HobbiCo / Great Planes / Tower Hobbies

[Robbob]

Originally Posted by JatoTheRipper

I would agree. Financial crashes typically don't come from one mistake nor do they happen overnight.

What do you mean by Sears of the RC world?

I don't hate companies for protecting their intellectual property. Patent scopes are so narrow that there are often easy and legal ways around them.

Sears is a dieing company. Big in their day, every house hold had a sears catalog. Bad business decisions made, poor economy, publics shift in online shopping. I use to like getting the towers mags in the mail, now I just toss them because I already know I can get the same price or better from my hobby shop or other online places.

[JatoTheRipper]

Originally Posted by Robbob

Sears is a dieing company. Big in their day, every house hold had a sears catalog. Bad business decisions made, poor economy, publics shift in online shopping. I use to like getting the towers mags in the mail, now I just toss them because I already know I can get the same price or better from my hobby shop or other online places.

Ah. I wasn't sure if you meant the Sears we all remember (great) or the Sears we, sadly, know now (one foot in the grave).

[Greatscott]

Originally Posted by Robbob

Sears is a dieing company. Big in their day, every house hold had a sears catalog. Bad business decisions made, poor economy, publics shift in online shopping. I use to like getting the towers mags in the mail, now I just toss them because I already know I can get the same price or better from my hobby shop or other online places.

Just read a good article on the downfall of Sears a couple of days ago. Back in the early 90's when Sears was still the 800lbs gorilla of retail, they had a chance to stave off competition like WalMart and Target. Sears, in its 100-year wisdom, didn't think they were a threat and basically ignored them. They kind of had the same attitude of American auto makers in the 70's and 80's, in that it didn't matter what they did, brand loyalty would bring their customers back.

[BJoe]

Originally Posted by c0bra

I’m wondering the same thing, just hoping that Tower/Hobbico will be able to survive to see traxxas come running back to them.


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Honestly, Traxxas was kinda smart for doing this, if they sell direct to the consumer at a normal price as well as to the shops at a rate less than these shops would have paid GP or Horizon as well as for more than those two would pay them, Traxxas makes more money and the shops make more money off the transaction, which means both should be better off in the long term. We can still buy stuff from shops that have accounts with Traxxas, or direct, so as long as the product is there, we have no loss in availabilty.

[Ditchrat]

Originally Posted by BJoe

Honestly, Traxxas was kinda smart for doing this, if they sell direct to the consumer at a normal price as well as to the shops at a rate less than these shops would have paid GP or Horizon as well as for more than those two would pay them, Traxxas makes more money and the shops make more money off the transaction, which means both should be better off in the long term. We can still buy stuff from shops that have accounts with Traxxas, or direct, so as long as the product is there, we have no loss in availabilty.

One thing that you have to consider, is that when you go 100% direct to consumer you lose a lot of the exposure that put you in that position.

Take away the hobby store and eventually you will get little new customers. Think about it if you are new you are not seeing adds in magazines, if you see the traxxas race cars you probably won't think slash(just rc dragster), you wouldn't even know the name to google it. So your right, there shouldn't be a change in availability unless they drive the LHS away on margin.

[mikemcE]

Originally Posted by Ditchrat

One thing that you have to consider, is that when you go 100% direct to consumer you lose a lot of the exposure that put you in that position.



Take away the hobby store and eventually you will get little new customers. Think about it if you are new you are not seeing adds in magazines, if you see the traxxas race cars you probably won't think slash(just rc dragster), you wouldn't even know the name to google it. So your right, there shouldn't be a change in availability unless they drive the LHS away on margin.

But they DIDN’T skip the dealers.
When the TrX4 was introduced the dealers were contacted directly and provided with a test sample, I drove one then, as that was when the Tower divorce had started. My LHS said it has to allowed them to sell cars and trucks, that’s where I can get one today at the same price as elsewhere



Hang up and Drive

[JatoTheRipper]

Originally Posted by mikemcE

But they DIDN’T skip the dealers.
When the TrX4 was introduced the dealers were contacted directly and provided with a test sample, I drove one then, as that was when the Tower divorce had started. My LHS said it has to allowed them to sell cars and trucks, that’s where I can get one today at the same price as elsewhere

My local LHS said Traxxas did kind of screw them in a roundabout way at least temporarily. He said Traxxas restricted his online sales as well as not giving him stock for the longest time. That was during the Hobbico/Traxxas divorce. The LHS owner wasn't informed on what was going on or when he'd be able to order Traxxas vehicles again.

[skinnyj]

I was just at my local hobby shop and they were in agreement that Hobbico is in trouble. That swayed me into buying an Ascender.

[EZCompany]

My question is, what does this mean for Axial? Aren't they owned by Hobbico? In the event Hobbico would go under I would hope a company would buy Axial with as popular as they have been. Not to mention the fact that Hobbico also owns dozens of other brands too. I guess it's just scary to think about who's going to be there to pick up the pieces should they fall, if anyone at all.

[EZCompany]

And another thought, I don't remember HPI making a big fuss over Redcat ripping off their rs4 chassis. Look at all of redcat's 1/10 nitros and then look at the rs4 and it's spin offs. You can't tell me they didn't have the rs4 in front of them while designing their trucks.

And that's not the only one. They even went as far as purple anodize on some of their buggies like the shockwave.

Pics are of HPI mt2, another mt2 ,redcat volcano and redcat shockwave.

[Robbob]

Originally Posted by EZCompany

And another thought, I don't remember HPI making a big fuss over Redcat ripping off their rs4 chassis. Look at all of redcat's 1/10 nitros and then look at the rs4 and it's spin offs. You can't tell me they didn't have the rs4 in front of them while designing their trucks.

And that's not the only one. They even went as far as purple anodize on some of their buggies like the shockwave.

No patent no foul ....... Traxxas proved that when they were copying others.

[skinnyj]

Originally Posted by EZCompany

My question is, what does this mean for Axial? Aren't they owned by Hobbico? In the event Hobbico would go under I would hope a company would buy Axial with as popular as they have been. Not to mention the fact that Hobbico also owns dozens of other brands too. I guess it's just scary to think about who's going to be there to pick up the pieces should they fall, if anyone at all.

I'm sure a good portion of the brands Hobbico owns have value and would get sold off the way Sears sold off Craftsman Tools. Even with that being likely, it scared me off Axial, as a change in ownership can create supply problems. According to my LHS, HPI is still going through this. My shop tells me they have some HPI parts that have been on back order for 6 months!

I wonder if the Axial parts debacle a few months ago was Hobbico/Axial stiffing their vendor and then having to find a new vendor to make their parts...

[JatoTheRipper]

Originally Posted by EZCompany

My question is, what does this mean for Axial? Aren't they owned by Hobbico? In the event Hobbico would go under I would hope a company would buy Axial with as popular as they have been. Not to mention the fact that Hobbico also owns dozens of other brands too. I guess it's just scary to think about who's going to be there to pick up the pieces should they fall, if anyone at all.

If HobbiCo ever fails they will sell of their assets via liquidation. I assume Axial is a profitable branch so they would surely get bought by another company.

[Brian Alderman]

Originally Posted by JatoTheRipper

They have to protect their new inventions. I can't hate Traxxas for that.







I do agree with this though. I think Traxxas is eventually going to start alienating distributors, dealers, resellers and, most importantly, customers. They are trying to make themselves into an entire ecosphere like Apple. You can use any product as long as it's Apple. I hate things like this and it's one of the reasons I hate Apple.



This seems to have started with their battery plugs. Traxxas will no longer sell them to other companies and as an individual I believe you can only buy them in packs of 2.

I can still buy Traxxas from 3 pretty good size distributors so maybe they should have paid their bill? Really the only thing that makes sense to me.


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[JatoTheRipper]

Originally Posted by Brian Alderman

I can still buy Traxxas from 3 pretty good size distributors so maybe they should have paid their bill? Really the only thing that makes sense to me.

[Ditchrat]

Originally Posted by JatoTheRipper

If HobbiCo ever fails they will sell of their assets via liquidation. I assume Axial is a profitable branch so they would surely get bought by another company.

Sometimes that's a good thing. When you have one or two brands holding back other brands, splitting them up gives them a chance to do their own thing and not support the failing ones.

Such an odd situation. Slightly fun to what if and speculate, but really does anyone know anything for sure.

How about a go fund me page, I'll by axial with someone else's money.

[Brian Alderman]

Originally Posted by JatoTheRipper

What? Doesn’t seem plausible to you? Why would companies like MIP, STRC, Traxxas, just up and quit doing business with a entity like Hobbico? Horizon went through a patent infringement deal with traxxas on the twin hammers and they still are in business together.

I also see that many coupon exclusions are in effect on a lot of things from multiple online retailers. Maybe these companies have put forth guidelines like dealers map policy and there’s some violations there? Either way it’s not good.


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[Ditchrat]

mystery solved

They are broke

Feds investigating Hobbico over deferred employee stock payments

Fri, 12/22/2017 - 7:00am | Ben Zigterman

Photo by: Stephen Haas/The News-Gazette
Hobbico Inc.'s corporate campus is shown Tuesday, Dec. 19, 2017, at 2904 Research Road, C.






CHAMPAIGN — After deferring employee stock-ownership payments last year, Hobbico is under investigation by the U.S. Department of Labor and its share value appears to have plummeted.
In a letter sent to former employee Nina Sibley-Richardson, the distributor of hobby products confirmed that it's under investigation.
"Due to Hobbico's failure to satisfy its repurchase obligations in 2016, the DOL started (an) investigation of the ESOP in early 2017," states the letter, which Sibley-Richardson shared with The News-Gazette.
"The DOL informed Hobbico of the investigation via (a) formal letter, but no subsequent activity has occurred since the letter was presented."
The investigation could take a while, according to a second letter Sibley-Richardson received, in late November, from the Department of Labor.
"This process can be very lengthy," it said.
In 2005, Hobbico's owners formed an employee stock-ownership program when they sold the company to the ESOP, which in turn distributed shares to employees.
ESOPs are designed to encourage employees to think like owners while also providing some tax benefits. Because of those benefits, companies must follow certain rules for how and when employees get their benefits, according to the nonprofit National Center for Employee Ownership.
At Hobbico, when an employee leaves the company, they're supposed to get reimbursed for their shares in the company five years after they depart.
Sibley-Richardson, who worked at Hobbico for more than 10 years and left in 2010, tracks the value of her ESOP account and receives an alert each week with its value.
It had been valued at just over $27,000. Then, on Nov. 17, she received an alert that the balance had plummeted to less than $5,000, a decline of more than 80 percent.
The company is valued once per year, Sibley-Richardson said.
"The share value in the ESOP is based on company performance, just as it would be if the stock market fell and your investments lost value," Hobbico wrote in its letter to Sibley-Richardson.
Hobbico officials declined to comment when contacted by The News-Gazette.
"Thanks for the inquiry, but we do not have a comment on the ESOP valuation at this time," said Howard Salazar, Hobbico's human resources director.

Sibley-Richardson was expecting to receive her ESOP payment in 2016, but Hobbico deferred that payment at the end of the year after operating expense and productivity goals weren't met by the company.
"It is expected that 2017 will also be a challenging year for the business," then-CEO Wayne Hemming wrote at the time in a letter to current and former employees.
Sibley-Richardson had been planning to use the ESOP check to put a down payment on a house. Now, she said, she's not expecting to receive anything.
"I probably won't ever see a dime of that money," she said.

[txbart]

Damn, they cant even afford to get their sign power-washed.

[BDR]

This is what happens when a company starts believing it's own hype

The world is littered with the corpses of past successful companies that have stopped innovating, and just sat on their collective arses and said "we done it this way for the last 30 years" , it's called progress.

Tower dies, stiff shit, some one will become the next big thing, then a little while later, another mob will come through and the cycles repeats.

As for Axial and the others, well they need a boot up the arse, another scx10 with a new body is not innovation, it is lazy business, the latest 'innovation'.......Honcho body on a scx10 II chassis for **** sake

IF Tower goes, Axial and the others will be sold off, let's just hope it aint to a investment banker group, and they can finally get back to shaking up the hobby again