Model train maker Hornby hires Ashley as consultant

MODEL train maker Hornby has hired Mike Ashley as a consultant, weeks after his retail empire Frasers upped its stake in the business.

Mr Ashley will be working as an unpaid consultant to the Hornby chief executive Olly Raeburn under the new deal. He will offer advice on operations, logistics and, “where relevant, broader matters of strategy”, the company said.

It comes just weeks after Frasers moved to become Hornby’s thirdbiggest shareholder, raising its stake from 2.4pc to 8.9pc.

The news sparked a surge in Hornby’s share price, rising by as much as 50pc on the day.

Despite the uplift, Hornby shares remain depressed compared with where they were during the pandemic, when lockdowns caused a spike in demand. It is trading around 50pc lower than it was in early 2021.

The model train maker, which also owns the Scalextric and Corgi brands, has struggled under higher costs over the past year. In November, it posted a pre-tax loss of £5.1m for the first half of the year to Sept 30, widened from £2.9m a year earlier. Its sales were up by around 6pc year on year to £23.8m.

Hornby said the deeper loss was driven by general inflationary costs and higher minimum wages.

It is also racing to try to modernise its products. It makes replicas of historic trains such as the Mallard and the Flying Scotsman, but has been trying to make its products more hi-tech, including new control systems that use Bluetooth to connect to phones or tablets.

Frasers has previously said it wanted to explore opportunities to work more closely with Hornby.

Mr Raeburn said last month: “We look forward to exploring commercial opportunities in working together to unlock the full potential of Hornby’s much-loved brands.”

The consultancy agreement mirrors one Mr Ashley struck with Frasers last year after he stepped down from the helm of the company.

At the time, Frasers said he would be advising it on supply chain and operations. Hornby is among a series of recent stakes Frasers has taken, with the company having also taken large positions in rivals including Currys, AO World, Boohoo and Asos.