Hobbico files for Bankrupcy

[Jerry-rigged]

http://www.news-gazette.com/news/local/2018-01-10/hobbico-files-bankruptcy-layoffs-next.html

Now, who will step up to buy Arrma, Axial, and the sub brands that we keep hearing are profitable?

 

[chevys10zr2003]

Is there a dislike button?

 

[Jerry-rigged]

Oh, and as it was pointed out on RCG - this is chapter 11 - i.e. reorganization. Not Ch7 i.e. - sell it all and close the doors.

https://www.hobbico.com/company-news.php

They announced they are trying to sell the company.

 

[Trapper]

Damn.

 

[WoodiE]

I just got the email from Hobbico was about about to post this. Very sad news.

Hobbico announced today that we are filing for restructuring under Chapter 11 of the Bankruptcy Code and that we are pursuing a process to sell or restructure the company. It’s important to know Hobbico will continue to operate the business throughout the bankruptcy process. Numerous companies across a range of industries (automotive, airlines, etc.) use this type of filing as a tool to get costs under control, create stability and build platforms for growth.

Hobbico intends to use the bankruptcy filing and a possible sale of the business to reduce our debt, restructure our liabilities, attract new investors and position the company for future growth. We carefully evaluated this vs. a number of other actions and concluded this was the best path forward.

I understand that this may be difficult news to hear. Hobbico is one of the largest U.S. distributors of radio-control and general hobby products and our business has many strengths. At the same time, Hobbico has faced and continues to face many significant challenges.


Undoubtedly, there will be rumors covered in the media, social media sites and forums. I know you cannot control what your fans share or their discussions, I just hope you will help support us and the industry by being positive and stating the facts if need be. I’m here for you, so please reach out to me with any specific questions that are not answered in the attached release.

 

[digitaldude80]

Let's all hope Arrma keeps existing and that not too much people will be getting unemployed because of this....

 

[Aflan]

I am not to worried...I am wondering where this will go...Just my 2 cents, euro cents that is.......

That being said, i feel for the employees of Hobbico and all its subsidiaries (am I spelling that right?)...I have been where they are now...And its no fun...

 

[chris15005]

Great i just bought a Granite Mega it just shipped from Tower and will be here tomorrow guess the warranty is no good now ?

 

[Steve]

This is Kray-Zee stuff in the article:

• $10 to $50 million in assets
• $100 to $500 million in liabilities

How can those ranges be so large?

 

[Browneye]

Spend spend spend. Ask the accountants.
Same pkace GM was at - too many liabilities and not enough new markets and sales growth.
Ch11 is good - they’re likely to be able to reorganize and keep going. That is, if management is strong enough. JMHO

 

[Jerry-rigged]

Long term, I expect Arrma to be around. Short term (thru this summer?) I don't expect to see much change either. But that middle ground I worry about. After the CH11 really gets going, and for the first year of "NewCo", I worry we go get stuck like HPI folks the last year or two. With that in mind, I bought a small pile of spares from Ebay....

As an added bonus, now I have enough Kraton spares to wide-mod my Tyhon. hehehehehe....

 

[dpricenator]

Well I guess I am about to buy 2 cars worth of replacement parts for my Kraton.

 

[nulli]

I wouldn't be surprised if Arrma is the most profit making brand they have. I wouldn't be worried, yet.

 

[chevys10zr2003]

They very well may cut down some brands that they have but some of their brands I wouldn't be worried about. Axial, Arrma and Futaba I would bet a large amount of money on would be okay and bought out. HPI, Trakpower, Duratrax, Dromida, Revell, Monogram and Auqacraft I would also assume would be bought out and continue. I don't know about the other brands as I haven't heard of most of them. Tactic and Futaba could join forces as could Dboots and Duratrax. But overall, I'm not too worried about any of the well known brands.

 

[NITROMAN2000]

This is going to have a large ripple effect on our little nitch market of a hobby. Those companies that Hobbico owes a lot of money to will likely go down as well. That legal issue with Traxxas has costed them more than many expected.

 

[Jerry-rigged]

I don't think Futaba is a Hobbico brand. (I could be wrong). Over on RCG they are saying that Hobbico is just the USA distributor. Same for HPI. Duratrax - I didn't think they were a hobbico brand - why have 2 in house tire brands (they 100% owned dBoots). But who knows.

Some brands will be dropped for sure. The ones like Dromida with no IP, just rebranded Chinese cars, I would expect to go away. Good selling brands with IP (Arrma, Axial others) will stay around - they are money for anyone who buys them.

[pure speculation]
In the USA, LHS's seem to not be able to last but a few years. Internet sales has killed them. With Hobbico, I see it as three SBU's - The makers (Arrma and all) distribution (Great Planes - supplys the LHS) and direct sales - Tower. I suspect that, with LHS's unable to stay in business, how can GP stay profitable? I also suspect, the Maker brands with IP have been mostly doing OK. I have no idea where Tower stands, or if they will stay around. I guess I could see GP and Tower going away, and "NewCo" buying all the maker brands, and becoming a distributor to other on-line and LHS shops of these "maker" brands, and letting all that other 'stuff' (non-hobbico owned stuff) find other distribution channels.
[/speculation]

 

[chevys10zr2003]

I am not sure if Duratrax and Futaba are owned by Hobbico or not. I know that they are listed on Hobbico's website and at the bottom of each ones website they say "Hobbico Inc." But, again, I do not know the business layout myself. But yeah I don't know why they would need Durartrax and Dboots as well as Tactic and Futaba. Seems like money wasted doing the same thing if they are each owned by Hobbico.

 

[Trapper]

Futaba and duratrax are under the umbrella of hobbico along with axial and Arrma and great planes and tower hobbies along with others from what I've read

I think tactic is a waste if they own futaba tbh can easily make a entry level hobbyist futaba and close out tactic if they are even a real transmitter company

 

[Elk]

Hobbico distributes HPI, Futaba and O.S. in North America, the do not own them. The Arrma, Duratrax, and Axial brands (among others) fall under their ownership.

 

[Camo]

Mmm well !!! Dog eat dog