Toy maker Hornby has issued a profit warning after admitting sales of Olympic merchandise were lower than expected.
The model railway business – which also operates brands including Corgi and Scalextric – said disappointing sales of Olympic goods, depressed consumer spending and supply issues meant it would not achieve its forecasts for the financial year ending 31 March 2013 and now expected only to break even.
In a statement issued this morning, Hornby said the run-up to London 2012 brought strong listings for its Olympic products – which included themed train sets, collectible cars and a Scalextric velodrome set. But the volume of Olympic merchandise on shelves meant retail sales were lower than expected.
“The major retailers resorted to deep price discounting,” the statement said. “The consequence of this for Hornby was that retailers lost confidence in many categories of London 2012 merchandise and repeat orders for our products were cancelled.”
London 2012 products are currently being sold from the Hornby website at up to 85% off the original prices. Packs of 12 Wenlock or Mandeville figurines have been reduced from £119.88 to £23.88, for example.
Hornby also said shipments of its products were being “substantially” disrupted by one of its Chinese suppliers rationalising its manufacturing facilities.
“The current disruption is part of a painful process but we believe that, working with all our suppliers, we will be able to work through this process to arrive at a more balanced supply base for the future,” Hornby said in its statement.
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