That explains the big sale they had last week (where I got a, no, make that two, Con-Cor Autoracks for $6.48 each...)
That's gonna be massively confusing for the store building which was custom-built to resemble Los Angeles Union Station to become a camera store, and have the model train store located across the street. Even non-model railroaders in this city are familiar with that building as a place to find model trains!
That would be tempting and although I don't have all $500K to invest (at least w/o using my retirement funds) with his business numbers, I bet you could get a loan for at least half the sales price if his numbers are right. Many businesses sell for a year's revenue or 3-7 years profits. It's suspicious that he is posting $35M as ten years revenues though. Given that I hear that train sales are dramatically down, for all I know, instead of averaging $3.5 Mil per year, he might have had $7 Mil in sales a decade ago and $1 Mil last year. For that matter, gross profit of 44% is not net profit - its his profit on cost of inventory only. Given rent, heat, lights that will be less and could even be a loss. Interesting that he is selling for cost of inventory on hand. There are a few LHS that have enough good will value and customer lists that might warrant some value, and I presume his would be one. Most would basically sell at inventory value, and perhaps at a fraction of that. He has some funny conditions for purchasing the inventory, as well. 60% of wholesale if you pick, 40% of wholesale if he picks? Earlier, he says its all "fresh" inventory. And, the neighborhood right around the store isn't the greatest, making the bargain rent across the street suspect. Oh well, I am not really interested in owning a train store, nor really moving to So Cal. I was just there, and its nice, but homes cost so much you would have to take out a 50 year mortgage just to live in a nice neighborhood.
used to visit the store when it was in west Los Angeles. New store sure is nice. Thats about it. Prices are high and the sales staff were always rude. When you could get them to help you. Had a lot of questions to ask about DCC when I was starting out with digitrax and after a couple basic questions the sales guy showed no interest in any further conversation and acted like I was idiot for asking questions. guess he had a coffee break he was late for or something. Could be the L.A. thing or maybe I wasn,t a rich movie star. on second thought, it must be me. Cause I havn,t found a model train store in southern california that isn,t over priced or have rude sales people. or both. any body else have that negative experiance in SoCAL? glenn
BTW, He also notes that the web site could be improved to improve that component of the biz. No doubt he is right there. And, the CC autorack sale is getting pretty typical now that MT, RC, Atlas and Athearn each have superior competing models.
You'd be amazed how sales of the C-C have actually increased since the alternatives are generally about double the cost.
At the Plano Train Show, I tried to unload my fleet of CC racks on a table at those kind of prices, and with MT's and had no takers. Not exactly a scientific sampling, but I guess I figured sales were struggling. BTW, if it isn't too unprofessional of you, any thoughts on that proposed store sale? Wig Wag West perhaps in our future? Someone mentioned that their prices weren't that great. I concur based on my trips over when flying through LAX. I guess So Cal might be one of the highest cost places in the world to do business, so it figures. It might NOT be a good place to expand net sales, because the base costs are still there. I looked at those figures again and still find them possibly intentionally misleading. I had a local shop ask me to invest and when I asked for numbers, he gave me a yellow sheet of paper with some scribble figures rather than an accountants statement. None of them was a simple $XXX in revenue and profits for the last three years. They had no accounting system for actual inventory, but "knew" it was worth over a $1 MIL. Some of the figures shown in that ad on EBay strike me as similar, and not anything a business person would use to make a decsion. On the other hand, the local shop (which I understand will close shortly) thought their business was worth $1.3 MIL with a lot lower sales than Allied. Overall, if you were interested in the hobby biz, it sounds like one of the better ops out there. As I said, I doubt many shops have good will value, but Allied might. So, buying it for inventory plus $1 and having ready made customer lists might be a good alternative to starting from scratch. Assuming again that you could afford to live in So Cal!
Please don't encourage George to come to LA as that will increase my prices by 8.25%. I like that he is out of state So now that would be at least 2 big stores going by the wayside out here. Long's hobby closed a year or 2 ago and now Allied. This isn't exactly a real business friendly state especially for the little guy.
What? You're just wedded to SoCal stereotypes. Aside from one bad experience (I posted about it a couple months ago about a condescending HO-biased hobby shop dude), I've had great experiences at all hobby shops in the Los Angeles area. I understand about the Allied DCC guy though. Does he have a thick Brooklyn accent? Yeah that guy's full of attitude. But I only deal with one guy at Allied, Don, who's in charge of the N scale department and he's really cool. Which hobby stores have you been to? Open your mind a little and you'll find that people are nicer than you expect them to be.
Oh really! I have to admit, they're lousy as RTR, but pretty good as a project car: BTW, I bought two Red Caboose autoracks (one of them is the yellow one barely visible on the left) from you folks when you were at the Great Train Expo in Anaheim in January! At $30 each I couldn't pass them up.
Nice car! Needs more weathering, though. With the SP racks I see, it's sometimes hard to tell the silver parts from the brown parts
Well I know firsthand that they own their own building, and in fact Allen Drucker is still going to be making $$$ leasing the current building to the camera store AS WELL AS possibly leasing the secondary location to the new owner. So the new owner, if they choose to go to the secondary location, will have to have that overhead. Allied is one of those stores that easily market themselves. With a building designed to resemble Los Angeles' Union Station, even non-model railroaders know what kind of business it is. During Christmas season, a lot of families buy train sets, Thomas, etc there. And with a rep going back to the 1940s, it's one of the three oldest shops still running in the entire area (the other being the Original Whistle Stop in Pasadena and The Roundhouse in North Hollywood). Most other stores have to struggle to get known to their market. Allied is an institution. I do wish the new owner would discount and have more sales. Many model railroaders in the Los Angeles area know that Drucker has a greedy, shifty reputation. He's also known for buying old AHM crap from people who are leaving the hobby or selling off an inheritance collection, and selling them for extremely high prices at his Pasadena auctions. I think most of his staff are good people, but aside from having items the other stores don't have, Drucker doesn't run a business that caters to the modeler.
Milepost 38 is the place to go! http://www.milepost38modeltrains.com/ It's a bit of a drive, but we start in San Diego so it's a lot closer than that for all you LAtians. Try it out, you'll be very happy!
Actually I have been in there several times. And every visit was the same. Which hobby stores have you been to? just aboutall the So Cal stores. The owner at Roundhouse in san fernando valley was an exception, nice guy but the place smelled like an ashtray. The bottom line is, treat me right and I go back
So what is "right treatment" then? Do you expect them to deliver trains to you on a silver platter? Have maidens feed you grapes? LOL, maybe you're the one with the attitude... :laugh: Judge yourself before you pass judgment on others. Especially when those judgments are predetermined. Temple City Trains in Temple City is run by an N scaler who's a real cool guy, and they discount. My recent visit to Scale Model Stuff in Canoga Park yielded my a while bunch of Walthers containers that the guy just had in a box in the backroom after I simply asked if he had any. The folks at Whistle Stop and Train Shack are cool. Burbank House of Hobbies (N scale only) gave me an unexpected discount on MT autoracks I bought there. MP38 is cool but a little far for me. You're right on about Roundhouse, you should come when they have their monthly raffle at the last Saturday of the month. The only store I will not recommend is a certain hobby shop in Lakewood, which I will not name. But their N scale selection is lacking anyway, so they're not even worth a visit even if they did have good service.
I had a good relationship with the owner of Arnie's Trains in Westminster, and bought a lot of detail parts and stuff from him. He'd have one or two sales each year and mail out a notice, so that helped a lot, too. Unfortunately, he had (has?) an assistant who has a VERY strong HO bias, who likes to claim he works for Athearn (while standing in a retail store behind the counter) and denigrating N scale and N scalers. The Freight Yard people were OK when they were still in Anaheim, but I just balked at their idea of paying an annual membership fee (like Costco). And their was a small mom and pop (grams and gramps, maybe?) in Costa Mesa called the Train Crossing. I always marveled that they had a small N scale inventory, but what they had seemed to be right on - whoever bought for them did a good job. They had a nice Micro-Trains program which encouraged N scalers. But, like Arnies, their main emphasis was HO, by a mile... As for Allied, their N scale department always struck me as abnormally poor - even the little Mom and Pop in Costa Mesa had a better selection most of the time. But those are just my observations...
