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Model Railroading -------------------------------------------------------------------------------- Date: August 29, 2005 04:49 Walthers at Wal-Mart this Christmas? Author: KevinB -------------------------------------------------------------------------------- From the Milwaukee Business Journal: For those who aren't model railroad enthusiasts, William K. Walthers Inc. is probably an unfamiliar company, despite its 73-year history in Milwaukee. But by this Christmas, Walthers' new products could be a household name for Wal-Mart shoppers. Therein lies the massive opportunity -- and the potentially humbling learning curve -- for the family-owned firm that has built its reputation supplying 22,000 hobby shops. The triggering event for Walthers' first Christmas with Wal-Mart stores and other mass merchandisers like Meijer stores, was the July acquisition of the Life-Like Products toy and hobby division. The price was not disclosed, but it was easily the largest acquisition in Walthers' history, said Phil Walthers, a third-generation family member who has been president since 1987. The deal was financed with bank debt. Life-Like's previous owners had arranged the contract with Wal-Mart prior to the Walthers transaction. Wal-Mart will sell Life-Like HO scale slot car sets that are licensed to carry the NASCAR name. The miniature race cars are a new category for Walthers, which specializes in model trains. The list price for slot car sets runs from $100 to $212, but they'll sell for less than that at Wal-Mart. For example one set, the "super action speedway," has a list price of $143, but Wal-Mart's online site is carrying it for $78.84. Holiday priority Phil Walthers says the first priority is shipping the products to Wal-Mart in time for the holiday shopping season. "A lot of product is in the pipeline," Walthers said during an interview in his wood-paneled office at the company headquarters on Milwaukee's northwest side. "We'll get it delivered properly." In October, Walthers will begin negotiations for Christmas 2006 with Wal-Mart and others. He knows the high-volume business will mean lower profit margins than he's used to, but he sees it as an avenue to introduce young people to the hobby industry. He also hopes to convince Wal-Mart to carry additional products in the Walthers line. Most hobbyists today are "guys in their 40s and 50s," says Walthers, who is 57. He wants to improve the quality of the hobby products sold at Wal-Mart so that kids will gain a positive early experience with hobbies and get hooked. [Editor's Note: There are two additional pages to that story that weren't included here. To read them, go here: http://milwaukee.bizjournals.com/milwaukee/stories/2005/08/29/newscolumn1.html?page=1 and click the page numbers in the bottom right corner of the story.]
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