Hobbico defers stock-ownership payments
January 5, 2017
|Hobbico informed its employees that payments from its stock-ownership plan have been deferred to an unknown date.|
The employee stock-ownership plan (ESOP) acts as a retirement program in which employees are given shares of the company, to be reimbursed after they stop working. It was started in 2005.
On Dec. 30, Hobbico president and CEO Wayne Hemming wrote to current and former employees, in a letter obtained by the Champaign (Ill.) News-Gazette, that the past year had been financially rough due to “intensified competition and what appears to be a hobby-industry recession." He then explained that because certain fiscal and productivity goals were not met, scheduled distributions from the ESOP would be deferred to a later date.
Current and former employees are now attempting to get clarification from Hobbico as to when their payments will arrive.
Others disagree that the industry is in a recession. HMA President, Bob Wilke, told Model Retailer that 2016 had been a good year for manufacturers. "I would not say that the industry is in a recession. At most, brick-and-mortar stores are feeling a compression thanks to shrinking margins, but we are certainly not in a recession."
Fred Hill, HMA treasurer and owner of The Coach Yard in California, says that he hasn't seen a recession within his business. "I was so pleased to see 2016 revenues match those of 2015. For an election year when almost everyone felt uneasy, I consider that a big win."
Hill said that his Christmas season was very successful, and that he is looking forward to a prosperous 2017.
Attempts to contact Hobbico were unsuccessful.