Walthers purchases assets of Life-Like Products Toy and Hobby Division; Roco declares bankruptcy

[prospekt mira]

QUOTE: Originally posted by ericboone

QUOTE: Originally posted by trolleyboy

This will likley be bad news for canadian modellers. LL licensed distribution to Canadian paint schemes and Canadian prototype locomotives to Hobbycraft Canada.With the aquisition all these models will be gone.It was good to get canadian specific locomotives with proper detail parts without having to go the brass route. Indeed a sad day. Rob

Why wouldn't Walthers simply distrubute these to Canada or does Canada have some law stating that only Canadian companies can sell model trains with Canadian paint schemes? If my assumption is true, couldn't Walthers set up a similar Canadian division or maybe Canada could get rid of the silly law, again, if my assumption is true.

What law?
Its simply that this segment of the market is quite small. The more unusual Canadia schemes (TH&B, ONR) wouldn't sell enough units to attract one of the US players, so a niche market has developed. One that may not interest Walthers any more.

[3railguy]

I seriously doubt Kato or Atlas will be caught up in any sort of merger any time in the near future. Both are strong, innovative companies with a good foothold in the market place.

[Anonymous]

Hi you all,

The following letter was post last night, on the Atlas N scale forum by andrejonc.


July 16th 2005

To Phil Walthers

Dear Sir,

When your grand father started his business in 1932, I was only six years old. Two years before on a Christmas morning, I saw my first tinplate train that Santa Claus had left for my older brother. It was a Lionel with a Green colored locomotive, and between 1935 to the early 40’s my mother and I had never miss the Santa Claus parade from the Eaton store here in Montreal.

In 1975, a new product sold in the USA by Revell under the name of The Postage Stamp Collection interested me, now you have guest I presume that I am in N scale. I belong to the Atlas forum and last night I came upon a posting in regards with your last acquisition. In your press release, the first paragraph reads as follow, Exciting News from Walthers! For me, it was Bad News for all of us in N scale.

Before writing this message, I went to your web site to browse your N scale products, if Walthers wants to be honest with us, and he has to keep Life Like well-known brands as follow: the PROTO 1000 series, the PROTO 2000 series and the HERITAGE steams collection series.

May I make a suggestion; you should get in touch with Paul Graf from Atlas and make some agreements with him to post a note of encouragement for the thousands N scale modeler across North America.

I remain yours truly,

Andre Joncas

[ericboone]

QUOTE: Originally posted by trolleyboy

This will likley be bad news for canadian modellers. LL licensed distribution to Canadian paint schemes and Canadian prototype locomotives to Hobbycraft Canada.With the aquisition all these models will be gone.It was good to get canadian specific locomotives with proper detail parts without having to go the brass route. Indeed a sad day. Rob

Why wouldn't Walthers simply distrubute these to Canada or does Canada have some law stating that only Canadian companies can sell model trains with Canadian paint schemes? If my assumption is true, couldn't Walthers set up a similar Canadian division or maybe Canada could get rid of the silly law, again, if my assumption is true.

[Roadtrp]

QUOTE: Originally posted by HighIron2003ar

I disagree. They lost in two seperate fires earlier this year if memory serves.

Kind of makes you wonder if the warehouse fires were entirely accidental. Sometimes insurance proceeds look better than a marginally profitable business.

[}:)]

As for the future, I have to be optimistic. Walthers is clearly committed to the hobby, and will do what it takes to keep the market healthy.

[:)]

[trolleyboy]

This will likley be bad news for canadian modellers. LL licensed distribution to Canadian paint schemes and Canadian prototype locomotives to Hobbycraft Canada.With the aquisition all these models will be gone.It was good to get canadian specific locomotives with proper detail parts without having to go the brass route. Indeed a sad day. Rob

[BRAKIE]

QUOTE: Originally posted by mthrules

Lifelike was nothing but junk so if Walthers can improve the line, then more power to them. There's been rumors about MTH acquiring a small scale company but I don't think they considered Lifelike.

About the only thing I found to be junk on the P2K line of GP7/9/30s was their crapola gears.
And that friends is why I no longer buy LL and have sold 90% of my P2Ks off.

[simon1966]

QUOTE: Originally posted by mthrules

Lifelike was nothing but junk so if Walthers can improve the line, then more power to them. There's been rumors about MTH acquiring a small scale company but I don't think they considered Lifelike.

[zzz][zzz][zzz][zzz]

[Anonymous]

Lifelike was nothing but junk so if Walthers can improve the line, then more power to them. There's been rumors about MTH acquiring a small scale company but I don't think they considered Lifelike.

[bcammack]

I'm sure that Walthers is not only diversifying into HO slot car sets, but are also protecting themselves against losing further product lines such as the loss of MDC and Athern to Horizon. I got the impression that they were also going to be the exclusive distributors of the Life-Like product lines, which is fairly reasonable as owners and distributors of them. Why give up profit?

It may be enjoyable to couch it as a tit-for-tat response to Horizon, but it appears to me to simply be a shrewd business move on Walther's part.

[Anonymous]

Walthers did not make any statements indicating that LifeLike products would be sold exclusively by Walthers. If this is the case, then thing will be business as usual.

The owner of my LHS does not like the idea of exclusive product lines. He wants to be able to do business with several distributors. He thinks that use of broad distribution channels keeps everyone honest. Distributors can't jack up prices as easily.

[simon1966]

QUOTE: Originally posted by JPowell

QUOTE: Originally posted by cnwfan11

QUOTE: Originally posted by simon1966

How much more available can they be? The products from LifeLike are already prominent in the Walthers catalog and the lower end trainsets are already at Walmart and Toys R us.

Funny,since WHEN did these 2 stores EVER carry LifeLike? BOTH dont carry a [censored]thing for model railroaders!!

CNWFAN - Hate to burst your bubble, but here in upstate NY, they both carry the low end of the LL trainsets. Toys -r-Us has it more often than Wal-mart (usually at X-mas for Wally World).
JP

To be fair to CNWFAN, my local Toys R us does carry low end LifeLike and our Walmart certainly did have trainsets at Xmas. However, I would agree that they don't carry anything for MRR [:D]

[JPowell]

QUOTE: Originally posted by cnwfan11

QUOTE: Originally posted by simon1966

How much more available can they be? The products from LifeLike are already prominent in the Walthers catalog and the lower end trainsets are already at Walmart and Toys R us.

Funny,since WHEN did these 2 stores EVER carry LifeLike? BOTH dont carry a [censored]thing for model railroaders!!

CNWFAN - Hate to burst your bubble, but here in upstate NY, they both carry the low end of the LL trainsets. Toys -r-Us has it more often than Wal-mart (usually at X-mas for Wally World).
JP

[Sunset Limited]

Billy s grandson,
Glad to hear that your Grand Pa's future in his hobby shop will be a little easier with this aquisition. I seen alot of hobby shops come and go! If he has a website to his shop, I'm sure all of us would like to see what he has available and also help him out as well.

Now on this LL/Walthers purchase, I really can't see anything negative about this situation. (Will see down the road). When I started in this hobby, I really did'nt pay to much attention on mergers. I was happy with my Athearn BB's and some rolling stock. Then things started to get interesting, products were being produced with more details, better accuracy, smoother paint jobs. Then there were more changes, DCC and sound systems! Now is this a bad thing? Depends on your requirements!!! I welcome these changes! (But it seems that some of us have also changed. We are accepting more detail and accuracy for that 'Realistic Train'). But on the other hand, I'm finding myself turning out to be a collector in trains when actually I just buy them so I can run them on my layout. I'm sort of hesitant in weathering a locomotive when maybe down the road it will be worth more as a 'collectors item'. I'm even turning out to be a 'Parts Hound', ever since the rise and fall of Rivarossi, parts are now becoming more obselete or overpriced. Over all, I'm still happy with my Athearn BB's.

[Anonymous]

I believe this buyout was to compensate for the Horizon / Athearn deal which cut of Walthers from the athearn market. This may cut out Horizon from the Life Like market if they do not cooperate with Walthers.

Just a Guess about how to do business and succeed.

[Anonymous]

My grampa Billie owns the LHS in our town and he says that Walthers buying LifeLike will be really good for small hobby shops like his. Grampa Billie says that sometimes LifeLike made way too much stuff that they couldn't sell and whenever they needed some money they would dump a bunch of train stuff out to a LHS in Baltimore for really, really cheap. That's why some of the mailorder places in the magazines offer the Proto locos at such good prices, and Grampa Billie can't compete because he can't buy directly from LifeLike.

And Grampa Billie says that Walthers doesn't make him buy a whole bunch of stuff to keep his account open like Horizon does. He says that if Walthers wants to get rid of their inventory they let all the shops buy at the same price.

Anyway, Grampa Billie thinks that Walthers buying LL is gonna make it easier for him to stay in business so he likes it so I like it.

[jeffshultz]

I've seen the Athearn "Print Catalog" - it was massive, with many sections, and updates were sent out regularly to replace pages in it.

Which is why it was a hobby shop item in a three ring binder.

I did have fun organizing it for the owner of the LHS.

[Darth Santa Fe]

How long is this topic going to be sticky?

[Darth Santa Fe]

QUOTE: Originally posted by gbailey

Athearns web site has been a mess since Horizon took over !!!
The old Athearn website was accessable and user friendly ... not so the "new and improved (?)" one.

I don't like the new setup either. I went to Horizon's website once and the search was exactly the same as it is on Athearn's website now. I wonder if Horizon's gotten complaints from people about their way of marketing? If so, you'd think they'd learn.

[loathar]

CNWFan11-I have actually seen one LL set at one Toys R Us, but Wall Mart? They have 1 or 2 sets on their web site, but not in their stores even at X-Mas. I went to 4 WM's last X-Mas and they looked at me like-Who the H*ll plays with trains any more?Sad...

[BRAKIE]

Perhaps LL bottom line wasn't the best??? After all any time one can buy a high dollar engine at give away prices of $29.95 or 39.95 (or pick 'em up off of e bay for a bid of $25.00) something is dead wrong.How long has been since you seen a Atlas or Kato engine for those prices? How many gears have you replace on a Athearn,Atlas or Kato engine? Remember those free replacement gears? Those gears and other replacement parts wasn't free..Then there is the slow speed and incorrect details that many complained about-even the retooled GP38-2 wasn't error free.We all know of the major mistakes on the preproduction GP38-2 and how they had to retool the dies in order to fix the mistakes.We have read about the problems with the 0-8-0 and 0-6-0 steamers.
Naw,somethings not right here.
I bet some will even place the blame on the buyout of LL by Walthers on UP.[:0][;)]

[turbine71]

Talking about the Walthers/LL ......

I bought a ton of LL/Proto stuff over the years..then boom BLI hits the market with sound,
have not bought LL since....
Sure they have sound now but they were slow to get their product to market.

sound is here to stay and it can only get better...

[bcawthon]

Horizon is an R/C company that got into the model railroad business in a big way with the acquistions of Athearn and MDC. Walthers has been in the business for many years. Horizon will need to adjust to the needs of the market. Maybe that means a catalog, maybe not. A print catalog like Walthers is a major expense. I do think Horizon needs to improve their online catalogs, but that's something that can be done relatively easily.

What I am not sure about is any need for Walthers to raise LL prices. They're getting the best possible discount now, anyway.

[dinwitty]

LifeLike has a line of lower end equipment for the general public, train sets and the like, them starter sets we all got for christmas around the tree....
listed in the sears/montgomery wards etc catalogues....

[Anonymous]

Athearns web site has been a mess since Horizon took over !!!
The old Athearn website was accessable and user friendly ... not so the "new and improved (?)" one.

And I don't want any "new" makers if BLI diesels are the result.
I'd rather buy Athearn BBs than waste my money with a too expensive model with poor detail, wrong paint, and wrong sound !!!!!!

Walthers has been a fixture in the hobby for years, and I think they will do a better job with LL than Horizon is doing with Athearn.

[simon1966]

We are in pure speculation mode here. If you read the press release on the LifeLike web site, you are given the distinct impression that the foam business is doing very well and the sale of the hobby business was to allow investment and growth in the larger core business of the company. This does not mean that the hobby business was unprofitable, but that the sale will allow for the focus of resources into the core business. The press release on the Walthers web site focuses on how the hobby business fits right into the core of the Walthers strategy. One thing I find curious, is that LifeLike is one of the bigger makers of slot car racing sets and this is not mentioned at all other than the fact that the Liflike racing logos are featured on the home page of the Walthers release.

Did Walthers go looking to try and blunt the approach of Horizon as a serious manufacturer and competitor? Did LifeLike go looking for a buyer to divest itself of the Hobby business? We probably will never know. As far as I know, neither of these are public companies so there would be no need for disclosure. Likewise we will never know the sale price or the business state of LifeLike. I would like to think that we can take the press releases at face value and conclude that this does appear to be a win win for both parent companies. If indeed the management of LifeLike were looking to invest in the "virtually unlimited growth opportunity in the markets serviced by our seven company-owned manufacturing plants.” then investment in the hobby business may well have suffered if it was in all liklihood less profitable than the foam business. This does not mean it is a bad business, a shrinking business or one with no future. To sell the asset while it is doing well and to channel the resultant funds into the high growth business makes perfect sense. We shall have to wait and see what Walthers decides to do with its new brand names. Lifelike did an amazing job changing the face of the company from a cheap trainset maker to a well respected model maker. Walthers I am sure recognize this and would want to build upon it.

[Anonymous]

try athearns web site,they're actually doing the roundhouse stuff anyway, I only hope walthers lets lifelike continue without adding unprototypical paint schemes and the like to their P1/2K lines.

[dinwitty]

The one problem I have so far with Horizon is accessibility and knowledge.

All of MDC and Athearn has dropped out of the Walthers catalogue
and I see little of nothing about Horizon.

I presume they have a website, well they do, but they work so different than how Wathers does.

If Horizon wants to do something smart, they should make a tru-blue research book like Walthers does.

Walthers may have snapped up LL to keep it away from Horizon.
So far I don't like the way Horizon is handling business, their rather inaccessible.

I emailed Horizon about some of their MDC kits, but the gal didnt seem to really know whadaheck was goin on.

I am going...Whoa and wow on Walthers doing this.

For Roco, Bankruptcy is a bankruptcy protection. Maybe they can get themselves in gear, or maybe they will just fallout totally, but keep the fingers crossed.
Its a modelmaker like BLI that came along surprise surprise and made a decent engine like the N&W 2-6-6-4 DCC and sound and do a reeaaaaally good job on it.

I think BLI is one of the good new modelmakers to come onboard.
Sorry to see Roco make this turn, and I hope Walthers helps to carry on LL's new breath of quality locos tradition.

[CNJ831]

QUOTE: Originally posted by orsonroy

QUOTE: Originally posted by CNJ831

Has anybody stopped to give a thought to the basic situation that must have existed to create an atmosphere where Walthers had the potential for buying out LL? We all consider LL a major player in the hobby and its locomotives are generally held in high esteem and seem to sell well.

Now Walthers is no billion dollar company by a long shot, so LL must have been either actively looking for a buyer or at least sending out vibes to that affect through the industry. To me this says LL could either see the future in model trains tails off or they were already not profitable enough to continue.

I fully expect to see a cascade effect in the near future as the likes of IHC, Model Power, Accurail, Con-Cor, Branchline, et al. give up the ghost to Walthers. And if Walthers past company purchase record is any measure, expect to see very little of each line survive!

CNJ831

Life Like, Inc., was bought out a year ago by an investment firm. Once they took control of the company and looked at the books, they saw that the only divisions that satisfied their desire to profit from their investment was the foam divisions (the gliders are mostly foam-based). So...they went shopping for buyers. And believe it or not, Walthers is one of the biggest boys on the block. I'm assuming here that Horizon was too debt-ridden from buying Athearn and Roundhouse in the same year, and Walthers had the ca***o pony up. Nothing unusual here; these things happen all the time.

The background you provide regarding the current situation still jibes with comments. When a company is purchased, the new owners will generally attempt to divest themselves of some division or aspect of the company for one of two reasons. One possibility is that the division may not mesh well with the new owner's manufacturing and operation plans. The other is that the division is currently only maginally profitable and holds little future potential.

While your choice may be the first scenario, I still side with the second one...Life-Like trains was probably let go cheap. [;)]

CNJ831

[ChessieFan13]

I think that in the worlds of buisness the following will apply to us all.............WE are the consumers..........we give them OUR money for the things WE WANT.......There must be enough people that are buying Life Like Stuff........SOOOOO............ If we the people of this great hobby continue to do what makes our hearts and lives a little bit more serene then WE must look at this as a gift...........there is always a bright side to every situation................If you expand your minds and think with me...........Down the road a hobby shop where everything is compatable with every thing.......You dont have to tweak RTR stock before you run it.....Ask for a thing......anything........speak to the cleark and he trundles away to come back with EXACTLY what you want. You take it home and put it on your pike and poof it works just as you thought it would. Nothing extra to do. There are an endless number of possibilities that may happen.But The bottom line is the same....WE the Consumer........ Buy What WE Want .............So do just that continue to buy and hope for the best. MRRing is not on the Decline........Just as we have the younger people in here there will be a new generation of MRRs to come from them..........The more that we do to promote our hobby the mo0re that it will grow...........

WOW ............sorry for the [soapbox]


[soapbox]
Just how I feel..............ChessieFan13