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HomeAircraftHelicopterHelicopter Main Discussion › Hobbico filing ch 11
01-11-2018 08:35 PM  8 months agoPost 21
Doublah

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USA

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RM3
lets face it:
fewer and fewer people are interested in playing with physical toys that take significant amounts of money to master and often require you to leave the house to enjoy... people want to be entertained at the least cost and least effort...
Sad, but true.

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01-11-2018 10:48 PM  8 months agoPost 22
ICUR1-2

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Ottawa, Ontario

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garyl
Hobby king did not kill the hobby its the people who buy from hobby king. Just like tower hobbies did not kill the local hobby shops. If everyone bought from the local hobby shops they would still be there.
The people buying from hobby king didn't kill the hobby. It was drones and regulations that did !.

The lhs killed themselves by not catering to my needs and they weren't willing to have a proper website.

Places like hobby king helped the hobby by making it affordable to those who would not otherwise waste money on these toys.

This is my new LHS only 4 years old. I been around 11 almost 12 years
http://www.greathobbies.com

If they don't have it they can order it . Hmm I just order from elsewhere

spending time, paying attention

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01-12-2018 12:51 AM  8 months agoPost 23
cmartin

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Kouts IN

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I agree that the negative drone news from the media as well as the popularity of actual drones (multrotors) and the fact that the FAA just had to stick their hands into the hobby, is starting to play a big part. Small electric planes, drones, bigger electric helis and big gasser planes seem to be the thing right now. Look around, the used RC Market is terrible, you can't get but pennies on the dollar for used rc stuff. Im finding good used 60 sized glow planes in good condition ready to fly for 50-100.00 all day long around my area. Its definitely a buyers market.

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01-12-2018 01:19 AM  8 months agoPost 24
InvertedDude

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USA

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cmartin
I agree, this is why I am buying everyone's helicopter these days!

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01-12-2018 03:36 AM  8 months agoPost 25
aceisback

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Terre Haute, IN

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The decreasing interest in RC aircraft started way before drones and the FAA stuff going on. The cost of the products drove many out of the hobby. It may be geographical, but the economy is the downfall to the hobby. Club membership and the number of people flying at several of the clubs around my neck of the woods started dropping off the last few years, and those that dropped out did so due to lack of interest and cost.

Everyone wants ARF's and RTF's now, and you can do that with cheap Chinese products now vs. the name brand products out there that cost 3-4 times as much. Park flyers changed the game as well. People can fly in smaller areas, don't need a club field, etc.

HobbyKing is doing well because they offer what people want at a cheap price. If it flies, then people are happy.

Most of the drone market is probably people who had no interest in RC aircraft anyway. You can't compare flying a drone to flying an RC airplane or heli, two totally different interests.

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01-12-2018 12:28 PM  8 months agoPost 26
elmobad

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chicago IL

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This same topic that rolls around every time a major play in the hobby world dies.

What killed the hobby shops. Well it was a bad set of situations.

1) economy tanked hard, realy hard, but that was just the start because hobby shops old ones weathered bad economys in the past.

2) the Internet... this was a death blow to many hobby shops not willing to adapt to changing buying styles.

3) brick and mortar high rents, payrolls and overhead which won't mater when the money is rolling in, but things get tough combined with poor management.

4) the customer... the customer changed the youth wanted instant gratification, they are not will to put in the time to learn. So hobby companies had to adapt some did well others did not.

Sad but the FAA did not kill the hobby, I think the hobby as what most of us knew in the past was long dead already. The FAA just was kicking a dead or nearly dead dying horse.

I am sure I am missing factors but this is what I saw as the major down fall of our hobbys. The worse part as in years past time heals and new business open and evert thing recovers. This time I do belive the damage is to great. The customer has changed to much I feel the hobbies I knew as a kid growing up, sad but it's a dying or dead art.

But as usual I am probably wrong I sure I will be corrected. But, that is what I experienced and observed.

GOT FBL?

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01-13-2018 03:03 PM  8 months agoPost 27
1helimech

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NW Fla....

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Have you ever dealt with the customer service at Hobbico ???? I have and it was NO where close to their competition to say the very least.... Just say'n what goes around comes around....

I dream of a better world, A world where a chicken's crossing a road IS NOT questioned

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01-13-2018 04:17 PM  8 months agoPost 28
Doublah

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USA

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Their shipping was the problem with me. They took forever to get it out the door and the prices for shipping always seemed high compared to other vendors.

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01-13-2018 06:34 PM  8 months agoPost 29
Toadster25

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Iowa

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As far as Heli’s go, The first rc Heli’s started showing up in the 70’s I think or 80’s. They pretty much sucked and the Heli sales were probably very small probably fewer than today. They started getting better and people started trying them, more people saw them and started doing new tricks and better performance=more sales. Then lipo batteries gave us even better performance and kept the hobby exciting for a lot of people= more sales. Now there is nothing new that give us even more performance. There no new tricks to see and there’s only so many times I can do the same flights over and over before I start to get bored with it. I still have a lot to learn as far as 3D flying but I lost interest. It’s happened to me with everything I’ve done in life for the most part. I can only do something for so long and I start to get bored with it and I think that is what happened with Heli’s. Maybe rc in general.

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01-14-2018 07:42 PM  8 months agoPost 30
Eco8gator

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Palm Beach, FL

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RC has changed a lot over the years and for some reason Hobbico has been very very slow on many fronts.

Futaba is very slow to innovate. In my opinion a radio like the iX12 mainstream radio should have come out a long time ago....well Spektrum is there now. I shouldn't say too much on this matter I am still using a 14MZ

OS is kind of getting screwed because electric has become so popular.

Multirotors and racing drones seems to fill the flying void for many newcommers.

Their version of the E-Flight micro series never did very well....heck most hobby stores that I have been too do business with horizon. Not sure what is behind this maybe a HS owner can explain further.

Tower got me excited about this hobby as a little kid when I recieved their magazine in the mail and went through it and dreamed about having those toys. I remember my brother and I betting my mom for an RC plane that is still hanging in our old room in her house.

I do hope they get this figured out.

Xera Motors
ProBar
Minicopter
Thunder Power

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01-14-2018 07:44 PM  8 months agoPost 31
InvertedDude

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USA

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Eco8gator
Amen! This hurts me as well! I buy lot of stuff!

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01-14-2018 07:52 PM  8 months agoPost 32
Eco8gator

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Palm Beach, FL

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I would bet that their business people read the Jack Welch books too much.

Acquire, acquire, acquire...ride it till its dead.

I guarantee you someone is walking out of this deal very very rich.

Xera Motors
ProBar
Minicopter
Thunder Power

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01-15-2018 12:34 PM  8 months agoPost 33
Heli_Splatter

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USA

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Not the shareholders...(walking away rich) and those are all employees. When they bought the company (2005) they paid too much and/or the management they hired made bad decisions or the very nature of the hobby business was troubled.

It is pretty bad for former employees too. Some left 6 years ago and cannot retrieve any of their retirement funds. They will probably end up writing off all employee stock debt.

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01-15-2018 06:54 PM  8 months agoPost 34
jharkin

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Holliston, MA - USA

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I did some research and came up with the following...

---------------------------------------------

Back on the topic of Hobbico:
I did some digging and found the filing.

Go to the website for the District of Delaware Bankruptcy court.
http://www.deb.uscourts.gov/

The main docket number for the Hobbico bankruptcy petition is 18-10055. If you want to view it, you have to sign up for a "pacer account" and then you can view /download a PDF of the filings for a nominal fee... I think around 10 cents per page.

There are two documents worth reading - #1 voluntary petition for chapter 11, and #34 affidavit in support.

From these documents, they currently have $53.M in assets and $143M in liabilities. In FY17 they did $248M of gross revenue. The petitions lists the top 30 unsecured debts and #1 is Futaba - owed $2.3 million. The next 5 creditors appear to be trade organizations, importers, an IT vendor and what appears to be their law firm, all owed over a million each.

In the sections that talk about the reason for the bankruptcy they mentioned that they took on a lot of debt to fund acquisitions over the years, and the recent softness in the industry and a lack of product innovation at Hobbico hurt revenue and made servicing the debt unsustainable. They also specifically called out problems with their R/C car lines - The bankruptcy of HPI and Traxxas leaving Hobbico - as factors that pushed them over the edge.

There where separate petitions filed for Hobbico, Great Planes, Tower, Axial, Estes, Revell and United Models

---------------------------------

Ive been reading more.

They have had a string of bad luck. Revenue decline from $360m in FY15, to $320m in FY16 to $248m in 2017. The bottom line fell from a net profit of $2.4m in FY15 to a net loss of $14.6m in FY16. They cited a few factors:

#1. Drone revenue which initially climbed to $20m fell off a cliff when their China suppliers began selling cheap drones direct to consumer.

#2 HPI went bankrupt and was bought by Ripmax. HPI was their #2 selling brand after Traxxas.

#3 Axial r/c cars main contract factory in China went bankrupt and closed.

#4 Traxxas left Hobbico and is suing them for patent infringement.

All of these hurt sales to the point they could not keep up payment on their loans. The banks initiated default and they where negotiating to sell the business but that didn’t happen fast enough so they where forced to go chap 11. They are still trying to sell the company.

From all of this I gather that RC cars are by far their biggest seller, dwarfing planes. Helis are not even mentioned. There is talk about lack of innovation and problems with their eCommerce platform but the bulk of the blame is placed on issues with their r/c car sales and relationships with vendors. I dont see anywhere near the massive 50% sales decline in a year some members here think is happening. Its more like 10-20% per year...

-Jeremy
Whiplash-G
Helix 700G
T-Rex 450 fbl conversion
alot of planks

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01-15-2018 07:01 PM  8 months agoPost 35
InvertedDude

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USA

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jharkin
This is an eye-opener! Thank you! Hobbico acquired many companies on the verge of being bankrupt themselves. Looks like you can't blame China 100% for this. *Bummer*

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01-16-2018 01:55 PM  8 months agoPost 36
rpat

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Weirton, W. Va.

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The thing that set me off about Tower the past couple of years is when you put an order in with expedited shipping the order never left the warehouse until three days later...that set me off and I haven't ordered anything from them since that incident. Futaba is so far behind the curve now with the intro of the ix12 by spekrtum that they are dead in the water, because since they went to dmsx their problems are in the past.

trex 700fbl cal30,minititan,, trx600fbl,trex250,logo 500,Velocity N2

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01-16-2018 04:12 PM  8 months agoPost 37
ssmith512

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Indianapolis, IN USA

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rpat
The thing that set me off about Tower the past couple of years is when you put an order in with expedited shipping the order never left the warehouse until three days later...that set me off
Tell me about it! Note that they are in Illinois and I am in Indiana - not much more than a 2 or 3 hour drive. So I would order on Tuesday, pay for expedited shipping thinking I will see it by the weekend no problem. HA!! It almost ALWAYS would take AT LEAST 5 business days or more for a package to arrive at my doorstep. GRINDS MY GEARS!!!

Steve

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01-16-2018 04:25 PM  8 months agoPost 38
DCORSAIR

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Selma, Calif.

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Wow, who would have thought all this would be going on with Tower and all, I have been with Tower since 1986 and I have recently noticed that shipping was taken longer than usual and as far as Futaba, been using them since 1984, of course I won't ever change over to another brand unless they too went under, hope not, love my Futaba radios. Hope someone will step in a buy them out soon!!!

D. Lee.....t.Born again.t.....

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01-16-2018 05:37 PM  8 months agoPost 39
Dyehard

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Cedar Bluff, Va.

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All the talk about how long it takes to get something from Tower, at least you get it. There is constantly something that I want that the local hobby shop doesn't have that I can get from Tower. The local dealer always wants to order it for me, but he also wants to wait until he can get a larger order together to save on shipping. He will promise that he will have it in a week, I'm lucky if it is there in a month and sometimes it just doesn't show up at all. In the summer it's a nice bike ride to check with him but if he doesn't have it in stock now I go home and order it from Tower. Besides, what's a week to get something, go back twenty or thirty years and anything you ordered would take weeks. People have gotten spoiled.

Allen Dye

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01-16-2018 05:42 PM  8 months agoPost 40
rpat

rrElite Veteran

Weirton, W. Va.

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NO not spoiled.....it's called advanced technology I take it you are ok still with the pony express delivering your mail??????????

trex 700fbl cal30,minititan,, trx600fbl,trex250,logo 500,Velocity N2

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