Hobbico Bankruptcy

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My three favorite pictures of Dr. John Langford.

That guy sitting on the dirt in a field in Serbia chatting with an 11 year old junior team member is Langford.

Besides being a great U.S. team manager and scale rocketeer, John also happens to be a heck of a good rocketry photographer.

The last photo, the Sport Rocketry cover, was taken by John.

It has been 49 years since Estes was last owned by a model rocketeer.

I wish the Langfords the very best in the auction, and every success after.

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As an employee who worked in a company which was divided between hobby (AeroTech) and aerospace (ISP) for five years let me share my thoughts.

Responding to RFPs and submitting bids to be followed by (hopefully) contracts is a much different business world than the hobby industry.

The mainstream hobby industry is controlled by hobby distributors.
A hobby manufacturers makes the product but hobby distributors are the customers who can make or break you.

While the big hobby distributors such as Great Planes and Horizon were great to work with (As were many medium-sized) many smaller distributors were/are very territorial and did not like the 'big' distributors (Especially Great Planes) invading their turf.
Many of these small distributors were small, family run companies which could not compete with GP and they were hostile to any hobby manufacturer that dealt with Great Planes.
Most of these distributors were/are located in the North East/New England area.
Several times a year I would get calls from them screaming about how unfair GP was and they were going to stop buying AeroTech products unless we stopped dealing with GP.

When Estes was acquired by Hobbico/Great Planes many distributors stopped carrying model rockets (Horizon for one).

Now that Estes will be separated from Great Planes previous hobby distributors may want to carry model rocket product lines again.
Some of the small distributors may demand their 'pound of flesh' before carrying Estes products.
The new owners of Estes may have some serious schmoozing to do to lure these previous distributors back into the fold.
Hobbico/Great Planes was such a juggernaut that Estes could get by without as many hobby distributors as it had before.

Mass-merchandisers (Wal-Mart, Target) will be wild-cards with a lot of power now over how Estes can/will go.
 
Hello all, I’m new here on TRF and for my first post I’d just like say how exciting it is to hear that Estes has been acquired by model rocketry enthusiasts! Whoever knows John and/or Ellis please encourage them to bring back the Mega Der Red Max and expand the PS II line!
 
Everything I can find online shows Estes Industries, LLC is Estes rockets. So are they buying themselves out of Hobbico and going solo?

Well, it's possible there could be existing or past Estes or Hobbico people in the corporation, and we assume John Langford is involved, but the only one we *know* is in it is Ellis Langford. So we'll just have to wait for the smoke to clear.
 
I wonder if Vern chipped in a few bucks.....

What do Space-X and the new Estes have in common?

Well, it's possible there could be existing or past Estes or Hobbico people in the corporation, and we assume John Langford is involved, but the only one we *know* is in it is Ellis Langford. So we'll just have to wait for the smoke to clear.
 
Beats all other viable alternatives!

a


I meant that in a good way, as in, it will be interesting to see where the new owners takes the line of Estes rockets, new products, etc.. I just didn't want to type all of that at the time, but now I have so...:lol:
 
No, Estes Industries LLC is a legal entity that was setup by the Ellis Langford.
The buying entity's name is a bit confusing.
See bottom of page 2 here: https://www.sos.state.co.us/biz/ViewImage.do?fileId=20181220595&masterFileId=20181220595

a

I work in real estate. We create LLC entities all the time to own property. For example, we had a property with the address of 77 Oriskany Drive. The owner was 77 Oriskany, LLC. It’s a quick, cheap way to set up a limited liability business.

Chris


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How soon do you folks expect any changes, if any, to materialize? I realize I'm asking for pure speculation, but I've never worked outside of the service industry.
 
How soon do you folks expect any changes, if any, to materialize? I realize I'm asking for pure speculation, but I've never worked outside of the service industry.

Totally depends on Mr. Langford. He could just maintain the status quo for awhile as he learns about the business and formulated plans. Or he might have some big radical plan in mind and things will start happening immediately. Who knows.

The good news is that, since he is a rocketry enthusiast, you would not expect to see any visibly destructive changes happening quickly. Presumably he wants Estes to succeed as a model rocket company.

What I would love to see is some sort of public statement by him. I think that’s reasonable to expect in the form of a press release by Estes sometime soon.
 
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Blah blah looking forward to blah blah continued blah obligations blah valued partners blah blah excited blah new chapter blah and so forth.
 
While I am hopeful that the business thrives, for the sake of the hobby, I would also like to extend a thought toward our friend jumpjet. May he have continued success where ever he may land.....
 
I spent an hour with Milton on March 21.
The Fonz was there as well.
And Bill Burr hosted.


That isn’t going to be fun for Hobbico people, I doubt most will be kept on. It’s like the movie office space but real life.
 
That isn’t going to be fun for Hobbico people, I doubt most will be kept on. It’s like the movie office space but real life.

Perhaps, but it's a small industry and plenty of people know each other. There may be some downsizing overall but I have a feeling that those who want to stay in the hobby business will be able to do so.
 
Now that the Langford Group has purchased Estes, I wonder how much additional capital, if any at all, they'll invest in the company.
 
Now that the Langford Group has purchased Estes, I wonder how much additional capital, if any at all, they'll invest in the company.
I would not jump to conclusion that lack of capital was holding Estes back.

Estes has a great brand, and for all we know, positive free cash flow. Getting a line of credit to fund working capital needs should not be a problem.

Beyond that, it is not at all obvious that they need anything. Other than focus on their product line, and erasing Hobico's overhead and debt load, which the chapter 11 has just accomplished.

Steady as she goes...



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From this article: https://www.news-gazette.com/news/l...et-division-family-enthusiasts-7-million.html

Hobbico sells model-rocket division to family of enthusiasts for $7 million

Fri, 04/06/2018 - 7:00am | Ben Zigterman

CHAMPAIGN — During its bankruptcy auction, Hobbico sold its model-rocket unit, Estes, to a family of model-rocket enthusiasts for $7 million.

"My dad flew rockets when he was a kid. Then I started flying rockets. When the opportunity came up, we put together a bid," said Ellis Langford, president of the group that bought Estes. "We're excited to be able to keep Estes going. It's been around 60 years, and we'd like it to be around for 60 more years."

Estes Industries was founded in 1958, in Penrose, Colo., and Hobbico bought it in 2010.

Hobbico filed for Chapter 11 bankruptcy protection in January and held an auction last month to sell its assets.

It sold its remote-control units to Champaign-based Horizon Hobby for $18.8 million and Estes to The Langford Group. The auction is temporarily suspended for the units that have yet to be sold.

The Langford Group is expected to close on its purchase of Estes from Hobbico "in the next few days," Langford said.

Estes has about 30 employees, all in Colorado, Langford said, with some Hobbico support staff in Champaign who worked with Estes.

But "there were no dedicated Estes people in Champaign," he said.

Estes touts itself as the leading model-rocket manufacturer in the world, and Langford would agree.

"It's a very solid brand with enormous name recognition," Langford said.

He flew Estes model rockets as a kid and became an aerospace engineer.

The rockets "just got bigger over time," Langford quipped.

Langford, who lives in Washington and grew up in Virginia, said he'll be moving to Colorado to run the company, which he said is mostly in good shape.

"We're going to be doing improvements internally to the company," Langford said. "Our biggest asset is producing model rockets here in Penrose, and we're going to continue that. We intend to still be the largest supplier of rocket engines."
 
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