Iconic British toy brand Hornby has secured an emergency finance deal worth up to £18 million in an effort to return to profit.
Following a profit warning in January and a £9.2 million operating loss in the year to March 30, 2017, the retailer announced that it was seeking a lending package in April in order to fund a turnaround effort.
This strategy is being led chief executive Lyndon Davies, who now also acts as chairman after David Adams quit abruptly less than a year after he was hired.
The strategy includes reducing overheads and product ranges, while cutting back on investment.
Hornby is best known for its model train sets and Scalextric model racing tracks and sells its goods through an online shop on its website, one bricks-and-mortar store in Swindon and through hundreds third party stockists throughout the UK.
“Whilst the board believes it is unlikely that we will need to draw down on the entire availability, the board is of the opinion that having a robust balance sheet is important to give our customers, suppliers and retailpartners full confidence in our ability to execute on the current plan and continue building beyond,” the retailer said.
This comes amid torrid times for the toy market, which is under threat from online retailers like Amazon and non-specialist discount retailers like Poundland and B&M.