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Industry News - September 2009

Published: August 4, 2009

iHobby Expo celebrates 25 years

Hobby-industry retailers, manufacturers and distributors will gather at the Donald E. Stephens Convention Center in Rosemont, Ill., for iHobby Expo's 25th anniversary. The show runs Oct. 22-25. Trade exhibit hours are 9 a.m.-5 p.m. on the 22nd and 23rd. The show floor is open to the public on the 24th and 25th.

Nearly 230 exhibitors will attend iHobby this year, with almost 60 being first-time attendees.

Trade registration packets were sent to 20,000 dealers and distributors in the U.S. and overseas, and include buyer categories for specialty toy, game and computer stores. General merchandise and gift shops have also received registration information, along with hobby, toy and craft stores.

Now four years old, the Ticket to Ride promotion allows retailers to defray up to 100% of their travel expenses by ordering from vendors and earning coupons.

In its second year, the Dealer Pak promotion lets dealers purchase up to four sample product "paks" assembled according to HMA division categories (model railroading, plastic/die-cast models, R/C and general hobby). These are offered at low prices and are shipped to dealers after the expo.

Also back for its second year is the Hobby University business seminar track. This year, subjects include in-store demos, e-commerce and surviving in a rough economy.

All exhibitors and member attendees are invited to the 25th Anniversary iHobby Expo Party on Oct. 22 at 5 p.m. in the convention center.

On the 23rd and 24th, actor Michael Gross, famous for his role on the TV series "Family Ties," will be in attendance. A well- known model railroader, Gross will be signing autographs and walking the show floor.

Steve "Mongo" McMichael, former NFL star and Chicago Bear, will be on hand Oct. 24, driving R/C cars and visiting with attendees.

For a complete listing of events, please see the 2009 iHobby Expo Show Guide. Here are some of the highlights:

Thursday, Oct. 22
  • 25 Tips to Survive in a Tough Retail Economy, 7:30-9 a.m. - Retail sales gurus and iHobby regulars, Rich Kizer and Georganne Bender, talk shop and how to turn a difficult economy into successful sales.

  • Hobby University: In-Store Demos and Make & Takes Make Money, 4-5:30 p.m. - The HMA's Tom Grossman discusses making your store a community destination and building your customer base.

  • HMA/iHobby Expo 25th Anniversary Reception, 5-7 p.m. - Join other hobby professionals to celebrate 25 years of iHobby Expo.

  • Friday, Oct. 23
  • Hobby University: Today's Inventory Buying, 7:30-9 a.m. - Horizon Hobby's Bob Jacobsen talks about maximizing inventory dollars and increasing profits.

  • Retailers/buyers, distributors, manufacturers' representatives and media are eligible to attend the trade-only days of the show Oct. 22-23. Retailers and buyers can register for the show here.

    Booth space is still available; for information, contact Ed Lamphier at 949-786-8647.

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    Imports volume at lowest level since 2002; improvement predicted

    Import cargo volume at the nation's major retail container ports is expected to drop almost 19% this year vs. 2008, according to a release from the National Retail Federation and IHS Global Insight. However, some think traffic will moderate by the end of the year.

    Experts project a total of 12.3 million containers to be imported for 2009, a drop of 18.8% since last year and the lowest level in seven years.

    "The national recession has clearly been reflected in the volume of cargo U.S. retailers have imported this year," NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. "Numbers are down significantly, but the good news is that we're expecting to move from double-digit declines into the single digits by the end of the year. That's some light at the end of the tunnel that we're really looking forward to seeing."

    The 12.3 million 20-Foot Equivalent Units forecast for 2009 compares with 15.2 million TEU last year and is the lowest level since the 11.6 million TEU seen in 2002. One TEU is one 20-foot shipping container or its equivalent.

    U.S. ports surveyed handled 1.01 million TEU in June, the most recent month for which actual numbers are available. That was down 2% from May and 22% from June 2008, marking the 24th month in a row to see a year-over-year decline.

    Volume for July was estimated at 1.06 million TEU, while August is forecast at 1.09 million TEU and September is forecast at 1.08 million TEU. All three months are down 20% compared with last year. October, traditionally the peak month of the year, is forecast at 1.12 million TEU, down 18%. November is forecast at 1.05 million TEU, down 15%, and December is forecast at 1.02 million TEU, down 3.8% from 2008.

    The percentage decline in December is significant because it is the first single-digit decline of the year and compares with drops that have ranged from 15-32%.

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    NRHSA's "Link" now available online

    The latest issue of "The Link," the newsletter of the National Retail Hobby Stores Association, is now available electronically. The electronic issue is the first for the organization and features its latest news and retail advice.

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    National Z scale convention planned for 2010

    Micro-Trains Line Co. CEO Eric Smith has announced plans for a national Z-scale model-railroad convention next spring. The event will take place in Medford, Ore., where Micro-Trains is headquartered.

    The dates for the gathering are April 30-May 1, 2010. Some of the planned events are a tour of the Micro-Trains factory, a private trip to Medford's Railroad Park with a barbecue dinner, a public show day, clinics, contests and a dinner banquet.

    According to a release from Micro-Trains, show sponsorships and opportunities to donate products for prizes are available.

    Following events may be in different locations to allow the most attendance. While Micro-Trains is planning this year's event, a group of volunteers is being sought to organize the 2011 convention.

    For sponsorship opportunities or more information on the convention, contact Eric Smith. To be included in promotional media, reply before Aug. 21.

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    Don Anderson

    Don Anderson inducted to AMA Hall of Fame

    A very familiar face in the hobby industry has been enshrined in the Academy of Model Aeronautics Hall of Fame. Great Planes Model Manufacturing founder Don Anderson recently received the organization's highest honor from president Dave Matthewson.

    Anderson, of Mahomet, Ill., is currently senior vice president of product development at Hobbico, as well as president of Great Planes Model Manufacturing. His list of accomplishments also includes co-founding the Radio Control Hobby Trade Association (RCHTA) and co-organizing the first Chicago Toy & Hobby Show.

    His involvement with the hobby goes back to 1969 when he made his first flights and joined AMA. In 1981, he bought Bridi Hobby Enterprises and started Great Planes Model Manufacturing. After acquiring Andrews Aircraft Model Company, in 1984 he sold Great Planes Model Distributors to Clint Atkins who joined it with Tower Hobbies to form Hobbico Inc. In 1991 he sold Great Planes Model Manufacturing to Hobbico.

    Anderson has served in various offices with RCHTA and the Champaign County (Ill.) R/C Club. He was also a founding Member of AMA's Membership Marketing Committee; proposed a Park Pilot membership class within AMA and received the Presidents Award for these efforts.

    Hobbico Senior Manager of Service and Support and fellow AMA member Arthur Pesch nominated Anderson for the Hall of Fame. "Don's companies are directly responsible for many of the finest radio-control model airplane products available today," Pesch said.

    For his part, Anderson says, "I only wish everyone could have had the ride I've had!"

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    Possible Märklin buyers narrowed to five

    According to several German news sources, the field of qualified companies interested in purchasing model train manufacturer Märklin has been narrowed to five.

    Insolvency trustee Michael Pluta says all of the remaining suitors are Western European and have the financial capacity to operate Märklin on a long-term basis. He says a concrete offer could come as early as October for the beleaguered company, which also manufactures and sells large-scale trains under the LGB brand.

    While the company with the winning offer could take over the company this fall, Pluta says there's no pressure to get a deal done quickly, as financing for the company has been secured through 2009.

    A dozen other companies have also expressed interest in buying Märklin, however, theirs are not long-term outlooks for the company. Two more possible purchasers could enter the second round, but they would have to submit solid bids to be considered.

    Märklin filed for insolvency protection in February, owing about 600 creditors approximately $157 million (110 million Euros).

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    Survey details general hobby products' value to stores

    The General Hobby Division of the Hobby Manufacturers Association (HMA) recently conducted a research to assess the impact of the segment's products in terms of hobby store sales. The division includes a wide array of manufacturers whose products include tools; adhesives; paints, brushes and airbrushes; building materials; art, science, and craft activity kits; and publications.

    The initial findings indicate general hobby products are worth about $50,000 annually to a retail hobby store. Also, retailers can expect an average margin of 45% on these products.

    Midwest Products' Ed Rogala, HMA General Hobby Division vice-president and developer of the project, said, "A wide array of products are available for dealers to carry in their shops, and general-hobby products provide high-margin returns to the store owners." Additionally, general-hobby products, often lead customers to buy staple items in the radio control, model trains, and plastics/die cast categories.

    GH Division manufacturer members, as well as some non-member companies, were surveyed on the preceding product categories in the research project. They were asked to estimate the annual retail sales value of their products to hobby stores, how any lineal feet they would recommend be devoted to the products in a store, the margin, and the expected annual turns.

    Only 36% of the 76 members of the division responded to the survey, a number Rogala hopes to see increase in the future.

    Other findings of the survey:

  • General hobby products require on average 37.5 lineal feet in a typical hobby store. Many of the general hobby products sold today are blister paks and kits, easily displayed with other mainline hobby products or other general hobby accessory items. From a lineal foot perspective, General Hobby products supply $1,150 of sales per lineal foot per year.

  • The average turn for all general hobby products is 6 times per year; however, adhesives and tools turn 7-8 times annually. Retailers can expect to make sales margins of better than 45% on general hobby products annually. GH products generate $4,791 per month and $2,155 margin dollars per month.

  • For a copy of the The Value of General Hobby Products in Hobby Retail Stores, visit the HMA's Web site or call 973-283-9088.

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    Paizo and Reaper enter partnership

    Paizo Publishing and Reaper Miniatures have entered into a partnership that will see Reaper produce monthly metal miniature releases to support Paizo's new Pathfinder Roleplaying Game (see Paizo's new core rulebook sells out). The line is set to debut this fall, with miniatures representing characters and monsters from the full line of Pathfinder products. The miniatures will be available through regular hobby distribution channels.

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    MRC is looking for retailers to sponsor Ninco regionals

    Bob Lewen, MRC's marketing director, wants stores to sponsor regional slot-car races in the U.S. in support of the Ninco World Cup Super GT.

    Dealers are to conduct the races in compliance with published Ninco rules, and can charge racers an entrance fee (but are not required to do so).

    MRC will supply trophies to the top three racers from each regional event, who, in turn, are eligible to race in the U.S. Nationals at Sling Shot Speedway in Lawrence, Ga.

    The top three racers from the U.S. Nationals will become Team USA, and travel to Europe to compete against other international teams in the World Cup Super GT event. An appropriate racecar, spare parts, airfare and hotel accomodations will all be provided by MRC to Team USA.

    The location for 2009's World Cup competition has not yet been named.

    To sponsor races or get more information, contact Mr. Lewen at MRC.

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    Athearn switchers from Atlas?

    Subscribers to Atlas Model Railroad Co.'s e-newsletter got a bit of a jolt earlier this week then they saw HO scale Athearn SW1500 switchers for sale at blowout prices. And no, it wasn't a mistake, but it did generate plenty of buzz on the Internet's model railroading forums.

    The explanation turned out to be far simpler than some of the conspiracy theories. According to Atlas, the switchers are from a project some time ago that never came to fruition. They were discovered in storage, and now the company is selling them to the public during a "Sizzling Summer Sale."

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    Paizo's new core rulebook sells out

    Ten days before the launch of its Pathfinder Roleplaying Game Core Rulebook, Paizo Publishing announced that the first print run of the book sold out, with all pre-ordered copies on their way to stores for an Aug. 13 release.

    The Bellevue, Wash.-based company said that pre-orders were more than five times greater than for any previous product in Paizo's seven-year history. Teh second printing is expected to arrive in November.

    The Pathfinder Roleplaying Game Core Rulebook is the first release in the Pathfinder Roleplaying Game line, built on Dungeons and Dragons 3.5 Edition. The book is a huge, with 576 pages and retails for $49.99.

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