Condition of Walthers Co.?

[TCurtin]

I have heard some comment that Walthers is in serious financial trouble. Is there anything to this? (I know better than to believe everything I hear).

[CNJ999]

This rumor has circulated around the internet several times in recent years, but so far there has yet to be any real evidence presented to seriously support the idea.

One thing it clear, however, and that is Walthers, nor its annual consumer catalog, are any longer the real go-to source when wishing to obtain model railroading items. Once upon a time Walthers could be counted on to provide hobbyists with virtually any and everything one saw in their catalog...and do so within a week. Today what stock they do maintain is certainly not in any depth and a very high percentage of items are listed on back-order with an arrival date noted as "unknown". Now I understand that many businesses these days follow the current business model that says maintain minimal stock However, this highly constrains a hobbyist's progress when he can not obtain from the presumed premier supplier some critical items he wants for his layout. At the same time Walthers' items are mostly overpriced relative to street prices found on the internet and elsewhere.

I would add that in recent years Walthers seems to be turning increasingly toward offering high-end locos, cars and whole trains, the latter approaching what were brass prices not all that long ago (they are not alone in this either). Paying upwards of $1,000 for a set of plastic diesels and some accompanying cars says to me that Walthers' current business direction is heading more and more toward an elite collectors market and no longer is targeting the average hobbyist. Just how long they can stay afloat in a dwindling hobby market remains to be seen, especially considering the demise of virtually all of their regional distributors and allied hobby shops. Nevertheless, I don't anticipate that Walthers will close its doors anytime real soon.

CNJ999

[jwhite07]

Once upon a time Walthers could be counted on to provide hobbyists with virtually any and everything one saw in their catalog...and do so within a week. Today what stock they do maintain is certainly not in any depth and a very high percentage of items are listed on back-order with an arrival date noted as "unknown". Now I understand that many businesses these days follow the current business model that says maintain minimal stock However, this highly constrains a hobbyist's progress when he can not obtain from the presumed premier supplier some critical items he wants for his layout.

Another issue in play is that many of Walthers' suppliers are garage businesses who do limited runs once in a while when they get around to it, or have other issues to deal with (I've seen a sad share of obits in the trade press), or have simply gone out of business. Walthers has remaining stock for these lines and will list it until it's gone, and too often, when it's gone, it's gone for good. Look for 3D printing to fill some of the void. All you need is someone to design it, and it gets printed on demand. No inventory overhead. But Walthers isn't into that niche yet.

I would add that in recent years Walthers seems to be turning increasingly toward offering high-end locos, cars and whole trains, the latter approaching what were brass prices not all that long ago (they are not alone in this either). Paying upwards of $1,000 for a set of plastic diesels and some accompanying cars says to me that Walthers' current business direction is heading more and more toward an elite collectors market and no longer is targeting the average hobbyist.

That's where everyone is going, seemingly. High price, detail packed offerings, ready to run. I've said it before, I'm glad I got my start in the hobby with $30 Athearn Blue Box locomotives and $5 MDC freight cars. And I still love kits and superdetailing. But to be fair, the argument is that this movement is a response to what the market demands. People want it detailed to the max and plunk it on the track and go right out of the box, so that's what's being made. As far as plastic versus brass, well, nowadays plastic can be as good or finer detail than brass, so it's priced closer that way. And unlike typical brass offerings, it will run great, and you won't be so afraid to take it out of the box and actually use it.

[Backshophoss]

Product availability at times can be when the factory in China can do a production run,and then getting space on a container ship
to the west coast.
Soon the stuff for X-mas sale by the Major Retail Chains will grab large chunks of space on the container ships to the west coast,
so the 1-2 containers to Walters,Atlas, and Rapido will "bumped" off untill an available space is found.
Atlas and Walters have been caught by Factory Bankruptcy in China at least one time,then they have to attempt to
recover the molds and tooling from the Chinese government.

[CNJ999]

Once upon a time Walthers could be counted on to provide hobbyists with virtually any and everything one saw in their catalog...and do so within a week. Today what stock they do maintain is certainly not in any depth and a very high percentage of items are listed on back-order with an arrival date noted as "unknown". Now I understand that many businesses these days follow the current business model that says maintain minimal stock However, this highly constrains a hobbyist's progress when he can not obtain from the presumed premier supplier some critical items he wants for his layout.

Another issue in play is that many of Walthers' suppliers are garage businesses who do limited runs once in a while when they get around to it, or have other issues to deal with (I've seen a sad share of obits in the trade press), or have simply gone out of business. Walthers has remaining stock for these lines and will list it until it's gone, and too often, when it's gone, it's gone for good. Look for 3D printing to fill some of the void. All you need is someone to design it, and it gets printed on demand. No inventory overhead. But Walthers isn't into that niche yet.

Yes, that is what I once thought, too. However, I learned some valuable lessons a while back about Walthers. Several times in recent years I critically needed this or that item, or kit, to finish a project, or complete a scene. The particular items were, of course, listed in the catalog, but repeated orders placed spanning many months kept getting a listing of "currently unavailable, arrival date unknown." A called to Walthers confirmed that these items were indeed on back order, but they couldn't give me any idea when they might be coming.

After around a year of this I thought that perhaps my calling the item's manufacturer might spur them to action rather than just pestering Walthers, so I gave a call. The first time the person answering the phone was surprised to hear that their item was unavailable through Walthers and said they'd received no orders for it from Walthers over the period in question. They also informed me that they had the item I wanted in stock and would ship it direct to me the next day! This situation was repeated for me twice more with other small manufacturers, with them always having the product on hand!

What I can only gather from the whole farce is that if the item is not a hot seller and Walthers does runs out they will await at least several customer orders for it before they place their order with the manufacturer! Obviously, they get a better break ordering a batch of the items than doing so one at a time. This may be nice for Walthers, but a poor practice for its customer base. Walthers used to be able to supply 98% of the catalog items because it stocked what they advertised. Nowadays I'd bet that it's closer to 50-60%.

CNJ999

[Roger Hensley]

Athearn was bought out by Horizon and then MDC went the same way to Horizon. That cut out a lot of Walthers sales. Then Atlas got into a problem with its supplier. There went another group of sales. All in all, Walthers has done a pretty good job even staying in business.

[CNJ999]

Athearn was bought out by Horizon and then MDC went the same way to Horizon. That cut out a lot of Walthers sales. Then Atlas got into a problem with its supplier. There went another group of sales. All in all, Walthers has done a pretty good job even staying in business.

Indeed, the number of individual companies have been swallowed up by the biggest suppliers in recent years and I expect that we will see increasingly more of that in the near future. A couple of the remain rollingstock manufacturers have been said to be in the market for a sell-out in the past few years, too. However, this topic brings up another shortcoming in good old Walthers. During the 1970's, 80's and 90's Walthers bought out a number of the hobby's cottage industry manufacturers. Initially this was looked upon as likely to be a good deal by hobbyists since Walthers would be able to keep producing the unique items these little guys were struggling to keep on the market. Well, long story short, all Walthers did with these buy-outs was to immediately discontinuing each of the product lines as fast as they acquired them!

CNJ999

[Engineer Spike]

I think the web has just about killed them. If I need a part, just google it. The companies can sell direct, and the customer wins too, with no middleman.

I think that the purchase of Lifelike has been a good step. Instead of being a middleman, they actually have products,which they control. The key is to do something which Atlas, Athearn.... have not done.