Howard Hitchcock interview at LCCA from Notch 6

Not much discussion of this interview from a few days ago but I found it quite informative and interesting.

(1) Lionel's 2017 sales outdid any year in the last 10.  In a good way . Frees them up to try some new things (see below) with some of the profits.

(2) Lionel has "6-7 factories" in China and a couple of facilities in the USA.

(3) Lionel's "ready to play" sets are a big part of their sales, and this holiday season these sets will be at Target and Costco.  (Some of you turn your nose up at these, but at less than 100 bucks they represent great play value for kids and families. Many cannot or do not wish to start in the 150-200 buck range of Lionel's O gauge sets or 400 bucks for an MTH set.)

(4) The mall store experiment is a mile or so from Lionel's offices with 17 million visitors a year. Store will be in a high traffic area near the foodcourt.  It won't be a traditional train store but rather a hands-on entertainment center with sales capability.  An experiment that might lead to expansion or to ditching the idea, depending on success.  The annual warehouse sale has been a great success and was also derided initially.

(5) Lionel has a full-time staff in China with QA/QC functions.

(6) Lionel will continue to target a variety of markets (Ready to Play, Lionchief, Lionchief Plus, Legacy, for examples). Technology development remains a key investment, hence Bluetooth in everything,  and more things to come.  Kids and young adults want technology. Some older adults do too .

Original Post

I have to agree, it was another good interview. Also did not know the status of the company, financially, so it was a bit of a surprise to hear they did so well. 

i think Howard recapped some of the ideas that have been brought up in the past, one in particular, the future of the dedicated remote has real end point with transition to software based, personnel phone being the future. He did say they have plenty of stock of cab 2's and bases for sale now though.

Thanks again for your coverage Darrick 

Charlie

(1) Lionel's 2017 sales outdid any year in the last 10.  In a good way . Frees them up to try some new things (see below) with some of the profits.

(3) Lionel's "ready to play" sets are a big part of their sales, and this holiday season these sets will be at Target and Costco.  (Some of you turn your nose up at these, but at less than 100 bucks they represent great play value for kids and families. Many cannot or do not wish to start in the 150-200 buck range of Lionel's O gauge sets or 400 bucks for an MTH set.)

EXCELLENT!!!  

Lionel apparently continues to move sales upward.  Great news for our hobby.  Lionel also continues to do more than any other in terms of "spreading the hobby" to young families and young ones.

 

 

RT   

First off, thanks to everyone who continues to listen to the show. We do it for you guys and it's always nice to see when good discussion comes out of the show. 

Lionel showed some concept art at LCCA which was very interesting. The store is in the process of the build out and should be open in another 2+ weeks. There is a great deal of space dedicated to operating layouts and the play stations which many of you have noticed the past few years at Worlds Greatest Hobby. 

Many of us know one of the keys to selling Lionel is to let people experience it. I believe that this is a great way to do that and in a relatively low risk environment from a Lionel stand point of being close to home. This is a good way to test this concept and work the kinks out. We'll see how this all plays out. 

 

 

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Landsteiner posted:

Not much discussion of this interview from a few days ago but I found it quite informative and interesting.

(1) Lionel's 2017 sales outdid any year in the last 10.  In a good way . Frees them up to try some new things (see below) with some of the profits.

(2) Lionel has "6-7 factories" in China and a couple of facilities in the USA.

(3) Lionel's "ready to play" sets are a big part of their sales, and this holiday season these sets will be at Target and Costco.  (Some of you turn your nose up at these, but at less than 100 bucks they represent great play value for kids and families. Many cannot or do not wish to start in the 150-200 buck range of Lionel's O gauge sets or 400 bucks for an MTH set.)

(4) The mall store experiment is a mile or so from Lionel's offices with 17 million visitors a year. Store will be in a high traffic area near the foodcourt.  It won't be a traditional train store but rather a hands-on entertainment center with sales capability.  An experiment that might lead to expansion or to ditching the idea, depending on success.  The annual warehouse sale has been a great success and was also derided initially.

(5) Lionel has a full-time staff in China with QA/QC functions.

(6) Lionel will continue to target a variety of markets (Ready to Play, Lionchief, Lionchief Plus, Legacy, for examples). Technology development remains a key investment, hence Bluetooth in everything,  and more things to come.  Kids and young adults want technology. Some older adults do too .

I finally got around to listening to this podcast and I thought Derek's question regarding TMCC/Legacy/LC+/Bluetooth compatibility moving forward was good insight into the future. 

While Howard was pumping the brakes, it's nice to hear Lionel is thinking of a way to maintain use all these command systems moving forward.

Steve

Yes, I forgot to include Howard's discussion of the future of Legacy/LionChief/Bluetooth, etc.  Here's a post I made on a related thread on the Control System forum:

"Howard Hitchcock alluded to a Lionel development project that would attempt to tie together TMCC/Legacy/Lionchief  by some sort of bridge hardware that translates Bluetooth or similar standard transmissions into the other system's commands so "no loco is left behind."  He said he wasn't sure it could be fully implemented, but they were going to try to come up with a new platform that could speak with previous loco protocols, so to speak .  He stated that eventually it will be impractical to manufacture cab-2s because parts won't be available, so they are planning for that future."

Lionel's FY 2017 uptick in revenue could be attributed to the one-time boost in profit obtained from their "deaccession" of the archives. 

Wouldn't 2017 be a cash-flush year for anyone who sold a 117 year train collection?

GregR posted:

Lionel's FY 2017 uptick in revenue could be attributed to the one-time boost in profit obtained from their "deaccession" of the archives. 

Wouldn't 2017 be a cash-flush year for anyone who sold a 117 year train collection?

The archives was not that old.  Most of it was sold off by the old Lionel Corp.  What remained were some Postwar items and anything made since.  Keeping all that stuff takes up a lot of room and costs a lot to store.  

Ok, I am new at lots of the new technology, is this just a voice, like radio, or should there be a picture when listening to Notch 6?  Thank you for anyone that can inform me. I was at the convention, loved it, great turnout, great hospitality, and oh yes, The Chicagoland Model Railroaders are a Great Group Of Folks...B93975AB-B510-4B69-A211-8B53C23AA7BAF8BC5583-C53B-4100-82CA-67A29361C533

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Grampstrains posted:
GregR posted:

Lionel's FY 2017 uptick in revenue could be attributed to the one-time boost in profit obtained from their "deaccession" of the archives. 

Wouldn't 2017 be a cash-flush year for anyone who sold a 117 year train collection?

The archives was not that old.  Most of it was sold off by the old Lionel Corp.  What remained were some Postwar items and anything made since.  Keeping all that stuff takes up a lot of room and costs a lot to store.  

Listened to the Notch 6 podcast and also heard Howard Hitchcock address the LCCA convention the next day.

Just to add to what Grampstrains posted about the Archives, Howard said it was no longer anything at all like the Archives we think of. Over the years, previous owners had taken or sold various pieces and pilferage had also occurred. What was left included only a few prototypes and more quantity than items of significant value. Selling the Archives was not about cash, but about freeing up space for expanding their in-house production.

Also, re Lionel's excellent sales results in 2017, Howard said that after getting over a rough start to the year--I assume he was referring to the fallout from the major fail with Mega Tracks--they refocused on their core train business and sales were strong across all their product categories. As just one example, Lionel sold a quarter-million of their "Ready to Play" battery-powered sets in 2017. These sets may be of no interest to us, but they contribute to Lionel's financial strength and do a lot to feed the top of the funnel of the toy/model train market.

Retired is a misnomer.  Should be detired--less tired, more fun!

Grampstrains posted:
GregR posted:

Lionel's FY 2017 uptick in revenue could be attributed to the one-time boost in profit obtained from their "deaccession" of the archives. 

Wouldn't 2017 be a cash-flush year for anyone who sold a 117 year train collection?

The archives was not that old.  Most of it was sold off by the old Lionel Corp.  What remained were some Postwar items and anything made since.  Keeping all that stuff takes up a lot of room and costs a lot to store.  

While still some gems in there the most complete stuff was from the LTI period forward. 

Brian White

I was able to listen to the podcast today, and I want to say that it sounded sincere. I could be wrong, but I believe that Lionel, despite needing to answer to the owners, is doing the best they can to further the brand, scale, and hobby. 

Only time will tell. 

Carl Peduzzi

Dumfries, VA

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