It's difficult not to feel sorry for Hornby - and not just because its product lines are a gift to headline writers who gleefully declare it has 'gone off the rails' or is 'losing steam'.

It is one of the companies that will forever remind people of a simpler time; when watching a miniature train endlessly circle an equally diminutive track was the height of entertainment.

A time when 'play station' was two words rather than one.

However, as is so often shown in business, a proud heritage does not necessarily translate into sales. If it did we'd still have Woolworth's, Kodak cameras, and considerably more music shops.

Today Hornby, another great legacy brand, released a profit warning.

Yet this venerable firm has not been resting on its laurels.

The group recently produced a string of Olympic-themed toy train sets and a chrome finish model of the Olympic Velodrome, for example.

However, while choosing to compete for a share of the Olympics pot of gold may have seemed an obvious thing to do, it turned out to be a mistake.

"Sales of London 2012 merchandise were lower than forecast. 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," the group said in a statement.

The market was essentially flooded and as soon as the Olympics were over the products that weren't sold became instantly worthless.

Faced with lower than expected sales during the Games, 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," the company said.

Other travails were out Hornby's hands.

As well as weaker than expected demand for London 2012 merchandise, business was damaged by disruptions in China when a supplier decided to shut down several factories.

The result is Hornby expects results to come in below expectations, hoping to break-even for the financial year ending March 31st 2013, but this is the second profit warning of the year, raising questions about its place in the modern world.

Hornby argues its product range still stands it in good stead; its Scalextric Star Wars set recently won one of three best new toy awards at the London Toy Fair, while the company continues to make good progress in growing sales in continental Europe.

Against a challenging background, the firm said "we have redoubled our efforts in innovation and product development, building on our core brand strengths and also extending our reach based on newly developed technologies".

However, it remains to be seen if the age of the train is here again.

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