Industry News

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Industry News - June 2008

Published: May 14, 2008
New marketing VP at Walthers
Walthers has appointed Jim Glassford as its new vice president of marketing.

Glassford graduated from Western Michigan University with an MBA and received a bachelor of science degree from Central Michigan University.

Most recently, Glassford served as the executive vice president of sales and marketing for Kaytee Pet and Wild Bird Products. With more than 25 years of marketing experience in the pet supplies industry, he will be leading Walthers' marketing, new product developlment and publications and promotions teams.

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No response to NMRA challenge
The National Model Railroad Association has announced that Real Rail Effects has not responded to the NMRA's challenge of a patent awarded for Digital Command Control (DCC) with sound technology.

Real Rail Effects was granted its patent by the United States Patent and Trademark Office based upon its claim that the company invented technology for using sound with DCC. To protect its patent, Real Rail Effects subsequently filed lawsuits against some model railroad manufacturers that use DCC sound technology.

The NMRA, with the technical and financial support of a number of DCC manufacturers and hobbyists, filed the challenge stating that the patent was granted for technology that was already in existence.

Based on the NMRA's filing, an examiner at the patent office determined that the position of the NMRA had merit and compelled a new analysis of the patent. Real Rail Effects had two months to respond to the re-examination request.

The deadline to respond to the NMRA's patent challenge passed with no response from Real Rail Effects, attorney Robert J. Amsler Jr., who is representing the NMRA, announced on June 6.

The matter now awaits a decision from the patent office.
MRC exclusive distributor for Aoshima
Model Rectifier Corporation has announced its partnership with the Japanese plastic model manufacturer, Aoshima Bunka Kyozai Co., Ltd.

Originally established in 1923 as a full-scale airplane research institute, Aoshima began making wooden model kits in 1929. The success of those kits allowed Aoshima to expand its hobby production to now include science fiction items, miniature to large-scale plastic model cars, trucks, motorcycles, tanks, ships, waterline models and planes.

MRC expects that it will be ready to begin delivery of Aoshima's kits in August 2008.

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Silvergate Distributors to take over LGBoA distribution
As of June 1, LGB of America's distribution will be assumed by Silvergate Distributors, indicating a shift in focus and representation of a broader range of hobby products.

According to a company release, the company is opening a new office in San Diego with "enhanced infrastructure" that will allow it to better serve customers. Silvergate will also have a Freehold, NJ warehouse facility.

LGB of America will continue to exist, but "distribution of existing inventory, current lines, and new product lines will transfer to Silvergate Distributing," the release said.

The new company will distribute PIKO G- and HO-scale trains and accessories including the line of UV-resistant PIKO G-Track. New product lines include Motorart die-cast vehicles and the newly acquired line of Hillman's RailClamps. Other products are in the works. More information will be available when the company's Web site, www.silvergatedistributors.com, goes live June 1.

Customers can still call 858-795-0700 or the company's 800 number for support. For updates regarding availability of LGB products, visit the News section of www.lgboa.com.

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HMA releases hobby survey figures
A total of $1.2 billion in hobby products sold last year, according to the recently released Hobby Manufacturers Association's 2007 Size of the Model Hobby Industry Study. Data for the document was collected last fall.

The study broke the wholesale amount into four segments, with the model-railroad category making up 32.1%, representing nearly $410 million in sales. Next was radio control at 28%, or about $358 million, followed by plastic and die-cast (20.3%, $259 million) and general hobbies (19.4%, nearly $248 million).

Frank Ritota, HMA president, said 2007 sales were estimated to be $1.274 billion, compared with actual sales of $1.92 billion in 2006.

The HMA Board of Directors released the findings of the study, conducted and compiled by the University of Louisville School of Business via Survey Monkey, an online questionnaire survey tool.

"We received an astonishing 52.9% participation rate from among the surveyed companies of HMA," said Bob Staat, immediate past president of HMA who oversaw the research project.

"The last time an industry survey was conducted by (the Radio Control Hobby Trade Association) in 1999, the participation rate was 14.3%," Ritota said.

Distributed to HMA members and participating businesses, the report includes demographic information on consumer usage, advertising and promotion tips, and the scope of hobby products worldwide.

"Hobby manufacturers and distributors are guardedly optimistic about the future of the industry," Ritota said. He added 50% of the respondents said their position in the industry was "one of growth with steady sale increases created by an ability to compete in the market."

For more information about the study, call the HMA office at 973-283-9088 or visit www.hmahobby.org.

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Multiple factors may fuel nitro price hike
With new restrictions for the storage and transportation of hazardous chemicals implemented by the Department of Homeland Security, an increased Chinese export tax and hard-to-get raw materials, it looks as if the price of nitromethane-based fuels is on the rise.

"In short, nitromethane is very tight globally," said one leading manufacturer of R/C fuels. "With the price of Chinese nitromethane increasing, I can only guess that Angus, the domestic producer of nitro, will also increase [its] price."

In November 2006, Angus Chemical, a subsidiary of Dow Chemical, announced that it would no longer supply nitromethane to the National Hot Rod Association (NHRA), citing safety concerns and "increased use of imported and unmonitored material," making the R/C industry Angus' focus for nitro used as a fuel additive.

"I feel that in the very near future, your smaller fuel manufacturers that are purchasing their nitromethane through distributors or from China are going to without supply," the R/C fuel manufacturer went on to say.

According to another industry insider, increased restrictions on transport and storage of dangerous chemicals by the Department of Homeland Security have driven costs up across the board. "The new restrictions have put a crimp in nitro," he said. "The costs on the storage facility alone are huge." At the wholesale level, he says R/C nitro fuel could see increases of $3 to $5 per gallon.

Still, industry sources say that the cost of nitromethane is 50% of its price in 1991, while methanol is up more than 300% during the same period.
"Modelers are going to continue to use nitromethane when it is available," the fuel manufacturer said. "They may use less and they may not have as many fuel brands from which to choose, but they are still going to demand the extra performance nitro exhibits."

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Horizon buys German distributor JSB GmbH
Horizon Hobby, Inc. has acquired JSB GmbH, a distributor of radio-control hobby products based in Elmhorn, Germany. Renamed Horizon Hobby Deutschland GmbH, JSB's former owners, Jörg Schamuhn and Birgit Schamuhn, will remain at the helm, with guidance from Horizon Hobby's Director of European Operations, Sebo Dapper.

Horizon first moved into the European market with the acquisition of UK-based Helger Racing in 2004, which was renamed Horizon Hobby UK Ltd. in 2007. Horizon Hobby Deutschland is intended to bring expanded resources, scale and experience of Horizon's global operations to mainland Europe. Horizon doesn't foresee the acquisition as having an impact on the products and services offered to its U.S. customers.

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NRHSA board adds 3
The National Retail Hobby Stores Association elected two new members in April to its board of directors.
New to the board as directors are Melissa Truxillo from Big Boy Toys in Lafayette, La.; Wade VanRyzin from Galaxy Science & Hobby, Appleton, Wis.; and Bob Muller from eXtreme Hobby Zone, Winter Park, Fla.
Other positions were elected as follows (positions held last year in parentheses):

  • President-Art Schaefer, Schaefer's Hobby Shop, St. Louis, Mo. (President)


  • Vice President-Cindy McFarlane, Al's Hobby Shop, Elmhurst, Ill. (Secretary)


  • Chairman-Charlie Hirschberg, Nassau Hobby Center, Freeport, N.Y. (Vice President)


  • Treasurer-Jeff Setzer, Trains & Lanes, Easton, Pa. (Treasurer & NRHSA Rep to R/C Council and Show Committee)


  • Secretary-Dave Sherman, Athens Hobby Center, Athens, Ga. (Director)


  • Directors-Jim Pepperdine, PM Hobbycraft, Calgary, Alta. (Director); Steve Noel, HobbyTown USA, Orland Park, Ill. (Director). The HMA representative to the board is Ed Rogala of Midwest Products.


  • Completing terms on the board are Fred Hill, The Original Whistle Stop, Pasadena, Calif. (Director & NRHSA Representative to HMA); Jan Throne, Walt's Hobby Inc., Syracuse, N.Y. (Chairman); and Tom McComber, Pegasus Hobbies, Montclair, Calif. (Director).

    Janet Svazas is the organization's executive director; Holly Lundgren is administrative director.

    For more information on NRHSA, call 630-510-4596 or visit NRHSA's Web site.

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    Chatzky keynotes CHA
    The Craft & Hobby Association (CHA) has announced Jean Chatzky as the keynote speaker for the 2008 CHA Summer Convention & Trade Show.

    Chatzky is a nationally recognized financial expert and author of Make Money, Not Excuses, a Wall Street Journal and New York Times best seller. In her presentation, Chatzky will provide financial insights for the international craft and hobby industry. She will give her presentation on Thursday, July 17 at the Donald E. Stephens Convention Center in Rosemont, Ill.

    For more on the CHA Summer Convention & Trade Show, visit www.chashow.org.

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    Obituary: Felix V. Bass, 1927-2008
    Hobby industry distribution pioneer Felix V. Bass, 80, died April 20, 2008 after a battle with diabetes and associated complications.

    Bass was born in Vienna, Austria, and in 1938 escaped with his parents as the Nazis swept through the city rounding up its Jewish citizens.

    After residing in Liechtenstein, Switzerland, France and England, they came to the United States via Lisbon, Portugal, in late 1939. Able to bring only what they could carry, they settled on a poultry farm in Vineland, N.J.

    Felix later met and married Inge Berger. The couple moved to Haddonfield, N.J., a suburb of Philadelphia.

    An accountant by trade, one of Felix's hobbies was stamp collecting. He would purchase stamp collections at shops and auctions, keeping what he needed and packaging and selling the rest to hobby shops. He realized there was an opportunity to sell other hobby products on those visits.

    Family members loaned him and Inge money to start their distribution business, and soon the basement of their home was filled with various hobby products that Felix sold on his hobby-shop rounds.

    They outgrew the limited storage space in the basement and moved to a home in Voorhees, N.J. , which included an oversized garage for their growing hobby distribution business, by then named Felix V. Bass & Co. Inge became the office manager of the venture.

    As Bass & Co. continued to grow, Felix took on a partner and moved the business to an industrial park in Westville, N.J. In 1980 Felix sold his share of his business to his partner to open a similar business with Inge and son, Michael, as partners.

    The new company, Stevens International, combined Mike's middle name and the international element of the new business. The company originally imported model-railroad items and was headquartered in the basement of Bass's Cherry Hill, N.J. home.

    Stevens expanded with model kits and in 1982, moved into its current location in Magnolia, N.J. Fluent in German, Felix and Inge attended the Nuremberg Toy Fair for many years, using their bilingual abilities to negotiate distribution rights for various hobby lines not previously sold in the U.S.

    Felix continued to be active in Stevens International, scaling back his hours in the 1990s, but worked a few hours a week until late 2007.
    He is survived by wife, Inge, daughter Ruth (John), son Michael (Debbi) and four grandchildren: David, Julia, Pamela and Alan.

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