TOPIC:

This happened on Thursday the 27th on June, TBH I a bit behind as I don't keep up with the news that often as it's no fun


Modelzone's website has been shut down, a visit shows the following:

"On 26 June 2013, Richard Michael Hawes, Nicholas Guy Edwards and Robert James Harding of Deloitte LLP were appointed Joint Administrators of Modelzone Holdings Limited, The Amerang Group Limited, Modelzone Limited and Amerang Limited (together the "Companies"). The affairs, business and property of the Companies are being managed by the Joint Administrators. The Joint Administrators act as agents of the Companies only and contract without personal liability. The Joint Administrators are authorised by the Institute of Chartered Accountants in England and Wales (ICAEW). All licensed Insolvency Practitioners of Deloitte LLP are licensed in the UK"

You can read the press release from Deloitte here ; this is the text:

Richard Hawes, Nick Edwards and Rob Harding, partners at Deloitte, have been appointed Joint Administrators to Modelzone Holdings Limited (Modelzone) and certain of its subsidiaries, including Amerang Limited (Amerang). Modelzone is the UK’s largest specialist model chain with over 26 years of knowledge and experience in the model market.

The Companies are headquartered in Lancing, West Sussex. Modelzone Limited operates from 47 leasehold retail stores and online. Amerang Limited is a wholesaler of toy and hobby trade products and operates from an 37,500 sq ft warehouse. Together the group employs approximately 400 staff.

Richard Hawes, Joint Administrator and partner in Deloitte’s restructuring services practice, comments: “Modelzone has historically been profitable, however in recent years the company entered into leases for new stores that proved to be loss making. This, coupled with the growth in online competition, has resulted in Modelzone generating losses over the last couple of years, which the Board of Directors has now concluded is unsustainable and sought the appointment of administrators.

“We are working closely with customers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.

“Amerang is a profitable business, but the directors were forced to seek the appointment of administrators to protect the value of the business following the administration of Modelzone, its sister company. Amerang remains profitable and we will continue to trade as normal while we seek a buyer for all or parts of the business as a going concern.”

During this time gift vouchers will be honoured towards 50% of the purchase of goods.

Note the last line about gift vouchers - not good at all if you're holding any, but better than nothing - a lot of retailers in the same position recently haven't been honouring them at all.


News reports (for instance here at The Guardian) just confirm the above, including the website closure. That bit seems bizarre to me - but plausible, sadly - MZ's business model must have been right out there if they weren't making money off internet sales.


Note that "Administration" does not necessarily mean the end of Modelzone (that would be "Receivership"), but it's definitely brown trousers time for them. Obviously I don't know the ins & outs of the situation, but job loses & a lot of store closures seem very likely, with an outside chance that a smaller number of shops could survive under a different owner.

To be honest i have always found Modelzone very limited in regards to stocking what i wanted apart from paint etc. They seem to have been winding down the Tamiya range they offered and have been moving towards toy grade stuff which is why i stopped using them and started ordering everything offline as its also cheaper than the prices they charged anyway.

Another one bites the dust Sad.
I was in the Milton Keynes shop just last weekend. Central MK is not a cheap location I would guess.

tamiya wrote:

To be honest i have always found Modelzone very limited in regards to stocking what i wanted apart from paint etc. They seem to have been winding down the Tamiya range they offered and have been moving towards toy grade stuff which is why i stopped using them and started ordering everything offline as its also cheaper than the prices they charged anyway.

I know where you're coming from (I never bought anything from Modelzone, depsite there being one quite close) - no bricks & mortar shop can really do particularly well with range, or compete on prices with t'internet ... I just think it's a bit sad that a UK company with roots going back to the 1930s (and occupying a lot of the old Beatties sites - which I never purchased from either, but I know a lot of UK Tamiya RCers have fond memories of) is probably going to go kaput ... I also feel bad for the people at the coal face, who through no fault of their own are going to be out of a job.



That said, if a retailer doesn't deliver what people want at the prices they want, then they are going to fail in the long run

Martin wrote:

Another one bites the dust Sad.
I was in the Milton Keynes shop just last weekend. Central MK is not a cheap location I would guess.

I don't think any retail site is going to be cheap There is a wider issue though - & that's the number of UK retailer chains that have gone bust due to quarterly rent payments - multiply a lot of expensive sites by 3 months rent (in advance) & you've got a recipe for toppling companies that might have hung on otherwise.

30% off paint at the moment

I wonder if a good business model might be to open concessions in places like Toys R Us??
This works with clothes shops - why not hobby shops?
Would give the Dads something to look at while the kiddies are looking at Barbie etc at least...

Aren't there many r/c or modelshops in the UK?
Here in germany is a real hype about helicopters & trucks and cars are only a sidekick but better than none. People are buying RTR at amazon and bash them around instead of professional building, setup and driving. I've talked about this topic with my fav shop in Essen.
Kids don't waste time with scale models. Online Videogames are more important. They only have customers with high average age. At every corner you have a "gamestop" store, also killing serious gaming business.

Martin wrote:

I wonder if a good business model might be to open concessions in places like Toys R Us??
This works with clothes shops - why not hobby shops?
Would give the Dads something to look at while the kiddies are looking at Barbie etc at least...

It's a thought ... I can't sat I've spent an awful lot of time in Toys R Us, but IIRC the one thing they don't have is plastic model kits & RC cars that need building before you can use them ...

funkindemup wrote:

Aren't there many r/c or modelshops in the UK?
...

I don't have an encyclopaedic knowledge of the UK model shop business sector, but in general I'd say shops specialising in RC are exceptionally rare, there aren't that many model shops, but there are a lot of toy shops.

Model shops - which tend(ed) to be independent, rather than part of a chain - I would say are in decline, their narrow focus is (was) great for enthuisiasts, but not so great for making the rent Of the three genuine model shops in my area I remember from my youth, only one - Model Junction, in Bury St Edmunds (RC, trains, kits) is still going. The other two - The Signal Box, in Linton (just trains), and R&D Models (trains, kits, limited RC) are both gone.

Toy shops on the other hand, have broader appeal and are still doing OK - but have less of interest for model & RC fanboys. ToyMaster (I think) is a particularly (or peculiarly ) British thing - their shops tend to have three sections - toys, models (including some RC) and bicycles

AFAIK it's a buying group rather than a chain, most of their shops seem to retain the name of the shop (locally, Moons in Newmarket, City Cycle Centre in Ely, Starlings in Bury St Edmunds) somewhere in the (heavy) branding.


Beatties were a proper model shop IMO, Modelzone (I thought I better mention them, given the thread title ) I think were getting a bit more toy like.