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Hobbico - BANKRUPT!


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After just declaring it was shutting down it's Reno, NV warehouse a couple of days, Hobbico declared bankruptcy this morning.  Which could mean the end of both Revells (since Hobbico bought the German side too).  Well 2018 just got a lot more interesting...

Hobbico "has determined that it may be necessary in the near future to permanently close and discontinue all of its operations in connection with a bankruptcy case to be filed under chapter 11 of the United States Bankruptcy Code," wrote human resources Director Howard Salazar in a letter dated Wednesday obtained by The News-Gazette.

http://www.news-gazette.com/news/local/2018-01-10/hobbico-files-bankruptcy-layoffs-next.html

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I was wondering if this was going to show up here... could send ripples throughout the hobby... as well as many others we have an interest in..  They own TowerHobbies as well.

Via Wikipedia

The company distributes over 150 brands of hobby products including about 30 proprietary product brands. Proprietary brands include: Axial, ARRMA, Dromida, Team Durango, dBoots, Revell, Monogram, Top Flite, Great Planes, AquaCraft Models, FlightPower, Heli-Max, SuperTigre, O'Donnell Fuel, Duratrax, RealFlight, MonoKote, Carl Goldberg Products, ElectriFly, Coverite, Dynaflite, Flyzone, MuchMore Racing, LiFeSource, Tactic, VS Tank, Estes Industries, Proto-X, TrakPower and others. It is the exclusive distributor for Futaba radio control products in North and South America, for O.S. Engines in North America and HPI Racing, Italeri, Novak Electronics and Nine Eagles in North and South America.

Edited by Impalow
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From my sources, this has been coming for some time.  Hobbico started out as "Tower Hobbies", about 1969 or so, as a "garage operation" (LITERALLY) in the small Illinois town of Hoopeston, which is just 35 miles (give or take) west of where I live in Lafayette IN.  Tower was a PIA for us in the retail hobby business, taking orders for RC systems, then placing them with the Mfr--such as Kraft RC.  They then branched out into model airplane engines, same story.  When I started The Modelmaker Hobby Shop here in Lafayette, in 1984,  I set up an account with Tower (as they were then known entirely, so as to get the lines of RC car kits they offered (Kyosho), but very soon dropped them, as I learned very quickly that I was but a showroom for them--guys would come in, see what was the latest, then order the kit from Tower.  Then, to add insult to injury, they'd come back to me, expecting ME to help them assemble the damned things.  That ended my relationship with them, pronto.

Today, it's much the same thing:  AMAZON.  Far too many who populate this, and other hobby boards lament the lack of "brick and mortar" hobby shops,  but fail to realize that those mail order outfits are the ones who suck the lifeblood out of the local hobby shop.  Not that every local hobby shop owner is the epitome of the rising saviour, but still.....

I know this has been said more than a few times before,  but here goes again:  IF YOU WANT A LOCAL HOBBY SHOP,  SUPPORT THEM TO THE BEST OF YOUR ABILITY!  YOU WANT THAT BOTTLE OF PAINT, THAT TUBE OR BOTTLE OF GLUE AT A MOMENT'S NOTICE, SUPPORT THEM!   GLUE AND PAINTS DON'T KEEP THE DOORS OPEN--IT'S THE LARGER TICKET ITEMS THAT DO.  Now, I'm not stupid enough to ascribe divinity to LHS owners, but they will not survive if all you do is "showroom shop" them, and then go online and order the kit.  Think about that!

Art

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While supporting your LHS is all fine and well, Hobbico is making money no matter how you obtain a Revell kit. It's not like Amazon Vendors have some way of acquiring Hobbico products without buying them either from them directly or some other middleman that bought them from Hobbico.

Edited by niteowl7710
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2 minutes ago, peter31a said:

Did not know they owned Italeri as well. This may have a major impact on out hobby. So much for worrying about whether the 30 Ford A coupe will be out again and when. This changes everything doesn't it?

They don't OWN Italeri, they're the North & South America distributor for them.

Edited by niteowl7710
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This is a very interesting development in our hobby and not being closely associated with the "business" side of it, caught me (and probably many others) off guard. My biggest concern would be what is the future of Revell ? While I admit to buying from Tower, it has been awhile simply because I haven't been buying like I used to. Hopefully Revell survives and thrives as they have brought us some much wanted items in recent times and can continue to do so. 

Who knows, maybe Hobby Lobby buys them and incorporates them into stores even more than they are now!

 

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Just now, mikemodeler said:

This is a very interesting development in our hobby and not being closely associated with the "business" side of it, caught me (and probably many others) off guard. My biggest concern would be what is the future of Revell ? While I admit to buying from Tower, it has been awhile simply because I haven't been buying like I used to. Hopefully Revell survives and thrives as they have brought us some much wanted items in recent times and can continue to do so. 

Who knows, maybe Hobby Lobby buys them and incorporates them into stores even more than they are now!

 

Tower Hobbies goes kaput with this liquidation too, as it was half of what made Hobbico to begin with, I doubt Hobby Lobby is gonna buy Revell. Running a model company has nothing to do with operating a retail chain.

Other than a random ownership group, the only person I can think of that has enough cash to scoop them up is...Mr. Lowe. Round2 suddenly RULES THE WORLD! Maybe the prior RevellAG ownership will buy them back. Revell had owned and sold the German arm before.

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5 minutes ago, niteowl7710 said:

While supporting your LHS is all fine and well, Hobbico is making money no matter how you obtain a Revell kit. It's not like Amazon Vendors have some way of acquiring Hobbico products without buying them either from them directly or some other middleman that bought them from Hobbico.

Exactly. While Amazon hurts the LHS or Michaels/Hobby Lobby type locations, Hobbico gets the sale of a Revell model kit as the owner of Revell. While not as profitable, volume is as important as profit margin when dealing with a shrinking category.

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7 minutes ago, SfanGoch said:

Filing for Chapter 11 doesn't necessarily mean that the entire operation will fold. GM reformed without the less profitable divisions pared off.

The way that article reads unless someone wants to play in their debt restructuring, they're gonna liquidate in April.

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6 minutes ago, SfanGoch said:

Filing for Chapter 11 doesn't necessarily mean that the entire operation will fold. GM reformed without the less profitable divisions pared off.

This is true for most companies needing some breathing room and a chance to negotiate with it's creditors.

However it turns out, safe to say that our hobby will be affected and quite possibly not in the best way.

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3 minutes ago, niteowl7710 said:

The way that article reads unless someone wants to play in their debt restructuring, they're gonna liquidate in April.

Their asset to liability (per the article) is 1:10 or 10 cents on the dollar. Could be a bargain for the right buyer but doesn't look good for the creditors.

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I don't think this is the death of Revell.....law requires assets to be sold.  It MAY mean R2 holds all the US based kit molds.......but I think Revell has more value as a model co  than what molds sitting in China will as scrap. (add in the China lean on tooling cut in China and you have a mess)

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5 minutes ago, Dave Van said:

I don't think this is the death of Revell.....law requires assets to be sold.  It MAY mean R2 holds all the US based kit molds.......but I think Revell has more value as a model co  than what molds sitting in China will as scrap. (add in the China lean on tooling cut in China and you have a mess)

Most companies are worth more as a name than their physical assets. 

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