By David Owen

hornby velodrome_26-09-12September 26 - Hornby, the well-known toymaker, has warned that this year's performance will be "constrained significantly", in part because of lower than expected sales of London 2012 merchandise.

In a statement that may set alarm bells ringing among others with a finger in the London 2012 commercial pie, Hornby said: "Whilst, prior to the Games, major account listings for our products were strong, and consumer purchases were encouraging, the major retailers had also purchased substantial quantities of London 2012 merchandise from other licensees.

"Faced with lower than expected sales, the major retailers resorted to deep price discounting.

"The consequence of this for Hornby was that retailers lost confidence in many categories of London 2012 merchandise, and repeat orders for our products were cancelled."

This must have come as a particular disappointment to the company, since it had said in June that sales of London 2012 merchandise were "gathering momentum".

At that time, sales of London 2012 branded bus and taxi model ranges were said to be "very successful".

Other London 2012-related items sold by the company include a Scalextric Velodrome cycling set (pictured top) at £69.99 ($112/€88) and a London 2012 train set at £99.99 ($162/€126).

hornby-london-2012-jpgLower than expected sales forced retailers to make significant price reductions

London 2012 merchandise was being advertised on the company's website at time of writing at up to 85 per cent off.

The lower than forecast sales came in spite of the British team's strong performance: Hornby's London 2012 brand ambassador, cyclist Lizzie Armitstead, actually won Britain's first medal of the Games – silver in the women's road race.

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