Round 2 purchased by an investment firm

[bobthehobbyguy]

First off if kits were to be made in in the US it would have to be new tooling or tooling that's here  now.  Tooling in China isn't going anywhere. China simply won't allow it to leave.

Kit prices. You can't compare the prices from the past and then adjust for inflation. There's more to it than that.  in the past a lot more kits were being made for sale. Now a typical run is 5 thousand. There are fixed costs related to setup.  Those costs don't change if you make more. 

 

[ranma]

 Forgive me if I'm wrong but when Lindberg issued the '61 impala in the early 2000's , along with the '66 Chevelle  it was produced here in the states, and didn't cost any more than amt. mpc. or revell kit's. The issue of even getting the US owned molds back is as you said China would block it by saying they were owed for or such just to keep them. 

[Force]

Yes the China government could easily do that.
And of course it's greed and profit that made companies move production to Mexico, China, India, Poland and other low wage countries wich don't take environment issues in consiceration and have less rules to follow...of course it's cheaper then to produce the same things in countries that have to meet all the pollution, invironmental and workers rules.

The Lindberg tooling is most likely in China now as Round 2 owns the Lindberg brand.

[niteowl7710]

6 hours ago, ranma said:

 Forgive me if I'm wrong but when Lindberg issued the '61 impala in the early 2000's , along with the '66 Chevelle  it was produced here in the states, and didn't cost any more than amt. mpc. or revell kit's. The issue of even getting the US owned molds back is as you said China would block it by saying they were owed for or such just to keep them. 

When Lindberg was a division of Craft House in Toledo they did make their kits in the U.S.  But then so did everyone else, that era was prior to AMT/Ertl sending the bulk of the tooling to Mexico and then China, and Revell also sending the bulk of their tooling to China as well.

There's a twofold problem to re-shoring. First off is the obvious cost. Salvinos JR is doing their tooling/production in the U.S. and their kits are $40 direct and price varies on the retail side, but I've never seen one cost less than $32 that wasn't being blasted out on Clearance. Secondly at this point China is THE place for this type of intricate tooling & machining work. They have nearly 25 years working with U.S. companies, to say nothing of earlier relationships with Asian manufacturers.

Both Round2 and Revell US have domestic based tooling lying around and have found facilities that can produce it. But both have obviously concluded it's more cost effective to do their tooling and production in China. 

[niteowl7710]

1 minute ago, Force said:

The Lindberg tooling is most likely in China now as Round 2 owns the Lindberg brand.

Most of it is still here, only the tooling directly developed once Testors sold it to J. Lloyd was done in China (like the '06 Dodge Chargers).

If you look at any of the "merged into AMT" line of 90s Lindberg kits they're all being run up in Michigan. This is - for example - the recent reissue of the '64 Belvidere. 

[BlackSheep214]

On 1/30/2021 at 1:10 AM, Robberbaron said:

Uh oh.....

My thoughts exactly. Another investor with zero knowledge of the hobby to destroy a model kit business to the ground. You how the old saying goes... Money talks, BS walks.

[Force]

10 minutes ago, niteowl7710 said:

Most of it is still here, only the tooling directly developed once Testors sold it to J. Lloyd was done in China (like the '06 Dodge Chargers).

If you look at any of the "merged into AMT" line of 90s Lindberg kits they're all being run up in Michigan. This is - for example - the recent reissue of the '64 Belvidere. 

Lets hope they will remain in the US.

[tim boyd]

From what I'm hearing, the gang inside Round 2 is very excited about the future potential here. 

Look, I'm as skeptical as anybody about investment funds buying into successful independent business firms, but in my  view this one has the potential for a far more favorable outcome, both short and long term,  than that other investment firm purchase of a long-fabled modeling enterprise three years ago. 

So let's try to keep an open mind about this one....as usual, only time will tell us the actual outcome.  

Best....TIM 

 

[Dave Van]

4 minutes ago, tim boyd said:

From what I'm hearing, the gang inside Round 2 is very excited about the future potential here. 

Look, I'm as skeptical as anybody about investment funds buying into successful independent business firms, but in my  view this one has the potential for a far more favorable outcome, both short and long term,  than that other investment firm purchase of a long-fabled modeling enterprise three years ago. 

So let's try to keep an open mind about this one....as usual, only time will tell us the actual outcome.  

Best....TIM 

 

Yes....positive until it ain't!!!!!

Being a non public company we have ZERO info on R2 and it's finances. BUT...from my days as a banking Sr Analyst investment firms buy into companies for two reasons. They did get a look at their books and feel that with a investment in the company (R2) they could make more money. Pretty basic and simple. The other reason is the company is failing,  owns a lot of real estate, fixed assets and or intellectual property that is in demand. The company is under valued and the investment firm can buy it, cut it up and make much more on parts and pieces than the whole.  Not being public we do not know what assets R2 has.....but I am betting the have MUCH more  PROFIT potential than just scrap value.....mch more. 

That's is a good thing. Only time will tell. NONE of us on the outside know for sure. 

[peter31a]

10 minutes ago, tim boyd said:

From what I'm hearing, the gang inside Round 2 is very excited about the future potential here. 

Look, I'm as skeptical as anybody about investment funds buying into successful independent business firms, but in my  view this one has the potential for a far more favorable outcome, both short and long term,  than that other investment firm purchase of a long-fabled modeling enterprise three years ago. 

So let's try to keep an open mind about this one....as usual, only time will tell us the actual outcome.  

Best....TIM 

 

I guess one of the reasons I'm sceptical is that we just lost Squadron. The way I heard it explained is that they were bought out by an investment company who put their own manager in the place, who didn't know the model hobby industry, didn't really care about and slowly but surely managed to run it into the ground. As long as Tom Lowe is around I have hope but if we hear he has left, I'd be worried. I'm also a little concerned when there is mention in the statement about the collectibles industry. I know this is a large part of Round 2's business but as a model builder when hobby industry or model industry isn't mentioned, I kind of second the uh oh..... Are we going to favour collecting over building? Anyway we shall see. It's quite the big news for our hobby.

[tim boyd]

I understand that Round 2 is going to do a press release on the acquisition sometime this coming week.  That will probably tell us a lot more about what to expect.   TIM 

[mikemodeler]

1 hour ago, tim boyd said:

I understand that Round 2 is going to do a press release on the acquisition sometime this coming week.  That will probably tell us a lot more about what to expect.   TIM 

Gee Tim, that almost sounds like we should wait and hear what the company has to say about this, doesn't it?!?!?!?!?!?   

Hey, we can all speculate what it going on with Round2, but why not wait for them to comment? 

Edited January 31, 2021 by mikemodeler

[niteowl7710]

Breaking News - Models are Collectibles. I give you 87 Coke branded kits, movie tie-ins, Hostess, Nestlé, and now Hot Wheels licensing. Also take a look around where you're about to type your sparky replies from...I bet it looks like a hobby shop. You might think you're all model builders, but you're really model collectors who happen to build a model occasionally.

Oh and if Round2 can use that spiffy new Star Wars license to make Mandalorian kits before Bandai can, or at least hold a good chunk of the North American market, that my friends will be a printing press of dollarary doos. One of the most in demand thing for Star Wars collectors are subject matter from the TV Series.

Edited January 31, 2021 by niteowl7710

[Dave Van]

1 hour ago, mikemodeler said:

Gee Tim, that almost sounds like we should wait and hear what the company has to say about this, doesn't it?!?!?!?!?!?   

Hey, we can all speculate what it going on with Round2, but why not wait for them to comment? 

What fun is there in waiting on FACTS!!!!!  Party popper! 😄

[Dave Van]

15 minutes ago, niteowl7710 said:

Breaking News - Models are Collectibles. I give you 87 Coke branded kits, movie tie-ins, Hostess, Nestlé, and now Hot Wheels licensing. Also take a look around where you're about to type your sparky replies from...I bet it looks like a hobby shop. You might think you're all model builders, but you're really model collectors who happen to build a model occasionally.

Oh and if Round2 can use that spiffy new Star Wars license to make Mandalorian kits before Bandai can, or at least hold a good chunk of the North American market, that my friends will be a printing press of dollarary doos. One of the most in demand thing for Star Wars collectors are subject matter from the TV Series.

R2 has a current license for Hot Wheels??? I had not heard that.....Info?

[Tom Geiger]

3 hours ago, niteowl7710 said:

Most of it is still here, only the tooling directly developed once Testors sold it to J. Lloyd was done in China (like the '06 Dodge Chargers).

If you look at any of the "merged into AMT" line of 90s Lindberg kits they're all being run up in Michigan. This is - for example - the recent reissue of the '64 Belvidere. 

 

I believe that's JK Manufacturing at 520 Dresden Street in Kalkaska..  very small company but does work for many large toy manufacturers.

[niteowl7710]

57 minutes ago, Dave Van said:

R2 has a current license for Hot Wheels??? I had not heard that.....Info?

Well they've had it at least in partial for the Sponsorship of some of the Drag kits, but now they appear to be expanding a bit into regular kits. This 2010 Camaro (which would be a Showroom Replica base) and the next kit number sequentially which is listed as a "1/25 Hot Wheels Ford Monster Truck".

 

Edited February 1, 2021 by niteowl7710

[mikemodeler]

2 hours ago, Dave Van said:

What fun is there in waiting on FACTS!!!!!  Party popper! 😄

Because speculating on things you have no knowledge of feeds the rumor mill and creates endless speculation. You alluded to there being financial issues with Round2 and yet have no evidence, which leads others to think they will go out of business. THAT does a huge disservice to all of the hard work the staff at Round2, Tom Lowe included, have done to bring us all kinds of new tools and re-issues we thought we might not ever see.

[martinfan5]

10 minutes ago, mikemodeler said:

Because speculating on things you have no knowledge of feeds the rumor mill and creates endless speculation. You alluded to there being financial issues with Round2 and yet have no evidence, which leads others to think they will go out of business. THAT does a huge disservice to all of the hard work the staff at Round2, Tom Lowe included, have done to bring us all kinds of new tools and re-issues we thought we might not ever see.

 

[Dave Van]

2 hours ago, niteowl7710 said:

Well they've had it at least in partial for the Sponsorship of some of the Drag kits, but now they appear to be expanding a bit into regular kits. This 2010 Camaro (which would be a Showroom Replica base) and the next kit number sequentially which is listed as a "1/25 Hot Wheels Ford Monster Truck".

 

Thanks for posting that...never saw that. I was thinking along the lines of kits of HW cars! I have done a few HW builds....

 

52 minutes ago, mikemodeler said:

Because speculating on things you have no knowledge of feeds the rumor mill and creates endless speculation. You alluded to there being financial issues with Round2 and yet have no evidence, which leads others to think they will go out of business. THAT does a huge disservice to all of the hard work the staff at Round2, Tom Lowe included, have done to bring us all kinds of new tools and re-issues we thought we might not ever see.

I was making an attempt at humor.....seems I failed!  But I know of no subject  like this that is NOT discussed in depth on this forum no matter how little we KNOW.....pretty harmless if kept civil! 

 

One of my 'Hot Wheels' inspired builds. 

Edited February 1, 2021 by Dave Van

[Rodent]

5 hours ago, Dave Van said:

Yes....positive until it ain't!!!!!

Being a non public company we have ZERO info on R2 and it's finances. BUT...from my days as a banking Sr Analyst investment firms buy into companies for two reasons. They did get a look at their books and feel that with a investment in the company (R2) they could make more money. Pretty basic and simple. The other reason is the company is failing,  owns a lot of real estate, fixed assets and or intellectual property that is in demand. The company is under valued and the investment firm can buy it, cut it up and make much more on parts and pieces than the whole.  Not being public we do not know what assets R2 has.....but I am betting the have MUCH more  PROFIT potential than just scrap value.....mch more. 

That's is a good thing. Only time will tell. NONE of us on the outside know for sure. 

I understood what you were saying, and it wasn't that you thought R2 was failing. Everything in the middle paragraph is true. Sears Holdings is a perfect example of a completely worthless company that owns a lot of real estate. Unfortunately, COVID swooped in and snatched the floor out from under the value of shopping center real estate. Eddie Lampert has already bled everything else that was of value out of the company, and nobody seems to want Kenmore.

A Fortune 500 company bought the little (former) startup I work for in 1996 because they liked what we were doing and they thought they could sell our product to their existing customers and their product to our customers. Seems to have worked out pretty well for everyone.

I hope everything works out well for R2. They have a lot of cool stuff and seem to have a very pro-hobby attitude.

[Dave Van]

Agree.....

[GMP440]

 

  Lets all hope for positive outcomes for Round 2 and us model builders.  The ball has started to roll for production of model car subjects that we haven't seen in over 50 years.   I'm sure with Tom Lowe at the helm, the future for Round 2 will even be brighter.  This is a chance for new money to come in to support future model kit subjects.  We could very well see more highly requested kit subjects come out and come out even sooner than we have seen in the past.

 

[Richard Bartrop]

6 hours ago, niteowl7710 said:

Breaking News - Models are Collectibles. I give you 87 Coke branded kits, movie tie-ins, Hostess, Nestlé, and now Hot Wheels licensing. Also take a look around where you're about to type your sparky replies from...I bet it looks like a hobby shop. You might think you're all model builders, but you're really model collectors who happen to build a model occasionally.

Oh and if Round2 can use that spiffy new Star Wars license to make Mandalorian kits before Bandai can, or at least hold a good chunk of the North American market, that my friends will be a printing press of dollarary doos. One of the most in demand thing for Star Wars collectors are subject matter from the TV Series.

You mean, there are people who don't know Round 2 is in the collectibles business?

If they want a media connection, then I guess we just need to convince them that there's an army of Banacek fans out there with a burning need to own a model of his Packard convertible.

[BlackSheep214]

In another forum I belong to have zero confidence in this news & I agree with them. You migjt as well say goodbye to them in a few years. Just stock up on kits while you can before they tank.

Nothing good every comes out of it when investors have zero knowledge in the model industry.