71-year-old owner says Australia’s oldest hobby business up for grabs

A Sydney hobby business that has been operating for 79 years is looking for a new owner.

The owners of Hobbyco, which first opened its doors as K-Dee in 1935, are considering a trade sale or an initial public offering as a way of exiting the business they have owned since 1989.

Co-owner and managing director Michael Wall told SmartCompany he and business partner Paul Parker want to pursue other interests in retirement, including spending more time with their grandchildren.

“I’m 71 so that’s a pretty good reason to think about selling the business I’ve owned for 25 years,” says Wall.

But Wall says selling the business was a difficult decision to make, describing Hobbyco as “a fun place to come to work”.

“Our motto is ‘people who take their fun seriously’. It’s Christmas everyday here.”

Wall says his preference would be for a trade sale, rather than taking the company public, although he admits Hobbyco’s 10 year period as a public company—from 1978 to 1989 as part of conglomerate S Huffnong & Co and later Burns Philp—likely helped the business “keep its head above water” through some difficult times.

Hobbyco currently attracts around 1 million visitors a year to its three retail outlets in Queen Victoria Building in Sydney’s CBD, Rhodes Waterside Shopping Centre and Macarthur Square Shopping Centre in Campbelltown. The business also has a wholesale arm, which supplies around 200 other retail stores.

The business employs more than 40 staff and last year turned over $10 million.

“We’ve had a reasonably good run since August last year,” says Wall about the current state of Hobbyco’s market.

“We’ve seen a continued increase in sales, which were 6% up as of June 30. We’re currently about 7% up on an annual basis.”

Wall attributes Hobbyco’s success to its wide range of products, which includes the full range of Lego and Meccano products, and the fact it does not try to go head-to-head with the likes of Toys ‘R’ Us.

“We’re not seen as a toy shop, we operate in a slightly different niche although we do sell a lot of toys,” he says.

“We specialise in the hobby category.”

Wall says he would like to see a new owner expand Hobbyco’s online presence, which is the direction he feels the business needs to head towards.

Hobbyco has offered an online mail ordering service since 2000, which built on a mail-order catalogue business that had been running since 1954, but Wall says this side of the business could be enhanced.

“There are lots of opportunities online,” he says.