It was in todays' paper RC2 in a day to day operation,may be going out of business!!! Maybe that is why I haven't been seeing anything new in my area and the Big Dump to Canada.....Has anybody heard anything about this? It was in the Business section of the paper.
Rc2 ??? G.o.b??
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link to article http://www.post-gazette.com/pg/07032/758362-97.stm
interesting read...I still remaining optimistic
interesting read...I still remaining optimistic
Here's the article:
Collectibles: RC2 may be exiting model business
Thursday, February 01, 2007
By Don Hammonds, Pittsburgh Post-Gazette
News that RC2, a venerable company with extensive ties with the model car industry, may be getting out of the diecast and plastic car business is setting off alarms for model car hobbyists.
Company spokeswoman Sarah Meltzer said it's too early to say RC2 is pulling out. It will "continue to operate the business on a daily basis'' while it explores its options, she said.
But Tim Kubicek, who works for RC2 with model car and collectibles journalists across the country, said the company is confronting poor sales and high prices for zinc and is looking at selling all or parts of the business.
Back in the late 1990s and early part of this century, it was not unusual for the company to sell 5,000 to 10,000 copies of a single diecast model car. But RC2 is now selling about a fifth of that amount, Mr. Kubicek said.
The model maker also may be suffering because RC2 has been focusing too much energy on 1:18 scale models instead of continuing to make 1:24 products in large numbers . The problem with the larger 1:18 scale is that such models take up quite a lot of room in home displays, so many collectors, having run out of room, have stopped buying them.
Another problem may be the product mix. Because the model portfolios have been driven by older buyers who remember the muscle cars of the 1960s, many recent products have reflected that taste. But those may not be of interest to younger buyers, whose tastes may lean to 1980s and '90s products.
To be sure, RC2 over the years has developed a lot of loyalty. Its 1:18 products, while highly accurate, are in the largely affordable $20 to $40 price range. That compares to prices that can run $100 to several hundred dollars with smaller companies. And baby boomers who grew up either collecting promotional models or building kits can thank RC2's AMT brand, which provided the lion's share of those products to car-hungry kids.
If RC2 does get out of the business and is unsuccessful at selling its dies and molds to others, it could have a chilling effect on the industry as a whole. Rather than investing in a whole new set of dies, many smaller companies have made their name taking existing RC2 products and modifying them.
Moreover, because a growing number of children are focusing on video games and technology, very few new kit designs have been introduced. And plastic promotional models, once passed out by car dealers or purchased at dime stores, have all but disappeared.
But the bright side of all this -- at least for those collectors who have already acquired what they need -- is much higher prices for their model cars, whether they are kits, die cast or promotional. "Collectors know that they aren't being made anymore so prices will go up for those already out there," Mr. Kubicek said.
Collectibles: RC2 may be exiting model business
Thursday, February 01, 2007
By Don Hammonds, Pittsburgh Post-Gazette
News that RC2, a venerable company with extensive ties with the model car industry, may be getting out of the diecast and plastic car business is setting off alarms for model car hobbyists.
Company spokeswoman Sarah Meltzer said it's too early to say RC2 is pulling out. It will "continue to operate the business on a daily basis'' while it explores its options, she said.
But Tim Kubicek, who works for RC2 with model car and collectibles journalists across the country, said the company is confronting poor sales and high prices for zinc and is looking at selling all or parts of the business.
Back in the late 1990s and early part of this century, it was not unusual for the company to sell 5,000 to 10,000 copies of a single diecast model car. But RC2 is now selling about a fifth of that amount, Mr. Kubicek said.
The model maker also may be suffering because RC2 has been focusing too much energy on 1:18 scale models instead of continuing to make 1:24 products in large numbers . The problem with the larger 1:18 scale is that such models take up quite a lot of room in home displays, so many collectors, having run out of room, have stopped buying them.
Another problem may be the product mix. Because the model portfolios have been driven by older buyers who remember the muscle cars of the 1960s, many recent products have reflected that taste. But those may not be of interest to younger buyers, whose tastes may lean to 1980s and '90s products.
To be sure, RC2 over the years has developed a lot of loyalty. Its 1:18 products, while highly accurate, are in the largely affordable $20 to $40 price range. That compares to prices that can run $100 to several hundred dollars with smaller companies. And baby boomers who grew up either collecting promotional models or building kits can thank RC2's AMT brand, which provided the lion's share of those products to car-hungry kids.
If RC2 does get out of the business and is unsuccessful at selling its dies and molds to others, it could have a chilling effect on the industry as a whole. Rather than investing in a whole new set of dies, many smaller companies have made their name taking existing RC2 products and modifying them.
Moreover, because a growing number of children are focusing on video games and technology, very few new kit designs have been introduced. And plastic promotional models, once passed out by car dealers or purchased at dime stores, have all but disappeared.
But the bright side of all this -- at least for those collectors who have already acquired what they need -- is much higher prices for their model cars, whether they are kits, die cast or promotional. "Collectors know that they aren't being made anymore so prices will go up for those already out there," Mr. Kubicek said.
My profession is not a businessman, but it makes you wonder why a company would buy another company and then go out of the business of producing the products that they acquired when they purchased that company? Why buy it in the first place? I assume at the time they acquired JL they didn't envision not producing diecast within a couple of years. Strange............
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I think it happens quite a bit Jaysdad. Businesses get their idealistic business plans and then overextend themselves and get burned on revenue for one reason or another with the whole house falling apart like a house of straws.
Article is a bummer. I tried to find a secondary source for confirmation on the story but was not successful. Hopefully it is just speculation.
Article is a bummer. I tried to find a secondary source for confirmation on the story but was not successful. Hopefully it is just speculation.
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RC2 told Mark that they would announce something in February about what they would do since they weren't continuing the Lightning Fest. Hope this doesn't prevent that from happening.
This reminds me of Hills Dept stores being bought out by Ames Dept stores and about 1 or 2 years later Ames went out of business. Hills was a cool store for diecast.
This reminds me of Hills Dept stores being bought out by Ames Dept stores and about 1 or 2 years later Ames went out of business. Hills was a cool store for diecast.
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MAybe Mr Lowe had the ultimate business idea....
Sell the JL line to RC2 for X amount
RC2 runs it into the ground (which he knew they would)
Mr Lowe buys back JL for Y amount which is substantialally less
Mr Lowe made Z Profit from selling and buying it back cheaper
*shrug*
Sell the JL line to RC2 for X amount
RC2 runs it into the ground (which he knew they would)
Mr Lowe buys back JL for Y amount which is substantialally less
Mr Lowe made Z Profit from selling and buying it back cheaper
*shrug*
i truely cannot ever see my 100's of racing champs nascar items from the 1990's ever in my lifetime gaining any value. you can't get 25 cents on the dollar now, and mine are mint and unopened. other than that, i agree with the article. my experience over 25 years of collecting a little of everything, is when a company goes belly up, balues goes belly down, unless it's a really high demand short printed item, which i never knew rc to produce.
they should've stayed as they were. i think they are history, just a matter of time.
they should've stayed as they were. i think they are history, just a matter of time.
Sometimes they do that just to eliminate the competition. If you know you're going down, you might as well take someone with you.jasydad said:
Mattel could have easily swallowed up PlayingMantis and then stopped producing JLs altogether.
I hope this is article is just speculation.
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I'm with Chris on this one. As mark Twain once said "The rumors of my demise are quite exagerated".eyecandy said:
One thing in the article did bug me though:
If this is so then why did all those damned Import Heat clog the pegs at my local WM for nearly 3 years till the cards were dog-eared. :freak: :drunk:
The Muscle cars flew off the shelves, especialy the Mustangs! I think who ever wrote that part doesnt know diddly about what sells.
From what I have seen / heard over the past couple of years, it seems that RC2 bit off more that they could chew. The market didn't help either with the costs of production going up. Then with tons of problems that haven't been totally fixed (distribution, et al) = unhappy investors / retailers / consumers.
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