Hornby runs out of steam as Olympic sales falter
Toymaker Hornby has warned that it expects to only break even in the current financial year following disappointing sales of its London 2012 merchandise.
The company, which produced a wide range of Olympic themed products including a Scalextric velodrome cycling set, said that sales would be lower than forecast as result of deep discounting by retailers and disruption to shipments from its major supplier in China.
Hornby sells its products through a range of major retailers as well as online at hornby.com.
In a statement, Hornby explained that retailers had purchased large quantities of Olympic merchandise from other suppliers and when faced with lower-than-expected sales had started discounting. The retailers then lost confidence in many categories of London 2012 merchandise and repeat orders for Hornby’s products were cancelled.
In addition, the company is also suffering "substantial" supply disruptions after its one of its major suppliers in China began rationalising its manufacturing facilities. The disruption is expected to continue for the remainder of the financial year.
Hornby said: "As a result Hornby believes it will not achieve its forecasts for the current financial year and, therefore, anticipate results will be approximately break-even for the financial year ending 31 March 2013."
Hornby’s net debt at 31 August 2012 was £7.8 million compared to £14.3 million a year earlier.
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