Allied Model Trains in Los Angeles Closes

Model Railroader General Discussion (Model Railroader)
1

Allied Model Trains, one of the Los Angeles area’s oldest and largest model railroad hobby shops, has just closed, effective today.

Allied originally opened in 1946 in the West Los Angeles area, with a large, highly-stocked store on Pico Boulevard as their longest storefront. In 1989 they moved to nearby Culver City, to a custom-designed building fashioned after L.A.'s Union Station. In 2007, the store’s owner Allen Drucker sold the store and leased the Union Station-style building to local photography retailler Samy’s Camera. Allied was purchased by the owner of former competitor The Original Whistle Stop in Pasadena and moved to a smaller storefront just across the street from the Union Station-style store in Culver City where they have been since.

The store’s proximity to the entertainment industry made it a popular store for model railroading celebrities like Frank Sinatra, Rod Stewart and Gary Coleman.

There is no closing sale; the store’s stock is expected to be moved to The Original Whistle Stop in Pasadena.

Their website currently reads:

Dispatched from Allied Model Trains, Culver City, California

July 7, 2015

It’s with great sadness we send this message to our friends, customers and vendors.

As of today July 07, 2015, we are closed. Due to circumstances beyond our control, the stockholders had to close and declare insolvency.

We had sixty-nine wonderful years and we are sorry the journey has to end.

All of us at Allied Model Trains, Nick, Fred, George, Karie, Sam, and Dave thank you for all the years of support.

Allied Model Trains

2

Too bad. Another sad sign of the times I guess. I’m sure there will be more.

Dave

3

Quote - "As of today July 07, 2015, we are closed. Due to circumstances beyond our control, the stockholders had to close and declare insolvency." - end Quote.

Stockholders had to close? So this business was not privately owned? I wonder since there have been many cases where small to medium sized businesses that were owned by a corporation were either sold off or shut down, even if they were making a small profit.

I wonder what the actual case is with this business? Rising taxes due to their location? Increasing liability insurance? Past frivolous litigations?

Just wondering behind the keyboard but from my understanding, California’s business tax structure, high rental rates in metropolitan areas, and insurance regulations are not friendly to small businesses with small profit margins.

4

LA’s new $15 minimum wage didn’t have a thing to do with this.

5

My understanding is that Allied was acquired when the Druckers sold it in 2007 via a partnership. I believe the partnership at that time was between Fred Hill and Brian Brooks of The Original Whistle Stop in Pasadena and Nick Barone, formerly an employee of the Drucker Allied. Apparently Brian Brooks left the Whistle Stop partnership about 2010, and although Fred and Nick are mentioned in the message, he is not.

I don’t understand the reference to stockholders, as I don’t believe this was ever a stock corporation.

My subjective impression has been that things hadn’t been doing very well for Fred and The Orliginal Whistle Stop, either. I would not be surprised at an equivalent announcement in the future from them.

6

And the politicos think these things will not affect buisness! I see mass closings of things like restaurants, already happening in some citys which will lead to more unimployment.

7

Many closely held (privately owned) businesses issue stock. And often these stock holders are famly members, owners, business partners, etc… But this stock is not publicly traded.

8

It did not, because the $15 wage has not yet gone into effect (it won’t fully go into effect until 2020) and that Allied Model Trains is (was) located in Culver City, which is a different municipality.

9

“Stockholder” can just as easily refer to multiple private investors in a privately held company.

$15 minimum wage - that wqould get me out of the hobby shop business real fast.

I don’t really know much about California, never been there, but what I have heard would keep me away.

Sheldon

10

FYI, the $15/hr minimum wage in the City of Los Angeles does not go fully into effect until the year 2020, and Allied Model Trains is located in Culver City, a different municipality. So much misinformation here.

11

Restaurants? The average lifespan of a restaurant is 5 years and 90% go out of business within a year of opening.

Source: restaurantnews.com

http://www.restaurantnews.com/restaurant-industry-trend-the-move-towards-a-more-upscale-look/

It’s a tough business. Most don’t make it and it has nothing to do with the minimum wage.

Andre

12

Never let facts get in the way of a good rant.

13

Wow! It’s interesting how a discussion on a hobby shop closing segued into a discussion about minimum wage.

sort of back on topic, I think it’s really sad and unfortunate when such venerable institutions as Allied close their doors. When I lived in So Cal, I never went to Allied. Not because I didn’t want to, but I would’ve had to make a special trip to go there. I hope The Original Whistle Stop can stay in business. I used to shop there a lot. This was when they were further east close to Rosemead Bl.

Allied ran ads in MR ever since I can remember. They might have even run ads in Model Trains. We all know things change. That’s life. But, it’s a little sad to see something like these “anchors” fall by the wayside. Progress? I dunno.

I do support my LHS when I buy something. I just don’t buy that much these days.

14

You are so right Sheldon, I’m trapped here!

Mel

Modeling the SP in HO scale since 1951

My Model Railroad
http://melvineperry.blogspot.com/

Bakersfield, California

15

AFAIK Allied had no real Internet presence and that’s a real necessity these days. You can’t rely only on walkup business anymore. I always had positive experiences there and the staff was great. I’m sad to hear it’s gone but I think it was just in a location where the demographics for that kind of hobby just doesn’t exist anyone. Also it’s on the West side of LA which is a traffic nightmare 24-7, I don’t go out that way anymore simply because of the woeful traffic. I go to Whistle Stop fairly often I hope that they can survive the new economic model. They seam better located as they are usually pretty well patronized.

16

Easy on the “misinformation” stuff. A couple people posted an opinion that differs from yours, so you post the same thing twice and decry “misinformation.” It may be that they thought LA City and LA County operate under one government. Or, it could be that, again, you think your opinion is “right,” and anyone who disagrees is “wrong.” The problem is, you can’t have actual economic growth simply by saying a fast food worker should get $15 an hour. Most companies can’t afford to almost double their payroll and remain in business. Also, increased prices are passed along to the consumer, so you can probably look forward to a $10 Whopper in the near future. Finally, why is it suddenly so important for burger flippers and other unskilled labor to earn the same pay as many people in private industry or government?

17

I would agree with that, but the fact is, the $15 minimum wage won’t go into effect for another 5 ye

18

As I understand it, what eventually brought Carstens Publishing down was legal action from a bank. I’ve got to guess something like this was involved with Allied. Allied was in some sort of credit problem it couldn’t resolve and was presumably forced into bankruptcy.

A question raised on another forum was why Allied didn’t hold a going-out-of-business sale. The short answer would be that the stock is being moved to The Original Whistle Stop, where it will presumably just go on the shelves at MSRP.

What really went wrong and caused the closure is another question. If you check the Yelp reviews for Allied, they’re pretty lukewarm, a few wow! greats! balanced by a lot of complaints about unfriendly staff, parking, and so forth. Remarks on other forums suggest that for years, there hadn’t been new stock, out of stock items hadn’t been reordered, etc, which suggests to me that Allied had been put on credit watch by its distributors.

The same problems of no-new-stock, out of stock reorders, unfriendly staff, etc have gotten especially bad at The Original Whistle Stop in the past few years.

19

If you have to depend on bank credit or distributor billing cycle grace periods to stock the shelves of your store - you are already in trouble.

Start up capital is one thing, holiday terms from distributors another, but generally you need to be able to own what is on the shelves or you are headed for failure.

My view on this comes from several decades in retail, some in the hobby/model train business, and some as an owner in another retail business, not to mention nearly 30 years of self employment in various businesses.

Sheldon

20

As someone who works in the lending industry, I’d say your observations and suggestion sounds about right…as general retailing goes.

They may not have been allowed to draw on a line of credit or use supplier grace period due to slow pay in the past, or in more recent times, lenders try to forecast the future of a retailer and if they don’t pass the “test”, the line is not renewed even though the retailer may not have ever missed payment.

Since the inventory was moved to a different location, and not liquidated, its possible the lenders and suppliers are satisfied that Allied’s location was a big part of the problem.

I know nothing of their situation. They may not even use credit and the closure could be strictly an internal strategic decision.