Modelzone Goes Into Administration

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**reds8n**

http://www.bleedingcool.com/2013/06/27/panini-for-sale-as-modelzone-goes-into-administration/?utm_source=dlvr.it&utm_medium=facebook

The toy shop Modelzone appears to have gone into administration, with this statement;

On 26 June 2013, Richard Michael Hawes, Nicholas Guy Edwards and Robert James Harding of Deloitte LLP were appointed Joint Administrators of Modelzone Holdings Limited, The Amerang Group Limited, Modelzone Limited and Amerang Limited (together the “Companies”). The affairs, business and property of the Companies are being managed by the Joint Administrators. The Joint Administrators act as agents of the Companies only and contract without personal liability. The Joint Administrators are authorised by the Institute of Chartered Accountants in England and Wales (ICAEW). All licensed Insolvency Practitioners of Deloitte LLP are licensed in the UK

Modelzone had almost fifty shops nationwide, and retail a lot of comic-related Gentle Giant, Hot Toys and Sideshow stuff for the UK, probably second only to Forbidden Planet as a mass chain retailer for that kind of product and they also sold lots of other related products too.

**Kilkrazy**

The Guardian is also reporting this.

It's probably the final end of high street nerd retailing.

**cyphertheory**

Shame, The Croydon branch was always very well stocked and the staff were great. hopefully there will be some good deals to be had if the sell off the stock.

**Aerethan**

For those in the US, wtf is "administration"?

From the tone of the thread I gather it's like a company going bankrupt and liquidating assets?

**Kilkrazy**

That is what it is.

The company may be kept running for a while so the official receiver can sort out the assets and dispose of them at the best value to recompense all creditors according to a set of standard rules.

**SilverMK2**

Aerethan wrote:
For those in the US, wtf is "administration"?

From the tone of the thread I gather it's like a company going bankrupt and liquidating assets?

Pretty much.

**notprop**

It can also be restructured and kept in business, but this is highly unlikely.

Still there's always GW to kill time in while the Mrs runs amok with the CC at Lakeside...........This is a disaster!!

**Howard A Treesong**

They reminded me of Beatties, that shop with the black and yellow logo that did a lot of models. They too were generally overpriced with a little added onto everything, but then made up for it with a few sales and items that were heavily discounted. It's an odd thing, if you picked something up it either had a few quid added on or it was half price or better.

Like many shops I enjoyed going in them but my purchases were few.

**winterdyne**

I used to buy a fair amount of stuff in there. Craptastic news.

**Jingles**

That's weird. I deliver in London and one recently closed on High Holbourne street near where "Burn the Dance floor" is showing but opened a brand new branch a few hundred metres away near the British Museum on Blooms-bury street. Literally a month ago.

**Ugavine**

This was in my local paper yesterday as we have one of their stores nearby. Sad news, I do use my local Modelzone, hope the Administrators can keep the company afloat.

**OrlandotheTechnicoloured**

I'm not hopeful,

from the sound of it they pulled the plug on the day before the quarters rents were due so I suspect they have pretty huge debts

(and landlords who won't really be interested in letting a 'phoenix' company stay in their properties)

**richred_uk**

Aerethan wrote:For those in the US, wtf is "administration"?

From the tone of the thread I gather it's like a company going bankrupt and liquidating assets?

Kilkrazy wrote:That is what it is.

The company may be kept running for a while so the official receiver can sort out the assets and dispose of them at the best value to recompense all creditors according to a set of standard rules.

Not exactly - in US terms, it's gone into Chapter 11 Bankruptcy protection. In Administration, an outsider (accountant) comes in and takes over the running of the company to get the best result for the creditors of the company (this may mean closing it down and selling off what's left or may mean re-structuring). While in administration, the company can't be sued for any outstanding debts. At the moment in the UK, you can pretty much set your watch (or calendar) for administration happening with multiple companies in retail, as almost all commercial rents are payable every 3 months, in advance on set 'quarter days' - IIRC, they are the 25th of March, June, September and December. So if a company will struggle to pay it's rent, that's when it opts for administration.

Now watch and see whether it appears as Hobbyzone 2013 Ltd in a Phoenix company rescue with the same directors etc - no idea if it will, but it's becoming more and more popular.

**chaos0xomega**

richred_uk wrote:
Aerethan wrote:For those in the US, wtf is "administration"?

From the tone of the thread I gather it's like a company going bankrupt and liquidating assets?

Kilkrazy wrote:That is what it is.

The company may be kept running for a while so the official receiver can sort out the assets and dispose of them at the best value to recompense all creditors according to a set of standard rules.

Not exactly - in US terms, it's gone into Chapter 11 Bankruptcy protection. In Administration, an outsider (accountant) comes in and takes over the running of the company to get the best result for the creditors of the company (this may mean closing it down and selling off what's left or may mean re-structuring). While in administration, the company can't be sued for any outstanding debts. At the moment in the UK, you can pretty much set your watch (or calendar) for administration happening with multiple companies in retail, as almost all commercial rents are payable every 3 months, in advance on set 'quarter days' - IIRC, they are the 25th of March, June, September and December. So if a company will struggle to pay it's rent, that's when it opts for administration.

Now watch and see whether it appears as Hobbyzone 2013 Ltd in a Phoenix company rescue with the same directors etc - no idea if it will, but it's becoming more and more popular.

Ah, thanks for that explanation. So, is this how the accountants came to run games workshop? ;P (joke)

**thedavo**

Can't say I'm surprised, given how empty the Birmingham one always seemed to be. Although I imagine that the rents were fairly cheap for city centre, due to it being where Music Zone used to be.

**pitboy2710**

Crap :(

**Smacks**

That is sad news, I always enjoy going in ModelZone. I never buy anything in there because it's aways way overpriced (compared to online), and despite all the cool stuff they have, they never seem to have anything I actually want. I've been in there lots of times with the intention of buying something, but I don't think I ever walked out with a purchase... I guess that's probably why they are going out of buisness.

Still I think it's a shame. I've seen a lot of model shops close down. I thought ModelZone would be different, but I guess model shops just aren't hugely viable.

**Kilkrazy**

ModelZone seems to have been a basically viable chain that has been sunk by an over-ambitious expansion programme in 2010-2011 which inflated their rents faster than their profitability. They have a web shop so it's clicks and bricks.

Their losses last year were apparently £750,000 which is a lot to you and me but reckoned across 300+ stores is not very much. I mean, less than £3,000 loss per shop per year. If they could close 10% of their shops it would probably bring them into profit.

**OrlandotheTechnicoloured**

I popped into the local one and the staff are clueless (nobody's told them anything), but hopeful as their store at least runs in the black

It's not a 'closing down' sale but they did have some of their older 1/35 Trumpeter armour kits at decent discounts that I'd not seen at sale prices before so worth a look if you build armour

T-62s, Waffentrager Pak43, Neubaufahrzeug, ASU-85 and either a Jadtpanther or tiger

**reds8n**

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10146498/Hornby-hit-by-collapse-of-key-customer-ModelZone.html

Deloitte has been confirmed as the administrator to ModelZone, which has 47 stores across the UK and is backed by the investment arm of Lloyds Banking Group.

The appointment of administrators prompted Hornby to release a statement to the stock market saying that it has managed to limit its exposure to the collapsed retailer to an "acceptable level".

Hornby has concessions in all ModelZone's stores but is understood to own all its stock, meaning that the company will be protected from the demise of ModelZone.

In a statement, Hornby, which fell into the red last year after disappointing sales of London 2012 Olympic models, said: "ModelzZone is an important business partner and although the news of the administration is disappointing our account management team has been well abreast of Modelzone's challenging trading situation and has been able to manage our financial exposure at an acceptable level.

"Hornby has a wide, multi-channel distribution platform, which it is continuing to broaden. In the UK, Hornby supplies over 700 independent model shops, national retail chains as well as selling direct to consumers via its online platform."
ModelZone is one of a collection of retailers to face collapse this week. Furniture chain Dwell as well as fashion retailers Internacionale and Ark have either appointed administrators or intend to appoint administrators in the week that retailers are due to pay rent for the next three months.

Deloitte said that ModelZone, which has 400 staff including its wholesale arm Amerang, had expanded too quickly.

Richard Hawes, joint administrator, said: "ModelZone has historically been profitable, however in recent years the company entered into leases for new stores that proved to be loss making.

"This, coupled with the growth in online competition, has resulted in ModelZone generating losses over the last couple of years, which the board of directors has now concluded is unsustainable and sought the appointment of administrators.

“We are working closely with customers and employees to ensure the business has the best possible platform to secure a sale, preserve jobs and generate as much value as possible for all creditors.

“Amerang is a profitable business, but the directors were forced to seek the appointment of administrators to protect the value of the business following the administration of ModelZone, its sister company.

"Amerang remains profitable and we will continue to trade as normal while we seek a buyer for all or parts of the business as a going concern.

**Art Steventon**

Given that Hobbycraft now treat male orientated hobbies like dirt, this is really bad news.

**Wyrmalla**

Alright, I'm going down to my local one with my pocket money and buying up every Tamiya kit that looks interesting in sight. ...That is if this hasn't prompted others to go down there and buy up those kits. Damn I love those Tamiya Sd.Kfz....

Forbidden Planet is the number one seller of models in the UK? Uh... mine just sells comics and toys.

**master of ordinance**

Art Steventon wrote:
Given that Hobbycraft now treat male orientated hobbies like dirt, this is really bad news.

+1 to that-i went in looking for a few FOW to do some Girls und Panzer fan builds and found that they no longer stocked them. They only stock GW. And the worst part was the staff member i asked saying: "Oh we dont stock GW anymore-we only stock warhammer". I wanted to

epically at that.

they have also got rid of most of their historical stuff with the exceptions being Airfix and a little Tamiya-all of which i can get cheaper at my local model shop Transport Models in Preston.

**Palindrome**

Smacks wrote:
That is sad news, I always enjoy going in ModelZone. I never buy anything in there because it's aways way overpriced (compared to online)

Thats my experience as well. I think the only thing that I have bought there recently is some 1/100 scale Zvezda T-26s and thats only because they were in the bargain bin (yet were still more expensive than a webstore). Shops like this will always struggle agianst on line competition.

**Kilkrazy**

I used to go in Modelzone a few times a year and bought stuff that was on sale. Some of their sale prices were super cheap if you were lucky. I also bought stuff from the website.

**pgmason**

I use them for things like paints (they stock Vallejo) and terrain supplies - flock, static grass etc, but I've never bought any actual models there.

**Fenrir Kitsune**

pgmason wrote:
I use them for things like paints (they stock Vallejo) and terrain supplies - flock, static grass etc, but I've never bought any actual models there.

Same

**Skinnereal**

On the one visit I made to Birmingham's Modelzone, I left empty-handed.
As mentioned above, the prices were higher than other stores, and they had little of what I would use.
But, they had a lot of ranges, and could probably get in most of what they didn't have on the shelves.

So, this is a pity for anyone directly involved.
But, it shows that following a similar business model to GW's isn't always a good idea. I know Modelzone aren't a manufacturer, but in the sense of B&M stores with above-average prices, and a minimal online presence.

**Wyrmalla**

Went to mine today. Didn't seem to see any change there other than that they weren't accepting discount cards. Apparently its just the site that's down, the staff are fairly optimistic.

**Eberious**

Got to say, I'm glad my application to work there was turned down when they first opened in my city(they were looking for sales people, not experienced sales/hobbyist people?)

They have actually lasted longer than I expected where I live so fair do's to them there. But like others I'm not surprised, with their high prices £5 for a single A4 sheet of plasticard. I can get 3-5 online for the same price.

Will have to nip down and stock up on some Vallejo though, and if they have a sale then will stock up on the plastruct stuff.

My sympathies for who ever loses their jobs, as it ain't easy to find another stable one.