Ye Olde Rocket Forum - Bad news (ESTES)

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- - Bad news (ESTES) (http://www.oldrocketforum.com/showthread.php?t=17070)

This and the comments are worth the time to read,
http://www.uavexpertnews.com/2017/0...iants-flounder/

Quote:

Merchants Are Suffering
Merchants have gotten the short end of the stick as consumer trends and shopping habits change, and manufacturers squeeze out distributors
...
Each industry is different, but in the US most customers simply do not understand (or care) how businesses work. Most are unaware that retail hobby and electronics stores operate on profits that have been driven to less than a 20% gross margin. What this means is that a typical beginner model airplane that might sell at a store for $99.99, cost the store $79.99. But to really get the full picture you have to do all of the math. For instance that model aircraft product that sells for $99.99 at the store (and online) has the following cost associated with it.

Quote:

Originally Posted by modeltrains

here's Hobbico's own web post on the matter, https://www.hobbico.com/company-news.php

The press release is pretty clear that they want to keep the company running:

"Under the process afforded to us under Chapter 11, we hope to reach an agreement with our creditors that will allow us to implement a restructuring plan that fully addresses our financial challenges while simultaneously identifying a prospective buyer that shares our vision of providing the best possible outcome for our employees and the future of Hobbico."

The Estes brand, model rocketry, and by extension the enthusiasts who love the hobby will be fine, but there will be a period of uncertainty through the Chapter 11 process.

The Estes brand is unique from almost any other aspect of the Hobbico product line. Brand name recognition and an established distribution network combined with a unique technical ability to supply rocket motors to an established marketplace make them different than almost any of the other Hobbico businesses. This will ensure their survival and the livelihood of their employees.

Estes is almost the only portion of the Hobbico operation that doesn't face stiff foreign competition. They have already jumped through all the expensive regulatory hoops that any competitor would need to surmount. There is an established and predictable demand for their products within the marketplace. Model rocketry is not a fad, it is an established educational hobby with a track record stretching over half a century.

For these reasons Estes can emerge from this temporary business uncertainty bigger and stronger than ever.

Quote:

Originally Posted by pterodactyl

+1. Bankruptcy doesn't always mean going out of business.

You know, I wonder, if adjusted for inflation, does Estes do more or less in overall sales volume than, say, 40yrs ago?

Estes pretty much *IS* a monopoly within the business......Quest was never more than background noise......so it would seem to stand that they'd find their way out of Hobbico's 'mess' rather well.

Maybe John Boren will make a pseudo-hostile takeover and produce only the cool stuff HE wants!! :eek: :eek:

Colonel Klink voice: "You vill build these skill level 6 kits and you *vill* like it!!"

>Maybe John Boren will make a pseudo-hostile takeover and produce only the cool stuff HE wants!! :eek: :eek:

I like that idea!

GO JOHN! :) :) :)

Verna
www.vernarockets.com
http://www.amazon.com/dp/B00HHJHOK6
http://www.amazon.com/dp/B00O14ET8K

I also like the idea of John Boren taking over !
Maybe then we could get B14s and C5s back.

Just don't let Ba**y Tu***ck get close to Estes. :eek:

Lets do a John Go Fund Me Fund. I don't know how many millions it's going to take to buy Estes so start sending your money in.

:chuckle:

John Boren

Where do I go to give? :cool: