Die-cast models business Corgi Classics has been acquired from
Corgi International by models and collectibles group Hornby for
£7.5 million. Hornby will also buy Corgi’s existing stock
for an additional £800,000 subject to a postclosing
valuation.
Corgi was established by Mettoy Company in Northampton, which
started producing pressed-metal toys in the 1930s. At its height
Corgi Classics was selling millions of toys a year.
In the year to 31st March, Corgi Classics generated sales of
£6.5 million, but as part of Hong Kong-based Corgi
International it did not report profitability as a separate
entity. In a statement made on 1st May, Corgi International said
it had been suffering from a “working capital shortfall due
to tighter credit limitations, poor holiday sell-through results
and retailer financial difficulties”. Its divestment of
Corgi Classics is part of a move to improve liquidity that
included the sale of its Cards Inc trading-card distribution
business to Esdevium for approximately £1.2 million and
£350,000 of inventory. Corgi International used the funding
from the sale of Corgi Classics to reduce its debt from a peak in
January 2008 of approximately £11.3 million to £2.6
million.
For its part, Hornby plans to strengthen the Corgi Classics
product range and improve the marketing and distribution support.
Key marketing, sales and development personnel will be retained,
whilst logistics functions that are currently outsourced will be
integrated into the Hornby structure along with sales
administration, finance and operations.
Published: 16th May 2008
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