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Industry News - January 2009

Published: December 12, 2008
LGB distributed exclusively by Walthers
Märklin Inc., the North American subsidiary of Gebr. Märklin & Cie. GmbH, has appointed Wm. K. Walthers of Milwaukee, Wis. its exclusive distributor for LGB products in North America.

Walthers will handle sales, warehousing and distribution of the LGB product line effective Jan. 1, 2009. In addition, Walthers will provide warranty and retail service for LGB products, and will stock a full assortment of LGB parts.

Märklin Inc., based in New Berlin, Wis., will provide marketing and technical support to Walthers and the North American market.

Dealers and enthusiasts can visit to download the 2008 LGB New Items brochure. 2009 LGB new items with be announced in February at the Nürnberg Toy Fair.

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Act may have impact on imports
Passed in 1900, the Lacey Act was created to make trafficking "illegal" wildlife, fish and plants much more difficult. First amended in 1981, Congress amended Lacey again in 2008, expanding its protection to a broader range of plants and plant products.

The Lacey Act, as of May 2008, made it illegal to import, export, transport, sell, receive, acquire or purchase any plant (with some exceptions) taken, possessed, transported or sold in violation of any federal or state laws. It also made submitting false records for any plant covered by the act unlawful.

With Lacey's broadened scope, some in the hobby industry and others were concerned that more paperwork, and therefore, more costs would be involved with importing products. Questions arose about whether boxes would require import declarations, along with the contents and other packing materials that may be derived from paper or wood pulp. Further, the new restrictions could seriously hamper imports if they did contain some percentage of a forbidden plant species.

The good news is that boxes and packing materials, according to Alex Belano, assistant branch chief of Commodity Import Analysis and Operations for the USDA's Animal and Plant Health Inspection Service (APHIS), do not require import declarations. As currently viewed by APHIS, boxes for products that may have been manufactured and printed overseas do not require an import declaration.

However, items inside those boxes do fall under Lacey's purview. For instance, decal sheets and instructions printed outside the U.S., or wood or paper-based game boards and pieces, would have to be accompanied by a declaration.

Belano says that the amendment is a new rule, and the various government agencies involved are discussing the amendment's impact and scope.
"We're getting a lot of feedback from a lot of different industries that have concerns," Assistant Branch Chief Belano said. He believes that the scope of the amendment will narrow as time passes.

Currently, declaration requirements will be phased in starting on Dec. 15, 2008, and then at a rate of approximately every three months, as electronic data collection systems are brought online. As it now stands, declaration requirements for tools, toys and games (which cover much of the hobby industry) will begin Sept. 30, 2009.

According to Belano, Congress is considering an increase in the amount of time between enforcement phases.

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Kader Holdings acquires Sanda Kan
Hong Kong-based toy and model manufacturer Kader Holdings, parent company Bachmann Industries, is in the process of completing the acquisition of Chinese model manufacturer Sanda Kan for $8.5 million. Sanda Kan specializes in the production of model railway and slot-car items for numerous companies around the world.

Prior to the acquisition, Kader was already one of the world's largest manufacturers by volume of model railroading products, while Sanda Kan enjoyed prominence as a supplier of model railroading products and slot-car systems.

In a release, Kader indicates it hopes the Sanda Kan purchase will help it solidify supply of model railroading products worldwide.

"Kader's acquisition of Sanda Kan is good news for all the companies involved. Modelers and hobbyists around the world, no matter what brand they choose, can expect the same commitment to quality they have known from both Kader and Sanda Kan," said a press release from Bud Reece, senior vice president of sales and marketing at Bachmann Industries Inc.

Kader Holdings was formed in 1948 by Ting Hsiung-chao in Hong Kong and rapidly developed into a leading toy manufacturer. In 1952, it began making HO-scale electric toy trains for Bachmann, which Kader purchased in 1981.

As news of the pending acquisition of Sanda Kan by Kader Holdings Company Limited, both headquartered in Hong Kong, spreads through the industry, several officials privately said in the short-term, it restores stability to model railroad manufacturing. None, however are certain of the long-term effects of having a significant portion of control of the world's model railroad manufacturing under control of one company.

Atlas Model Railroad Co. sent a release to its distributors, dealers and consumers to assure them they're supportive of the action and anticipate no delivery disruptions. Sanda Kan (SDK), the major supplier of Atlas products in HO, N and O scales, has produced Atlas products for more than 15 years.

"We ... look forward to working with Kader Holdings to ensure continuation of the successful relationship we have enjoyed with Sanda Kan for so many years," said Thomas W. Haedrich, Atlas CEO. "

Officials involved in the acquisition stated it's viewed as more of a "partnership" than a merger. Currently, intentions are to keep present management at SDK intact, and SDK will continue to operate as a separate entity from Kader. A formal announcement of the acquisition will be made by Kader when the deal is finalized.

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SCORE, Office Depot Foundation alliance
Service Corps of Retired Executives (SCORE) and the Office Depot Foundation have embarked upon a multi-year alliance to aid small-business owners, start-up entrepreneurs and nonprofit organizations.

The Office Depot Foundation, an independent organization that serves as the primary charitable giving arm of Office Depot Inc., will sponsor the Disaster Prep and Relief section of the SCORE Web site,

SCORE will participate in ongoing initiatives sponsored by the Office Depot Foundation that address disaster preparation and planning. The Foundation will also fund the reprinting of Business Planning Tools for Nonprofits and help distribute copies through the White House Office of Faith-Based and Community Initiatives regional events.

In a press release, SCORE CEO Ken Yancey said, "SCORE's alliance with the Office Depot Foundation will help us continue to provide the latest resources and valuable assistance to help small businesses prepare for and recover from a disaster."

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Milwaukee's Trainfest sets attendance record
The economy doesn't seem to be having much effect on hobby show attendance. Milwaukee's annual Trainfest, Nov. 8-9, broke the attendance record it set last year.

According to show officials, total attendance this year was 21,621, up 642 from 2007. Also in attendance were more than 1,800 exhibitors, layout operators, manufacturer representatives and hobby dealers.

Retailers selling at the show reported numbers down from last year.

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Stevens appoints new executive assistant
Stevens International has promoted Mary Bitzberger to executive assistant. In 1988, Bitzberger started her career at Stevens International as an order processor in the warehouse. Later, she was put in charge of promotions and advertising. Recently, her responsibilities expanded to include some purchasing duties in conjunction with her promotional activities.

As executive assistant, Bitzberger will now oversee office and warehouse operations in addition to her previous duties.

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Walthers adds Schon; promotes three
Mike Schon has joined Wm. K. Walthers Inc. as its national sales manager. He'll be responsible for dealer sales.

Schon was formerly national sales director for Rokenbok Toy Co., Solana Beach, Calif. He has more than 25 years of hobby and toy sales and management experience, and has worked for Golden Books Family Entertainment and Gibson Greetings.

Other promotions have been made within the company's marketing department. Zach Thompson now has the group product manager title and will be responsible for marketing rolling stock and Trainline products as well as locomotive product marketing. He's been with the company since 2004.

Beth Korolevich is now the group manager for Life-Like and Darda brands. She has been at Walthers for 13 years.

Joan Malek is the new group product manager for locomotive development. She joined Walthers last year.

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Fliton exclusive with Advantage Hobby
Advantage Hobby announced at iHobby Expo it has acquired exclusive distribution rights to Korea-based Fliton aircraft and accessories for North and South America.

Fliton has been manufacturing R/C aircraft for more than five years and has previously been distributed through Hobby Lobby.

Over the next "several" months, Fliton's entire lineup of planes will be available to retailers through Advantage Hobby, as will parts and technical support. Advantage will also launch Products will not be available through the site, but it will feature technical information on all of Fliton's planes and a listing of dealers that carry Fliton products.

In the meantime, retailers can log onto to view available Fliton products.

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Longtime pals find success in stores
Childhood friends Todd Andersen and Bill Barker aren't hobbyists. But you wouldn't know it if you walked into one of their two Hub Hobby Centers. The stores' shelves are so packed with everything from rock-polishing kits, to model train track, to miniature farm animals, that customers might think they're playing Jenga when they reach for something.

Named after the Hub Shopping Center in Richfield, Minn., where the business had its first retail location in the 1960s, Hub Hobby moved to its current location (also in Richfield) in the mid-1980s and opened a second store in Little Canada a couple of years later.

Barker, now 51, bought the business from its original owners in 1979 after bailing out of college. He wanted to run a business himself and thought Hub Hobby had potential.

Andersen, 49, came aboard in 1988 when he was an MBA candidate at the University of St. Thomas. Because he lived near the relocated Richfield store, he eventually took on the responsibility of overseeing that location while Barker worked at the Little Canada location.

Today, the stores are a melting pot of everything from die-cast collectible cars to ant farms, most of which isn't carried by big-box retailers. Andersen said he looks for items that will differentiate his offerings from those places - he says there is only a 10% overlap between his product line and that sold at a store like Target. The business was named National Hobby Retailer of the Year in 2001.

While Andersen says there will always be the customer base of die-hard hobbyists who come into the store on a regular basis to buy a new piece of track for their model railroad, he has focused on drawing in more families and casual hobbyists. The Beanie Babies craze of the 1990s helped him make strides in that category.

Reaching a younger audience that has grown up in a digital age, however, has been a bit of a challenge for Hub Hobby.

Trendy remote-control products like indoor helicopters help raise the excitement level, Andersen said.

The company doesn't use the fancy scanners or inventory tracking programs. Instead, customers will see employees punching digits into a cash register and slapping price tags onto merchandise. A move away from that, Andersen says, could take away from the "mom-and-pop" aura of the store.

The company's Web site, too, is rudimentary, but Andersen says that's about to change, with a professionally designed site set to launch this month.

Even with consumers pulling in the reins on discretionary spending, Hub Hobby has had a good year. Andersen says the Richfield store has seen four all-time record sales months this year, leaving the company on track to rake in more than $4 million in sales this year.

Andersen has found that during times of national crisis or economic hardship, people often turn away from the "exotic things" and look to family-oriented activities. He still worries about the economy, though.

The partners would like to expand the business to other parts of the Twin Cities - especially south of the Minnesota River and out toward Albertville - but so far those hopes have been stonewalled by high rent and employment concerns, Andersen said.

The business can't just hire someone out of high school with no knowledge of the industry to babysit the shop, he said. The demand for product knowledge, especially in an area like model trains, makes that unworkable.

He admits that he has visited prospective locations, but for now it's just two childhood friends and their community hobby stores. -Andrew Cummins, Rochester, Minn., Post-Bulletin

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