The Coming Hobby Evolution Into Robotics


Of course any regular reader of Robots Dreams knows that we are firmly convinced that the hobby robot revolution is already well underway. It's easy for us to say, especially since we don't operate a big business with a large staff and significant amounts of capital at risk. We might be right, or we could be totally off base, and the worst thing that could happen is we might end up having to eat a little crow, or wipe the egg off our face.

But, what if a major, well known and well respected, company with hundreds of employees, strong aggressive management, and millions of dollars in operating capital, came to the same conclusion? How would they position themselves to be a major player in the coming robot hobby era? We may be about to discover the answers to those and other related questions very, very soon.

It wasn't huge news for the investment community, and doesn't seem to have been picked up by most of the regular business news media, but a low-key bit of news released last week may provide some interesting insight into the future of the hobby market, and robotics in particular.

Hobbico, the parent company of well known hobby products distributors like United Model, Great Planes Model Distributors, and Tower Hobbies, acquired the assets of a household name in models - Revell (see press release below). Revell, which has been in the model business for over 60 years, has been through a series of ownership changes with seven different owners in the past 37 years.

The Hobbico management, in contrast, has built a broad portfolio of hobby products covering everything from model trains, planes, cars, and even robots, and they have established an extremely effective distribution and support network. Instead of specializing in one particular sector of the market - RC planes for example, they have leveraged their business model across the complete spectrum.

Of course part of their rationale is to take advantages of economies of scale. No matter what the product, their investment in logistics, warehousing, back-end processing, and management can be leveraged to the maximum advantage. In that respect, the Revell acquisition makes perfect sense. They gain a well known and respected brand, established customer base, and can, over time, bring considerable cost efficiencies into play.

At the same time, we believe there's another significant reason for the acquisition. Visit any hobby show, and play close attention to the way people group themselves around the various booths and products. Of course there are always some exceptions, but in general, the people paying attention, and money, to the model trains are the 'older generation' - quite often seniors that have fond memories of O-27 and even O gauge train layouts. The crowd around the RC planes are typically middle to late middle age. And the RC car fans - the youngest of the group, but still entering or in middle age, for the most part.

The obvious question becomes "what will turn out to be the 'hobby' for the next generation?" In other words, how can Hobbico position itself to serve the next wave of hobby kit builders to sustain and continue growing it's business. From that perspective, the Revell deal makes even more sense.

Hobbico has already made some moves in the direction of robotics, and is scheduled to roll out the new Futaba humanoid RBT-1 robot this summer with some very aggressive pricing and superb functionality. And, at the same time, Revell, in conjunction with Innovation First, has already announced plans to release the next generation VEX Robotics system. It would seem that Hobbico has not only captured a historic model brand and product line, they have also significantly strengthened their positioning for the coming hobby market evolution into robotics.


Hobbico Acquires Revell Monogram

Champaign, Illinois, May 2, 2007 - Hobbico, Inc. announced today that it has acquired Revell-Monogram. Revell will continue to operate from its Northbrook, Illinois headquarters and will be led by Jim Foster, the company's President since 2002 and a hobby industry veteran for over 40 years.

Revell is a world wide leader in detailed, scale model kits including cars, trucks, ships, and planes. Founded over 60 years ago, the company markets under the brands of Revell and Monogram which were combined in 1986. In September 2006, Revell's European business was sold to a group led by Revell GmbH management.

Hobbico is the world's leading manufacturer, distributor and retailer of model hobby products, including radio controlled models, plastic model kits, trains and other hobby products. The employee-owned company sells products through hobby shops, toy stores, chain stores as well as its retail subsidiary, Tower Hobbies.

"Revell has had seven different owners over the last 37 years," said Jim Foster, "but this new combination with Hobbico represents a unique partnership that provides stability for the company's dedicated staff and the resources they need to create exciting new models. Hobbico understands what's important to serious modelers. Joining the strengths of the two companies will lead to products that modelers will really appreciate."

Revell's research and development staff includes many talented professionals who have been with the company for as long as five decades. They will continue to manage the creation and manufacturing of all new and existing products from their facility in the Chicago area.

"Many modelers who fly or drive R/C got their start in the hobby by building a plastic model kit," said Wayne Hemming, President of Hobbico. "Plastic kits are the foundation of model building. We are committed to giving Revell the support it needs to continue its 60-year tradition of quality and excellence in plastic models."

The Revell and Monogram brands both originated in 1945. Revell started out with plastic toys. Their first plastic model kits sold in 1951 were a series of vintage cars called Revell Highway Pioneers. The first model was a 1913 Maxwell, a car made famous by comedian Jack Benny.

Monogram started with wooden ship models and progressed to flying control-line and free flight airplanes as well as CO2-powered cars. Their first all-plastic kit, a midget racing car, came in 1954 and sold for 98「. Next came a Hot Rod and a Racing Speedboat which both were sold as "Snap-Fit and Press-Fit for Jiffy Assembly."

"Both Revell and Monogram have produced literally thousands of different models over their long history," said Jim Foster. "Every effort has been made to preserve the production tooling for possible future re-releases. Over the coming years, we will work to not only create exciting new releases, but also bring back many classic favorites from years gone by."


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