Toy trains derailed by Power Rangers

Hornby, the manufacturer of train sets and Scalextric racing tracks, has been hit by the Power Rangers craze sweeping the toy market.

Ten days before Christmas, the Margate-based manufacturer has warned investors that profits would be hit by poor sales of toys. Shares fell more than a quarter. Although sales would be ahead of last year, they have not matched expectations.

Industry insiders said yesterday's announcement showed Hornby was paying the price for not keeping up with the increasingly fast-pace of the modern toy market where steady products like Scalextric no longer stand a chance against the new generation of television-linked toys promoted by multi-million pound advertising campaigns targeted at increasingly fashion-conscious children.

Power Rangers and Puppy in my Pocket are hits this year. Last year, it was Thunderbirds and the year before that, Turtles. Hornby simply does not have the flair or the muscle to compete.

A spokesman for Hornby said that problems implementing new machinery and a large investment in advertising had added to the difficulties.

Hornby was turned from losses in the 1980s to profits by Keith Ness, chief executive, who hoped that his trains and cars would survive on a wave of paternal nostalgia.

Profits first tumbled in the early 1980s when video games began distracting young boys between the ages of 7 and 11 from their train sets.

Recent attempts to diversify have not solved the problems. Attempts to capture some of the doll market with the launch of an eight-inch ``Cassy'' doll were seen off in no uncertain terms by market-leaders Sindy and Barbie. An expensive advertising campaign failed to boost sales of Scalextric as hoped.

Hornby's complaint that toy sales are not meeting expectations fly in the face of reports from retailers such as Toys R Us and Hamleys - who say they are set to break records - and the company now looks set to follow other British manufacturers like Matchbox and Meccano into foreign ownership.