Is Tower Hobbies going out of business

[ajdragon]

Hi

Is Tower Hobbies/Hobbico going out of business. It seems like everything is either limited supplies, sold out, on back order, or discontinued, and there also seems to be a lot of brand closout sales too. Plus on top of that I read an article that say there sales where below expected for last year and they expect there sales to be even lower this year. If they do go out of business use ARRMA owners are screwed, parts are hard enough to get as it is.

Here is that article
http://www.news-gazette.com/news/lo...erral-payout-upsets-confounds-ex-workers.html

 

[Rchrdjrz]

Hi

Is Tower Hobbies/Hobbico going out of business. It seems like everything is either limited supplies, sold out, on back order, or discontinued, and there also seems to be a lot of brand closout sales too. Plus on top of that I read an article that say there sales where below expected for last year and they expect there sales to be even lower this year. If they do go out of business use ARRMA owners are screwed, parts are hard enough to get as it is.

Here is that article
http://www.news-gazette.com/news/lo...erral-payout-upsets-confounds-ex-workers.html

I really hope they don't go out of business. I just got into this hobby and it has turned my life around. This hobby is so amazing and fun. The things you learn from fixing broken rc's and getting to spend time outside with your family. But only time will tell.

 

[72Z15SS]

They have been around a very long time. One of the first I've seen advertising in the older magazines when I first got into the Hobby, They don't have a lot of stores like others do (hobbytown etc.) so I doubt they are going under. If they keep doing the huge discount coupons tho'???

 

[Schuey]

If Hobbico/Tower goes out of business .. consider the Rc Hobby Dead.. The chinese are stealing our designs and copying.. aka look at the clone Traxxas Slashes you can buy for 1/4 of the price ... Most Americans are cheap tightwads.. they don't want quality they want cheap.Heres an article that might shed some light on whats going on.. but i personally think they are in restructure mode.. my company went thru the same thing and we are a bigger company .. most big ones do this every so often when companies arent making sales quotas.

Hobbico's deferral of payout upsets, confounds ex-workers
Thu, 01/05/2017 - 8:00am | Ben Zigterman

CHAMPAIGN — On Saturday, Hobbico posted to Facebook a thank-you note to customers for making 2016 a great year.

The day before, it sent a message with a different tone to current and former employees.

"Hobbico has experienced many difficulties this last year, such as intensified competition and what appears to be a hobby-industry recession," Hobbico President and CEO Wayne Hemming wrote in a letter obtained by The News-Gazette.

"As a result, important sales, operating expense and productivity goals were not achieved. It is expected that 2017 will also be a challenging year for the business."

As a result of the rough year, Hobbico also announced in the letter several changes to its employee stock-ownership plan, a retirement system in which employees are given shares of the company, which are to be reimbursed after they leave.

It dates back to 2005, when then-owners Clint Atkins and Bruce and Jeri Holecek announced they were selling the company to its employee stock-ownership plan as a way to encourage employees to think like owners.

"Distributions that were scheduled to be made in 2016 from the ESOP to you and other terminated Participants will be deferred to a later date," Hemming wrote.

Two employees who left the company in 2010 and were expecting to receive their payment as a lump sum this past year now aren't sure when they'll get that money.

Tim Thilmony, who worked at Hobbico for over 10 years, said he has more than $50,000 wrapped up in the program that he was hoping to get back this past year.

Nina Sibley-Richardson, who worked at Hobbico for 11 years, was expecting to receive just over $27,000 from the employee stock-ownership plan.




"I was hoping to pay down debt and put a down payment on a house," she said.


Thilmony and Sibley-Richardson were supposed to wait five years to get their money back, and tried to do so in 2016.

Sibley-Richardson said she tried during the summer and kept waiting for the payment to arrive.

The financial group managing the plan "agreed it would be processed no later than Dec. 31," she said. "During November, I contacted them again, and they said it would be no later than Dec. 31. Then again Dec. 29, they said no later than Dec. 31."

She then received the letter from Hobbico and has been trying to get answers from Hobbico on what it means for her.

"The letter was very vague. The payments were deferred, but it doesn't say to what date," Sibley-Richardson said.

Hobbico did not return multiple calls for comment from The News-Gazette.

In its letter to current and former employees, Hobbico cited a "hobby-industry recession."

The model hobby distributor is the 12th-largest employer in Champaign County with 495 employees, according to the Champaign County Economic Development Corp. But that's down from a team of 700 in 2011.

While board members of the Hobby Manufacturers Association said that competition is indeed tough in the hobby industry, they didn't believe it was in a recession.




"It's pretty much been a flat market, but there is optimism for growth in 2017," HMA President Bob Wilke said.


"I don't see it as a recession," said HMA Treasurer Fred Hill, who also owns The Coach Yard, a manufacturer and retailer of model trains in California. "I haven't seen it with my business."

HMA membership has shrunk a little bit, but Wilke said that's mostly because it hasn't done a national trade show lately.

The industry is facing competition from manufacturers overseas, Hill said, since they sometimes steal designs and sell them directly.

"The American manufacturers design it," Hill said. "And the overseas manufacturers are copying them and selling direct. ... It's very frustrating."

The internet has also been a challenge for the hobby industry.

"Everyone had to make a big change and had to embrace the internet," Hill said. "Consumers just don't want to get in a car and drive to a store and shop."

Despite the challenges, Hill believes interest in hobby equipment is as high as it has been, with trade shows drawing thousands of attendees and drones gaining in popularity.

"Interest continues to grow," Hill said.

Hobbico was formed in 1986, when Atkins combined two companies he bought: Don Anderson's Great Planes Model Distributors and Bruce Holecek's Tower Hobbies, which was founded in 1971.

According to its website, Hobbico has 12 different facilities, including five in Champaign-Urbana and others in Germany, the United Kingdom, California, Colorado and Nevada.

 

[Steve]

The payment deferral is old news.
Hobbico, the parent company of Tower, Arrma, Axial, Futuba, Tactic and much more is a well run business.
But that's just it, it is a business that is affected by consumer trends in spending and of course the chinese competition, [the same dirty competitors who steal patents and allow gray market trash into our lives from all directions].
The chinese, [not capitalized intentionally] also farm shrimp, fish and more that knowingly has been fed it carcinogens and other bad stuff, using cheap [and again] known carcinogens as product extenders in toothpaste and so much more.
Hobbico has hit a bump in the road.
As far as the coupons go, they have this down pat, so I wouldn't hypothesize they do not know what they are doing.
The weather has turned, flying is back season in in all the snow-belt states.
On their stock of parts, sometimes containers get delayed or suppliers go out of business.
Assuming Hobbico owns the moulds, dies and other related tooling, getting their hands on the tooling to use in another shop can take time, maybe even a legal battle, ugh, attorneys...
They have weathered storms and IMHO, will weather this one.
Let's be positive and give them our support, as on my side of this issue, there is no place that I enjoy shopping at more than Tower.
And that includes Total Wine....

 

[Jlolley]

The Tower Traxxas supply is no better than Arrma.....Looking at other retailers they are out of the same Traxxas models so it is not just Hobbico/Tower/Arrma

Supply of complete RC vehicles