Caboose

[C855B]

... We thought Radio Shack was done...

So did I. There seems to be a new private equity conglomerate, Retail ECommerce Ventures, that is buying-up defunct or near-defunct B&M retail brands such as RS, Dress Barn, Pier1, and Linens-n-Things, mostly turning them into e-tailers. I guess they're reviving the RS "associate store" model that served lesser markets. The CEO, Cheryl Bachelder, is mostly known for success turning around the Popeye's fried-chicken chain, but unremarkable otherwise, especially that the entirety of her career was in fast food up until REV. In so many words, we'll see.

[dem34]

So did I. There seems to be a new private equity conglomerate, Retail ECommerce Ventures, that is buying-up defunct or near-defunct B&M retail brands such as RS, Dress Barn, Pier1, and Linens-n-Things, mostly turning them into e-tailers. I guess they're reviving the RS "associate store" model that served lesser markets. The CEO, Cheryl Bachelder, is mostly known for success turning around the Popeye's fried-chicken chain, but unremarkable otherwise, especially that the entirety of her career was in fast food up until REV. In so many words, we'll see.

It does seem to work, there is one associate location in my local Hobby Town. It is more expensive then just buying the stuff online, but I like having a place nearby to get battery cases, toggle switches, terminal blocks, etc. And overall its cheaper than the hardware stores even with Hobbytown's aggressive adherence to MSRP.

[Rossford Yard]

....... if they make an announcement about a new online presence, I would definitely have representation at the bankruptcy hearing.

TomO

I was once in a train store, and the IRS was there.  It seems that one of the mid-pack mfgs. was fraudulent and/or didn't pay taxes, and the IRS was there to confiscate the LHS inventory of said product so they could sell off to pay off the tax lien.  I didn't really think that could happen, and suspect it was more than just delinquent taxes owed, it was perhaps a bit more criminal than that.  Of course, I may have misunderstood and/or just not gotten the whole story, although the proprietor talked about it at length after the agents left.  Leaving the actual mfg name out, to avoid any potential for slander lawsuit, although they are seemingly out of biz for good.

[TLOC]

I was once in a train store, and the IRS was there.  It seems that one of the mid-pack mfgs. was fraudulent and/or didn't pay taxes, and the IRS was there to confiscate the LHS inventory of said product so they could sell off to pay off the tax lien.  I didn't really think that could happen, and suspect it was more than just delinquent taxes owed, it was perhaps a bit more criminal than that.  Of course, I may have misunderstood and/or just not gotten the whole story, although the proprietor talked about it at length after the agents left.  Leaving the actual mfg name out, to avoid any potential for slander lawsuit, although they are seemingly out of biz for good.

While I am not an attorney nor did I sleep at a Holiday Inn Express last night I am well versed on bankruptcy in the USA. I had to review thousands a year at my old job to see if the consumer debt we were trying to collect was legitimate and dischargeable. Many times people played games with their debts mostly unknown to their filing attorneys. When we had questionable debt or there was a product to be reclaimed we sent representation to the bankruptcy court hearing. Very seldom did we get anything reclaimed but enough to make it worthwhile. Bankruptcy is a legit tool to help the consumer or enterprise resolve their debts they cannot pay for. I would have questions on any type of debt relief Caboose is looking for. But IMHO the courts have no issue discharging debt because a business was stupid!

TomO

[Rossford Yard]

While I am not an attorney nor did I sleep at a Holiday Inn Express last night I am well versed on bankruptcy in the USA. I had to review thousands a year at my old job to see if the consumer debt we were trying to collect was legitimate and dischargeable. Many times people played games with their debts mostly unknown to their filing attorneys. When we had questionable debt or there was a product to be reclaimed we sent representation to the bankruptcy court hearing. Very seldom did we get anything reclaimed but enough to make it worthwhile. Bankruptcy is a legit tool to help the consumer or enterprise resolve their debts they cannot pay for. I would have questions on any type of debt relief Caboose is looking for. But IMHO the courts have no issue discharging debt because a business was stupid!

TomO

Understood, and to be clear, I wasn't talking about Caboose or their current situation. 

The biggest thing I took out was that the LHS owner was apparently going to be out the wholesale cost of about 2-3 dozen N scale freight cars that he had in stock, in order to satisfy someone else's concern.  At that time, it probably didn't amount to $350-$400, but that could be significant to a struggling LHS.  Not saying the IRS was wrong, but felt sorry for the LHS having to pay some of the debt of an mfg. that had actually been in and out of business under a few different names, with a history of filing BK to get out of their misadventures.  But, I guess that's how these things go. 

[TLOC]

Understood, and to be clear, I wasn't talking about Caboose or their current situation. 

The biggest thing I took out was that the LHS owner was apparently going to be out the wholesale cost of about 2-3 dozen N scale freight cars that he had in stock, in order to satisfy someone else's concern.  At that time, it probably didn't amount to $350-$400, but that could be significant to a struggling LHS.  Not saying the IRS was wrong, but felt sorry for the LHS having to pay some of the debt of an mfg. that had actually been in and out of business under a few different names, with a history of filing BK to get out of their misadventures.  But, I guess that's how these things go.

I knew you weren’t writing the story about Caboose. Sorry I gave that impression.

TomO

[Ed Kapuscinski]

https://businessden.com/2021/01/04/caboose-once-worlds-largest-model-train-shop-runs-out-of-steam-in-lakewood/

[ednadolski]

https://businessden.com/2021/01/04/caboose-once-worlds-largest-model-train-shop-runs-out-of-steam-in-lakewood/

"That likely means that we’ll continue online.”

Welll, ok.... hopefully they succeed, but time will tell.

Ed

Edit: the mycaboose.com still says 'down for maintenance'....

[wcfn100]

I was at Caboose today, they were selling the fixtures.

The story on the caboose out front is that it's for sale, but he wants quite a bit for it.  I doubt anyone will offer anything close.  So it sounds like the plan is for the CRRM to display it but it will still be under private ownership and won't be open to go inside.


Jason

[Rossford Yard]

I once had a friend who wanted me to finance buying an LHS, presumably for him to run as he needed a job, bad!  I saw a few ads and offers to buy various LHS.  That got me to wondering, just what they would be worth?  A typical business formula is the lesser of 3 to 7 times revenues, or one year profit.  My guess is profit is nearly zero, and at best, no one would pay more than 3X annual revenues for a small biz.

In reality, the purchase price might include the true value of the real estate (if owned) and perhaps existing stock and mailing list.  However, most people realize that any MRR stock that is over a year old has little chance of selling (based on knowledge of the pre-order system and other sources that say 90% of any one product sell immediately on arrival, not to mention train show vendors who show up with the same stock year after year.)  Not sure what liquidation value is, but we see prices of used and old stuff on EBay dropping year after year in part because EBay has shown just how not scarce those items are.

In the internet age, you have to wonder what value customer lists have.  Yes, some will give the new owner a chance, but others may not.

Short version is, I think most LHS owners would be happy to just turn over the keys for some nominal payment, just to get out of the losses, but there are obviously a few exceptions.

Related, but does anyone know just exactly what the original Caboose sold to the new owners for?  I recall Allied Model Trains went on the market for $3 Million around 2000, which was reportedly 1X their annual revenues then.  However, that was over 10 years, and owner was a bit more vague as to that consistency, i.e., was it $5 Million in the first year and $500K in the last, etc.  BTW, while we all love eye candy, it seems telling to me that both Allied and Caboose new owners chose a less grandiose business model, cutting store size and stock by quite a bit.

Just random thoughts. 

[perezbill]

On thing I recently noticed is that Caboose is no longer a sponsor of the What's Neat This Week video podcast. I noticed it missing from the show sponsors a few weeks or so ago. Guess what has happened to them based on other things I have read explains it all.