Full-year loss set to be larger than originally expected after disappointing Christmas trading.
The company said that its autumn move to stop selling large quantities of stock at a discount in order to protect the brand had not picked up steam just yet, despite claiming “overwhelming support” for the change.
Hornby said rebuilding trust in the pricing architecture takes time, and some of its retail partners were “taking longer than others” to accept the new approach.
Progress has been made on the ongoing cost base though, with the new management team reducing fixed overheads by £1.7m, saying further trims are on the cards.
Hornby’s interim chairman and chief executive Lyndon Davies, said the firm “remained committed to the strategy that was outlined in the half-year results”.
“The design and production cycles are long in this business and whilst we are excited about the products we have in the pipeline, it will take time for the new products to come through and for the trust with our customers to be fully rebuilt,” he said.
He continued: “The change in strategy has meant that the Christmas trading period was tough and there is likely to be some more volatility as we find out how off-peak trading performs for the first time in years without discounting. Despite this, we are determined to weather the storm and come out the other side with stronger brands, loyal customers, a leaner cost base and a better foundation from which to build a profitable and growing business.”
In November, Hornby called for £12m of funding from its owners after reporting increased losses and rising levels of net debt.