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Industry News - October 2009

Published: August 28, 2009

Obituary: former LGB head Rolf Richter


Rolf Richter, 54, former managing partner of Ernst Paul Lehmann Patentwerk - the original manufacturer of LGB trains, died Sept. 25 in an auto accident in Bavaria.

Richter was trained as an attorney, but took a management position at Lehmann in the early 1980s when his father, Wolfgang Richter - the co-creator of LGB, was ill.

Rolf also spent a portion of his youth in the U.S. as an exchange student, and while at Lehmann, he - together with his cousin, Johannes Richter - guided the international growth of the "World of LGB," introducing hundreds of advanced garden railroading products for North America and other international markets.

Rolf is survived by his father, Wolfgang; his wife, Sigrid Hofmann-Richter; and his children, Cathrin, Cai and Konstantin.

A burial service was held in the Nuremberg area. In North America, condolences may be sent to the family via: The Sun, 40 W. Main St., Hummelstown, PA 17036.

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Märklin investor goes after $44 million from consulting firm


The investment group that purchased Märklin in 2006 in the wake of the German model railroad manufacturer's insolvency is looking to recover almost $44 million from an international consulting firm that provided restructuring advice on the transaction. The case could set a precedent in German law.

According to the German business publication Handelsblatt, Kingsbridge Capital, Märklin's ownership group, has retained legal counsel in its bid to get the money - the loss since the consulting firm was hired - back from Alix Partners.

The law firm representing Kingsbridge said it could not comment on the matter. The consulting firm says it has received a claim for arbitration, but issued the statement, "Alix Partners sees no basis for a claim," and says it stands behind the work done in regard to Märklin, Handelsblatt reports.

Handelsblatt reports there is no known case of a business consultant being sued for complete failure of an investment in Germany, at least not for this large a sum.

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Faller receiver crafting plan to get company out of bankruptcy


The interim receiver appointed in the Faller bankruptcy thinks the company has a future, according to a release by the German model railroad structure and scenery manufacturer.

Dr. Volker Grub said believes Faller can restructure itself into a sustainable, growing company. He says the Faller name wields comparable marketing clout to companies like Märklin, and even though sales figures have decreased, the scenery maker is still the "undisputed market leader for model railways decoration."

Reorganization will mean radically modernizing the company's production processes and manufacturing plants, Grub states, which means a right-sizing of personnel and facilities. He adds the process will be difficult, and shareholders, employees, trade union, customers, banks, pensioners and other creditors will have to cooperate in the task. "It will be unavoidable to dismiss some staff," the release states, however, production will remain in Gütenbach, where the company is headquartered.

Grub's says he's in the process of submitting a financial rescue plan intended to settle the outstanding $13 million in liabilities. He wants to submit the plan to a vote of the creditors, which may allow Faller to be out of bankruptcy in 2010.

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HMA looking for companies to go to Nuremberg Toy Fair


Representatives from the Hobby Manufacturers Association will be attending the Nuremberg Spielwarenmesse Toy Fair in February 2010, and are looking for companies interested in exhibiting in the organization's show booth.

The HMA presented a US Pavilion at the 2009 show. Eleven member companies joined HMA in Germany, gaining exposure to the global market.

In 2010, HMA will have has 45 square meters of space, up from 35 this year, in Hall 7 (general hobby hall) of the Toy Fair. Space in the booth is offered to interested members at a savings from normal rates. According to HMA Executive Director Pat Koziol, "The booth will be a shared opportunity for members to exhibit their promotional materials, company catalogs, some product displays and banners in the space." Shipping of products and catalogs will be handled by individual exhibitors and not as a joint shipment through HMA.

Space is available on a first-come, first-served basis. For information or reservations, contact Ed Lamphier.

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Amazon.com making hobby push


Internet retail giant Amazon.com is now selling hobby products directly to consumers and, according to industry sources, is actively looking to substantially build its hobby-product selection.

Hobby products and games have been available through Amazon.com for some time, primarily through third-party sellers affiliated with the site. This new initiative will allow Amazon.com to fulfill customers' orders directly from its 20 warehouses across the U.S.

A manufacturer's representative that has Amazon as a client says the e-tailer is looking to stock product in depth and is working with hobby manufacturers and distributors to increase offerings ahead of the holiday buying season.

He says Amazon's move is based on data indicating demand for the products, and that the Internet retailer has a "long-term vision" that's not based on low-price competition.

He added the marketing and information Amazon can put behind the products can be beneficial to local brick-and-mortar retailers, as many shoppers research products on the Internet and actually buy locally.

Over the last year, approximately 80 million customers have reportedly made purchases via Amazon.com.

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HMA elects new board officers


Michael Bass has been elected to serve his first term as president of the Hobby Manufacturers Association (HMA) Board of Directors. Also elected to their first terms as officers are Mark Schwing, who will serve as vice president, and Hal Miller, who will serve as secretary/treasurer. The board elected its officers for the 2009-10 membership year at its August meeting.

Bass represents the Plastics & Die Cast Division Council on the HMA Board. He was vice president of the board in 2008-09, served on the HMA Show Committee and was the legislative liaison for the association. He is president of Stevens International/Trumpeter Models in Magnolia, N.J.

Schwing represents the Radio Control Division of the board. He also serves on the Show Committee and as president of the Radio Control Division Council. He was former president of the Radio Control Hobby Trade Association and was a member of the Unification Task Force leading to the formation of the HMA. He is president of Electronic Model Systems, Yorba Linda, Calif.

Miller represents the General Hobby Division Council and serves on the Show Committee. He is editor of Model Retailer, Waukesha, Wis.

The immediate past president of the board is Frank Ritota of Model Rectifier Corp., Edison, N.J. He continues to serve on the board. The board of directors also includes Bud Reece (Bachmann Trains), Chuck Harransky (MMD-Squadron), Shawn Spiker (HiTec RC), John Smith (Iwata-Medea) and Jeff Setzer (Trains & Lanes), the National Retail Hobby Stores Association representative to the HMA.

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Visit Military History Weekend


Historians, wargamers, modelers and others will want to attend the first Military History Weekend Oct. 17-18 at the Hospitality House in downtown Williamsburg, Va. W. Britain, producer of toy soldiers and military miniatures, has teamed with Osprey Publishing and Casemate Publishing to organize the event, partly to commemorate British General Cornwallis' surrender to the American Revolutionaries at Yorktown, Va., Oct. 19, 1781. The organizers plan to make this an annual event.

"We have felt for a long time that fans of military history need an event that bridges the different segments of the hobby," said Richard Walker, general manager of W. Britain. "In the one corner, you have 'metal heads' like me who paint and collect toy soldiers. In the other, you have Ph.D. historians who chase down things like the names of General Washington's bodyguard. And in between, you have re-enactors, war gamers and armchair historians. There are plenty of shows that serve each of these groups separately. We hope that our event will be the kind of big tent under which everyone can come together."

Larry Weinsdorf, show organizer, said the event will be geared toward the entire family. A tranquility suite with chocolate, wine pairings and a full English tea is one of the offerings. Kids can learn how to paint toy soldiers and build military models at a make-and-take area. Book publishers, toy-soldier dealers, sutlers (those who sell gear for re-enactors), radio-control-vehicle dealers and military memorabilia merchants will sell military history-related products.

Non-retail-related features will consist of vintage World War II-era military vehicles, living historians and several WWII veterans, including a member of the "Band of Brothers." In addition, a military-relics analyst will be on hand each day to evaluate memorabilia. Attendees are invited to bring one or two heirlooms (no guns or explosives). Jonathan Gawe, author of "Finding Your Father's War," a book about researching archives, libraries, veteran associations and other sources, will provide tips on how attendees can research their own ancestors' military service.

Besides Osprey and Casemate, Concorde Publishing - which specializes in how-to books that aid modelers, painters and war gamers - will have a representative in attendance.

Attendees are invited to participate in a dinner gala Saturday evening (Oct. 17). Col. Edward D. Shames, a veteran of the 101st Airborne who was at the WWII battles of D-Day, Market Garden and the Bulge, will give the keynote address. In addition, W. Britain will distribute free custom figurines. There will also be a silent auction during the gala. Tickets for the event are $46 per person.

Entry for noon to 6 pm Saturday and 10 am to 4:30 pm Sunday is $5 for adults and families (up to six people). Entry fee is good for both days. Admission is free for children under 16; veterans and active military personnel; and Osprey and W. Britain club members. More information about the event, and advance ticket purchases, can be obtained at 888-771-5576 or e-mail W. Britain.

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German structure maker Faller declares bankruptcy


According to multiple German media sources, model railroad structure manufacturer Faller GmbH has declared bankruptcy. The company, headquartered in the Black Forest town of Gütenbach, employs about 130 people. An attorney has been appointed provisional liquidator.

Faller, started after World War II, is run by the third generation of the Faller family. It has been facing a tough time financially since 2007, sources say.

Faller products are imported to the U.S. by Wm. K. Walthers. The German company's product line includes model structures and the Faller Car System, which allows scale vehicles to drive on simulated roadways.

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Bob Wilke

Wilke appointed HobbyTown USA president


HobbyTown USA has announced the promotion of Bob Wilke as president of the company. He has served as senior vice president since 2000. HobbyTown USA co-founders Merlin Hayes and Thomas Walla will continue to serve on the company's board of directors.

Wilke, with partner Todd Anderson, bought a HobbyTown USA franchise in 1987 and opened a store in Fort Collins, Colo. Anderson currently serves

as HobbyTown USA's VP of operations. Following the sale of the Fort Collins store, Wilke joined the HobbyTown USA's Lincoln, Neb. home office in 1992. The Fort Collins store remains open today, operated by Gary Kolm.

In 2005, Wilke was selected to the Top 40 Under 40 by the "Lincoln Business Journal" recognizing outstanding young area entrepreneurs and business owners.

HobbyTown USA is the largest nationwide hobby industry franchise, with 172 stores open or under development in 41 states.

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Gen Con good for publishers and retailers


More than 27,900 unique visitors attended Gen Con 2009, Aug. 13-16, which delivered some unexpected moments and a handful of interesting products.

On the exhibit floor, attendees seemed more free with their money than many exhibitors anticipated. Game lovers picked up the latest releases from their favorite companies, as well as early releases from several exhibitors.

Woodland Scenics showed its landscapes, buildings, and terrain-making products, emphasizing how its products fit into games of all types. Although most of its displays focused on miniatures, many roleplaying gamers showed interest as well. Hobby stores can capitalize on this trend as more roleplayers create elaborate displays to bring their games to life.

Wells Expeditions received a strong response from both collectible miniatures gamers and classic miniatures players with its new Arcane Legions game. The game follows the classic fantasy miniatures style of play, with multiple miniatures on a single movement tray.

For retailers, Arcane Legions cleverly mixes both the pre-set and collectible purchase models, appealing to pretty much every prospect interested in miniatures gaming. It also reduces the number of SKUs a store needs to stock in order to carry the game successfully. Since the army units are unpainted, retailers can use the game to boost paint and paint supply sales, while also engaging customers with painting events and contests.

Other highlights of the show included new releases from Bucephalus Games (Dogfight, Kachina, and Michelangelo), Catalyst Game Labs (Balance of Power, Leviathans, and Merchants), and Fantasy Flight Games (expansions for Battlestar Galactica and Battlelore, Middle Earth Quest, Penny Arcade: The Card Game, and Rogue Trader).

Trade Day, Gen Con's annual training, demonstration and discussion day for retailers, librarians and teachers, opened Gen Con's schedule again this year. About 100 people participated in the event. The day included seminars on games in education, marketing through social media and improving profit in retail stores. The afternoon's demonstration session gave attendees a chance to get their hands on games from event sponsors.

The day's capstone panel presentation by representatives from retail, distribution, manufacturing and education delivered some of the best information of the day.

Retailers wanting to get games into schools learned the value of working with the "media specialist" (the person that we used to know as the librarian) at each school. Educators and librarians also explained the bidding and sourcing process, including how local stores can beat online discounters by including "local delivery, set-up, and training" as part of the Request for Proposal process. At the same time, educators and librarians heard how retailers can help them design and deliver engaging programs and find games to match their requirements. - John Kaufeld
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