What was the REAL reason they closed all their stores? Whenever I would Google it, all I got was some technical law jargon on what happened. Anyone know in laymens terms why they stopped? Granted some of their prices were astronomically ridiculous, they had decent selections of VHS and DVD's not to mention a good place for Thomas stuff for the kids. I bought a few hats and a whole mess o' flex track there for less then half off before they went out of business; couple of bridges and track cleaner, books and a couple of DVD's too! What would have cost me over $300.00 I paid less than $70.00 for everything!
Why did they close?

Well, basically they just went bankrupt.

Filed for bankruptcy under Chapter 11 in February 2000, were given time to try to reorganize as a going concern by raising new capital while being sheltered from their creditors. They were not were not successful in raising new capital and reorganizing, so the court approved a liquidation.

Standard business failure, nothing sinister. Expenses exceeded revenues until they ran out of money.

The real reason The Great Train Store went bankrupt is sadly the same one that many franchise operations go bankrupt - they take an idea that basically worked only in a limited scenario and tried to apply it universally.

When the stores were located in railroad stations (Washington) or stations converted to shopping malls (St.Louis, Indianapolis), the concept worked. But there weren't enough of those to suit either the owners or potential franchisees, so they not only expanded to other tourist venues like the New Orleans Riverwalk, but upscale suburban shopping malls as well, like Tysons Corner in Virginia. The potential traffic at these locations was not sufficient to operate profitably.

This was a classic case of demise by overexpansion.

The above reasons were true to an extent, BUT there is a bit more.

I worked in a low-level management position for the Great Train Store (TGTS) company on an off during my winter breaks fireling locomotives at Steamtown for a number of years. Having seen the ins and outs of their policy, I can honestly say that general incompetence was a contributing factor.

Some examples.

Price: The corporate policy was to charge full retail price on just about everything. Therefore, I'd be trying to sell a Lionel Starter set for $375 while (literally) the guy down the street was selling it for $250, or on the Internet for even less. Also, when mom can buy a wooden Thomas the Tank Engine figure for $7 at AC Moore or Michaels, why would she pay $10.99 with me?

Core Concept: TGTS was essentially an "impulse buy" company. The 1st stores were located near railroad related attractions and travel centers, the Scranton location was #8 (with St Louis Union Station being #1). They were essentially high-end novelty shops. Very few people went to TGTS and said, "Oh, I'll save up for that". They saw what they wanted, went home, did some research and bought it somewhere else. The "Gotta Have It Now" people, are who we sold to, for the big-ticket items at least. They did expand beyond what should have been a core group of stores. More selective locations would have mitigated some of the company's woes.

Direction: TGTS never seemed to know what it wanted to be. A toy store, novelty shop, hobby shop perhaps. My opinion was that if we weren't going to be price competitive on the hobby items, we should concentrate on the toys and the unique items like local tee shirts, railroad logo plaques and mugs. You get the idea. My opinion was not shared.

Product: Stock was ordered through corporate HQ. So we often would not get enough of what we needed. Take those porcelain coated railroad logo plaques. We'd sell ones from the PRR, CNJ and DL&W like they were going out of style. Yet, when our stock would come we'd get 6 DL&W along with 6 CNW, 6 MKT, you get the idea. There were items we could and did sell quickly; we just couldn't get our hands on them. By the time we liquidated, I had a stack of Union Pacific shields about 2 feet thick in the stock room. Likewise we had an amazing array of Southern Pacific HO diesels by Athearn (do we really need 24 tunnel motors?) but getting the EL GP-35's and PA's was a real challenge.

At times it seemed as though our buyers had the attention spans of those children they were buying for. Foam monkeys on a stick, JJ the Jet Plane tapes and tacky rock crystal sculptures and doll magazines started to invade the stores in later years, which would have been fine if they sold.

Failure to adapt: TGTS never embraced the Internet. There was no hard catalog for what the store could order/ship, only a loose networked listing of store stock at each location, which was somehow never accurate. We had catalogs by individual suppliers, but it was labor intensive for the customer and us, going against the whole impulse buy trend. Ever try to order a Willey's Jeep in HO scale from Walther's Catalog? Don't.

Those are just a few cases, the major contributors to the downfall of TGTS in my opinion.

To this day I believe the concept can and would work in a limited application scenario of perhaps 2 dozen stores. Demographic based stocking, competitive pricing and a trend away from the hobby items (while keeping some) towards the novelties and toys would play in the market today. I've got the plan and the experience, any venture capitalists out there? A concessionaire to operate Museum Stores for rail-related attractions?

Come on, "Kalmbach" needs a company store!

Dave Crosby

Here are my observations, first as a customer and then as a supplier:

As a customer, the original stores in "rail" locations were great when I was on Amtrak trips since they had most of the major rail magazines for me to stock up reading material for the train trip ahead. Price on magazines are not an issue, but I know you can't pay the rent selling Trains and Model Railroader.

As a vendor, I was on a business trip to Cleveland and every evening I was trying to find places to sell "The Next Station Will Be" which was a series of books of stations on the Erie. TGTS at Terminal Tower in Cleveland was interested but as Dave pointed out all decisions were made on purchasing in Dallas. The store manager gave me the buyer's contact info and we were able to sell them a lot of books (for us anyway). We had to ship them to the individual stores and I was amazed at where we were sending them - 10 copies of the New York & Long Branch to a store in southern California, 2 to the Woodbridge Mall in N.J. (and right on the NY&LB!). Looking back, I am thankful we got paid for all of our books before they went bankrupt.

I think you have described the problem quite well. The TGTS was located in North Point Mall in the yuppie area of Atlanta no where near a railroad. I would go in and visit and check prices, but I found that I had a better deal from Trainmasters hobby shop (about the same distance from home as TGTS but in a different direction) and could save 10% or more. Trainmasters is across the street from the Southern Ry Atlanta-DC main and about 60% of the time I see a freight rolling by. Much more enjoyable than North Point Mall and the only thing to watch was kids on a merry go round.

The presentation was good, but access to items I wanted were expensive when in stock.

Oh well, TGTS is gone but Trainmasters is still here and selling my books as well.

FWIW

Doug

As a sales associate when the company folded, I'll agree with all of the above points, particularly the one about getting stuff that didn't sell and not getting stuff that did. We had regular customers who would be clamoring for something, and we'd pass that on to Corporate. If they ever deigned to send us what we'd requested, we'd get maybe two or three of 'em when we had at least five customers wanting it.

I'd add one more reason to the list -- a general lack of decent help. We DID have mostly railfans and modelers on staff in our store in Columbia, SC towards the end. Melody had helped open the store and made up for her lesser knowledge of trains with her "mommy" POV and great customer service skills. The last manager (promoted from assistant shortly after I was hired) was a modeler, and he recognized the value of staff who knew the subject. We had a darned good crew at the end, along with a good-sized, loyal base of regular customers. If Corporate had let J.R. alone to run his store, or even just cooperated in getting him product when he asked for it, we could have done really well even with the price point disadvantage.

I'm well aware that our staff was the exception, though. Most TGTS sites hired high school and college kids that were totally clueless about trains and had no concept of customer service.

Probably because of the lousy staff elsewhere, Corporate frowned on us working on the display trains that ran on the overhead trestles. I let 'em frown and worked on the things anyway. I figured out one time that just one of our LGB trains ran the equivalent of a round trip across country every year. Ever seen a plastic LGB wheelset after it's run about 500 miles around a track with only left-hand curves? And getting replacement wheelsets was ridiculous -- they wanted us to send the whole damned car or engine back to Germany because we'd literally run the wheels off it, instead of just buying replacement wheelsets for us to pop in. I started cannibalizing and swapping parts as soon as the manager realized that I knew what I was doing with the trains.

As a supplier to GTS, I'll also agree to their policy of placing locally or regionally focused products at stores far removed from where they would sell. For instance, they would buy videos of, say, B&M and then send them to New Orleans or California. I tried several times to get them better focused on distribution but they never seemed to get it. Also, they went through several company buyers and all but one had no idea what they were really buying. Sometimes they would over buy, sometimes under buy.

Although I sold them a lot of videos, in the end, I got caught in the bakruptcy with several open invoices which were never paid. They were always slow to pay.

I agree that the concept, if available at a few really sensible locations, could still work. However, it would really have to be a small number of stores and that might not work for any real franchise sellers.

-Jim Herron

Having been around and in the one in DC Union Station over the years it was there, I was always astounded that anyone would pay full price for their stuff. I think I bought a few magazine issues of things I didn't already subscribe to, but that was about it. I know some of the local fans called it "The Great Train Robbery".

Really, hobby shops are probably best done as local mom-and-pop operations. I think the most successful ones develop a rapport with the local hobby and fan community. The best ones often have a model RR club layout in the basement or elsewhere on-site. It gives them a built-in customer base among other things.

As for not emphasizing local railroad products, I remember that a lot of fans in Ohio when I was much younger had a real thing for Western roads like ATSF, UP, DRGW, etc. I guess it's a "grass-is-greener-on-the-other-side" thing, so maybe there is something to be said for stocking some out of the area things, but not to the exclusion of local favorites. The corporate honchos were probably not fans at all.

On a related note, I regularly pass the hobby shop along the tracks in Ashland, VA. A couple of years ago, I asked a fan I know who's been there if they had much of a selection of regional railroad items. The reply was that he didn't see ANY RF&P, C&O, or SR stuff in the store. Just makes you wonder.

I'll echo most of the sentiments here. I speak as an associate in the Westbury L.I. store, and then as fill in manager at The Palisades Mall.

The buying policy was a little absurd in the sense that our dead stock was mostly the western stuff. No Long Island rail buff is going to buy a book on the SP&S, for example.

One day, I got fed up with it, and busted open the Walthers book and placed a $300 order for various pieces of of HO stuff like LIRR, Metro North, etc. We got the stuff in, displayed it, and it sold in a flash. So I repeated the process.

Our district manager (who was originally my store manager, so we had a good relationship) called up one day and said "Dallas (our home office) wants to know why some sales schmuck in Long Island is doing the buying job better than the people they hire for it at the home office."

From then on, the home office buyers KINDA helped us out and started ording local stuff as per my requests, but I can't say or have any idea if they were doing this for other locations across the country.

One of TGTS's biggest problems was the fact that our VP was siging some absolutley moronic lease agreements in some bad locations. There was no way that the company could have met the money guidelines set down by these agreements--the traffic was just not there.

Then of course there was all of that stupid clothing line that they started to deal with in the end. "Iron Horse" clothing? As Orson Wells once said "Come On, fellas, we're losing our heads!"

I still contend to this day that if the company would have consolidated to the Northeast, then we would have made a killing, as that was just about the time that that Thomas The Tank Engine movie was about to be released in the theatres. Half of the company's business was Thomas, and it was a beautiful thing when the money was rolling in.

After 8 years dead, though, it was still one of the best jobs I ever had. Come on.....I got paid to deal with all of this stuff that I usually had to pay FOR to read and watch. Sure, it wa sa retail job, and I wouldn't get a REAL RR'ing paycheck until I left L.I., but it was fine by me. And one of my closest friends to this day came from that job.

So RIP, TGTS. As much of a pain in the ass as it was, it was still worth every second.

This has been an interesting thread, however I would like to try to link it to railroad preservation.

Does your railroad museum offer limited run scale models? Are they prototypical or some sort of billboard car? My experience is models don't move very fast from the shelves at a museum. I don't think any museum I have been to offers a full-service hobby shop as part of its operation. It might be an interesting combination, in the right market.

In 2006, I released a 400+ page book on the local Gainesville Midland Railroad and its history. I took it to the Southeastern Railroad Museum because I thought it would be a great seller there. In fact GM 203 is in their collection.

The store manager glanced at the book (did not even take me up on my offer to take one and read it) had two comments - 1) there were not enough pictures and 2) it was too expensive ($45.49 list).

I am guessing that the manager was only interested in kid's stuff.

Doug

We stock a few of the Corgi and St. Petersburg models of Washington, DC PCCs, plus an O gauge unpowered Birney in PTC colors. For a while We also had the Corgi "disco" Pittsburgh PCC. I think the turnover is slow for these items. The Birney serves well as an eye-catcher in the display case with the PCCs.

Our manager keeps a good mix of traction books and videos but at lower price points (usually less than $30). The higher price books just don't sell well. My observation is that the general public will not make the investment and visiting railfans just browse and shop elsewhere at lower prices.

The LGB friction toys - locomotive, and the tram and trailer sell very well.

For what it is worth, we have averaged $1 in sales for every fare sold. This benchmark has held steady for years. You can almost bank on it at the end of the day.

Wesley

Regardless of whether they sell well, shouldn't railroad museum gift stores always stock a few books of significance to their mission and collection? I think the items for children are great, but the gift store could also serve to continue the educational aspirations of the museum.

I generally visit a major museum at least twice a month, and it is very common that the books in the store are selected to allow visitors to pursue a more in-depth study of the museum's subjects. It is also common for special exhibitions to have a small study area with a selection of books and computer-based materials for patrons to examine. These same (expensive) books are always offered for sale nearby. I have heard a number of times that museum shops are some of the most productive retail spaces in the world. The huge number of glossy exhibition catalogs sold would indicate that art museums (at least) can put some people into a buying frenzy.

I don't think it makes sense to have many hobby items unless there are no other hobby stores around. Hobbyists should be expected to make up a small portion of any museum's visitors. To continue the comparison from above, it would almost be like selling art supplies at the Metropolitan Museum of Art.

There are a lot of books on railroads and railroad technology that are published for a mass market, and a lot of them are at pretty good price points. Anyone have experience with how well they sell at railroad museums?

I agree. When I worked in retail we had a group of items we called "never outs". The point was that there were a few standard items we always carried regardless of sales turnover. Titles related to the local mission and collection would be an example. At the Museum our self-published "Capital Transit" by Peter Kohler falls into this category.

Wesley