Hobbico - BANKRUPT!

[Ace-Garageguy]

4 minutes ago, crazyjim said:

revell.com is up and running right now.  The "About" link says absolutely nothing about being sold other than saying Revell was purchased by Hobbico in 2007.

Probably because their web presence is paid for until the end of the month, and there's nobody around to update the site. 

[MrObsessive]

8 minutes ago, Ace-Garageguy said:

Here's a thought.

The new German ownership may feel that maintaining a separate US Revell division is a waste of money and duplication of effort, especially in light of the US arm's apparent inability to maintain control of the tooling for two of its best selling kits...the model A roadster and coupe.

RoG has apparently been operating at a profit, and with access to Eastern-European tool and die makers, who are, frankly, better than the Chinese (and geographically almost in the neighborhood), the feeling just might be that RoG can handle everything. No reason to carry a US arm that seems to have trouble with measuring and dividing accurately.

Most of Revell US's recent offerings have had problems that could have easily been eliminated prior to production if somebody had cared enough to make the effort, rather than relying on apologists citing the usual litany of "reasons" regarding time zones, language difficulties, etc.

An investment group that's serious and professional in its approach to generating financial returns has no need for chronic excuse-makers on the payroll.

If RoG can cut production costs by cutting deadweight overhead, and maintain or RAISE quality by sourcing tooling and production within Europe (which is what I'd do), there's no reason to worry that Revell products here will go away. Everything you get from Revell USA has been mostly designed and made in China for a long time. It comes here in containers. 

Containers full of model kits can just as easily be shipped from Europe as they can be from China.

Bill, your quote I highlighted can be a very good thread unto itself. I'm hoping that the "hope to be released" '69 Mustang can FINALLY have a correct front end on it. If a guy like me with bad eyesight and no extravagant tooling can correct body shapes and contours, I just don't get why a model company with 10's of thousands of dollars to spend on tooling can't get it right.

With what's been happening to Revell lately, I'm just wanting to see the Mustang released in the first place........it's been pushed back twice now??

[mikemodeler]

A lot of speculating and very few facts here, I am inclined to wait a month once the deal is finalized and we should know more. I appreciate everyone chiming in with their interpretation of what is/has/will happen, but I think if we as modelers would just wait for some official announcement, we would be better off. Many of us have plenty of models and other things to work on besides bashing a management team, foreign ownership, WW2 history and insert the old "If I ran things, this is what I would do" babbling.

[Ace-Garageguy]

1 minute ago, mikemodeler said:

...I think if we as modelers would just wait for some official announcement, we would be better off...

Exactly MY feeling 15 pages back.

[crazyjim]

I can that, especially since I have almost no idea what the experts here are talking about.  I have plenty of kits to build and just got 5 more yesterday - Galaxie '48 Chevy S/D, '59  and '60 Corvettes, '69 Talladaga, and a '86 Fiero GT.

[Tom Geiger]

17 minutes ago, MrObsessive said:

That would be great if he's able to come to NNL East, but sadly the huge "Wish List" he had up for the last several years probably won't be back. It's a shame as there were some very good suggestions I've seen in the past, but all we can do is hope that at least the company survives at this point.

Ed Sexton had let me know over a month ago that he wouldn't be coming to NNL East personally.  He is sending two guys who routinely bring the RM display to shows.    

[TarheelRick]

Not really sure what is happening with Revell, since I have no business sense.  That being said I worked for Pony Express Delivery (anyone remember them) back in the late 90's.  They were struggling, poor leadership, etc, strong competition from UPS, FEDEX, and a new upstart DHL.  Borg-Warner (the gear people) bought out Pony Express, issued us all new uniforms, poured some money into the operation, then closed it down six months later and wrote it off on their taxes.  Just hope this is not what is happening with REvell.  But as others have said I have enough kits to last me until my 175th birthday.

[Dave Van]

55 minutes ago, Ace-Garageguy said:

Probably because their web presence is paid for until the end of the month, and there's nobody around to update the site. 

I pay yearly for my website domain, most do today, so it may float out there for a while. 

This whole thing had little to do with the day to day operators of Revell USA. They were doing their job....it all fell apart due to factors out of their control. And operating in China is no easy task. It's kinda become a 'tar baby'....it was easy to get into but almost impossible to get out. I was offered a job in the hobby biz once bet required travel to China 3-4 times a year. EVERYONE told me not to do it. It was a no win job.

[niteowl7710]

Some fun FACTS about the sale - because despite what some keep implying, reading a legal filing isn't speculation, it's simply reading comprehension.

Sales price - $3.9 Million Dollars

Breakdown as Follows - 

• Intercompany Loans (Loans Revell GmbH got via Revell/Hobbico) $1.00 - those have a 1 year grace period from the close of the deal (5/8) before the first payment is due
• Controlling Interest in Revell GmbH - $800,000
• Revell US Tooling - $50,000
• IP/Trademarks - $49,999
• Current Revell US Inventory - $3,000,000

The entire thing smacks of this company wanting - perhaps with current/former management of Revell GmbH on board in some form, since Blitz has no filings to peruse in relation to it's make-up - to purchase the German Division and release it from the shackles of Illinois.  Then decided - well since it's so cheap - I mean they bought business end of Revell/Monogram in effect for $100,000 - lets just go ahead and get all the tooling, licensing, and IP/Trademarks so we don't have to worry about trying to obtain someone to run US derived tools for European sales (for the Revell US stuff that Revell GmbH was going to release during 2018).  I had thought the were maintaining the lease on the Elk Grove Village property, which might imply a US arm at a later date, but further pouring through forms shows they're only obligated to pay the flaming tatters of "Hobbico" rent & lease in EGV and Champaign for as long as it takes from the completion of the sale to go in and transfer all the inventory and tooling which is still located in the U.S. over to Germany (or perhaps Poland since that's were Revell GmbH's manufacturing takes place).

I guess at this point there is no more Revell GmbH anymore either - it's just a monolithic REVELL.  It creates a Tamiya-esque company that has a huge tooling catalog and of course manufactures paints, glues, and hobby tools in Europe.

Edited April 14, 2018 by niteowl7710

[niteowl7710]

8 minutes ago, Dave Van said:

I pay yearly for my website domain, most do today, so it may float out there for a while. 

The Blitz people get control of the domains when the sale closes in May.  I would expect nothing will change on the website until then, since as pointed out earlier there's nobody left to edit it.

[Dave Van]

THAT was REALLY cheap....without due diligence information.....seems like no body wanted Revell.....if the end price is the $3.9M....WOW

[niteowl7710]

Intellectual Property Regarding Tools/Molds

• Print Files (Packaging, Stickers, building plans)
• For pre-decorated models - Tampo Print Files & Hand Spray Files 
• Bill of Material & Production Files
• Picture archive of products
• 2D Mold Layouts
• 3D Design Files
• Prototype Models

[niteowl7710]

4 minutes ago, Dave Van said:

THAT was REALLY cheap....without due diligence information.....seems like no body wanted Revell.....if the end price is the $3.9M....WOW

There seemed to be a couple of other bidders, but Blitz had what they didn't - CASH.  The other bids were all contingent on financing, while Blitz was able to cut a check for $295,000.00 for the deposit yesterday probably without even breaking a mild sweat.

[Dave Van]

Don't you think it was cheap??? Thanks for digging up info...

The retired bank analyst in me says bargain!!!

[Matt T.]

Sad for the Revell USA employees, but I would be happy to see European production (vs. China). I like the kits I’ve seen recently from Revell AG, Italeri, Eduard, Airfix, etc. Quality product and easy to keep tabs on it if production is basically in your backyard.

I think we’ll be fine. 

[niteowl7710]

13 minutes ago, Dave Van said:

Don't you think it was cheap??? Thanks for digging up info...

The retired bank analyst in me says bargain!!!

It was borderline strong armed robbery. The tooling alone had a book value over over $2 million...and they paid $50k. More over they bought Revell Germany and all of its tooling and hobby related businesses for what amounts to $800k and some promises to repay loans in 2019. The only thing they paid market value for is the inventory. 

Edited April 14, 2018 by niteowl7710

[Len Woodruff]

Thanks for keeping us updated everyone.

Edited April 14, 2018 by Len Woodruff

[Dave Van]

27 minutes ago, niteowl7710 said:

It was borderline strong armed robbery. The tooling alone had a book value over over $2 million...and they paid $50k. More over they bought Revell Germany and all of its tooling and hobby related businesses for what amounts to $800k and some promises to repay loans in 2019. The only thing they paid market value for is the inventory. 

Thank you. For digging up the info.....and confirming what I thought about the 'deal'. When I was still at the bank and did 'due diligence' on commercial investment loans $50K was what we called 'lunch money' something we'd overlook. $3.9M is almost nothing in commercial corporation money. 

[slusher]

If the kits come out of Germany,will the kit price go up??

[Dave Van]

14 minutes ago, slusher said:

If the kits come out of Germany,will the kit price go up??

Going to be a wait and see. The current MSRP is about the max the hobby will pay now. If they raise the price they will sell less than Tamiya does in the US market. IMHO Only!! 

[unclescott58]

3 hours ago, Ace-Garageguy said:

Exactly MY feeling 15 pages back.

I agree.

I have no head for business. And have no understanding, even after reading everything here, what's going to happen to Revell/Monogram. I can't imagine that the market for their models is not healthy enough that we'll be seeing end of the company in the near future? 

[Snake45]

If Revell disappears, what will I do? I guess I'll have to try to get by on the three or four hundred of their kits I have in my stash....

[Mr mopar]

There goes  any chance of any Tom Daniel kit being repopped !

Edited April 14, 2018 by Mr mopar

[Casey]

18 hours ago, Zoom Zoom said:

Ed Sexton may go on his own and sell some of his own models. He's very much into sports/racing cars and has been known to vend at some shows outside of being a Revell employee. 

He was at the Waukesha, WI show last April, but I didn't want to ask him any work (i.e. Revell) related questions on his free time. I'll see if he's vending at the same show tomorrow.

[Casey]

6 hours ago, Dave Van said:

I was actually referring to Cerberus Capital Management era.

This was my exact thought, too-- a company who buys other struggling companies on the cheap, then later re-sells them. There is no intent to own said company as a long-term investment, but rather as a business opportunity to get a relatively quick ROI. No idea if that's that is, in fact, the case here, but having the cash on hand to purchase the assets is a huge advantage as James pointed out, so more power to Blitz in this case.

I'm not worried Revell is going to continue as a company, but I don't forsee major dollars being invested in new tooling any time soon. 

 

2 hours ago, Mr mopar said:

There goes  any chance of any Tom Daniel kit being repopped !

It may work out that reissues are the new bread and butter for Revell, and while I don't know what type of arrangement Revell and Tom Daniel have, and am inclined to believe both would like to continue working together.

 

4 hours ago, niteowl7710 said:

It was borderline strong armed robbery. The tooling alone had a book value over over $2 million...and they paid $50k. More over they bought Revell Germany and all of its tooling and hobby related businesses for what amounts to $800k and some promises to repay loans in 2019. The only thing they paid market value for is the inventory. 

That $50,000 is a bit shocking, but from a cold, calculated business perspective, it makes perfect sense. Product which is ready to sell and make money now has more value than a mold which might produce a product which then needs packaging, distributing, etc., especially molds which are huge, heavy, and not easily moved about. I'm honestly more interested to find out what's going to happen to the physical assets (i.e. molds) since they seem to be located in China, Illinois, and Europe (Poland?).

Was there anything mentioned in any of the filings regarding money set aside for the Hobbico employees?