributor to your LHShops, and WHO do you think set's it's prices? the LHS' ? If Horizon decides to get rid of the 'Whores' that's their business. You can shop wherever you like.

LHShops will buy from wherever they choose (and can get credit.) So can you. They ALWAYS HAVE ... and I'm sure you have, too.

[jsanchez]

I think this will force some of the other distributors to buy manufacturers, (Walthers, Great Planes, Portman). I bet target number 1is Atlas, then maybe Life-Like or Model Power. Kato and Bachmann are both foreign owned so I do not think take over is a problem. Walther's will have to take over a major player or two now to survive in the long run. They also need to expand into N scale more, which MDC and Athearn are doing. I'm surprised Horizon bought another company, before the Union Pacific case was settled. Union Pacific might wind up owning Horizon before all is said and done.

[Anonymous]

Long live Atlas and Kato!

Matt

[Anonymous]

I won't worry until Branchline, Life-Like or Atlas gets bought. There's precious little MDC or Athearn on my layout(I'm over 60% Branchline for stock, and Resin Kits will soon outnumber Athearn and MDC collectively in my roster) .

[jsanchez]

What is most upsetting to me is this will hurt many of the smaller distributors, I think you are going to see some of them start to go out of business by the end of the year. MDC is not a great seller in its own right, but combined with the loss of Athearn it will be too much of a loss for some distributors.

[jsanchez]

Branchline is already owned by a distributor called "Hobby store Distributing" they are very easy to work with, that is why many dealers carry their product line.

QUOTE: Originally posted by mykroft

I won't worry until Branchline, Life-Like or Atlas gets bought. There's precious little MDC or Athearn on my layout(I'm over 60% Branchline for stock, and Resin Kits will soon outnumber Athearn and MDC collectively in my roster) .

[Anonymous]

Walthers will not be run out of business by Horizon. Especially with the dated equipment offered by MDC. They haven't offered a "new" car in years. ..Just reruns of their older molding. Horizon's "stranglehold" on the market exists considerably with regards to their now-owned companies.

They dictate who and how much they ship out to their LHS owners. I am thankful for Ebay and other internet sites, as it allows me to continue to get the Genesis cars that I want, and to stay away from Horizon's business end. I acknowledge the fact that the cars I bought may have come from them, but I do not have to deal directly with them.

I will also continue to patronize Walthers, as they are first rate.

[Noah Hofrichter]

I hope every thing works out from this deal, I'm not really all that happy with it, but I'll learn to live with it. I hope they become like walthers in someways though, as that way we, the consumer can order things all at once from several different manufactures, it would be kind of nice really. I just hope the prices don't go sky high on us, instead of falling, but I don't think, I hope, that won't happen.

Noah

[jsanchez]

If Horizon gobbles up a couple more big model train companies(Atlas, LIonel, Life-like) there will be problems for Walther's and all the other distributors. I know Great Planes Distributors is itching to buy a manufacturer so we might wind up with three big players in the train business. Horizon is also trying to be the biggest player in the model train business at Walther's expense. Personally I like Walthers a lot and give them a lot of business, so I hope they remain the biggest train distributor. They do still carry far more lines than Horizon.

QUOTE: Originally posted by JoppaSub

Walthers will not be run out of business by Horizon. Especially with the dated equipment offered by MDC. They haven't offered a "new" car in years. ..Just reruns of their older molding. Horizon's "stranglehold" on the market exists considerably with regards to their now-owned companies.

They dictate who and how much they ship out to their LHS owners. I am thankful for Ebay and other internet sites, as it allows me to continue to get the Genesis cars that I want, and to stay away from Horizon's business end. I acknowledge the fact that the cars I bought may have come from them, but I do not have to deal directly with them.

I will also continue to patronize Walthers, as they are first rate.