The chief executive of Hornby has said the company was in "chaos" when he took over almost two years ago.
Lyndon Davies, who was appointed in October 2017, said that the senior management had to be removed as they did not understand the business.
Hornby is best known for its model trains, but also owns Airfix and Scalextric.
The new management reduced losses to £5.2m last year from a £10m loss in the previous year.
"I would say it was chaos," Mr Davies told the BBC's Today programme, when asked what state the company was in when he took over.
He said previous managers had not understood how to work with overseas suppliers and, in some cases, had been waiting until November and even December to talk to suppliers about what they wanted for the following year.
"It is a bit like turning up when the restaurant is shut and finding that you're not served and that's what the company was doing," Mr Davies said. "It didn't understand how to mange its supply chains."
He also accused previous managers of not understanding the market that they were operating in.
"Hornby is not a toy company," he said.
He pointed out that many Hornby customers are collectors and hobbyists.
"A Harry Potter train set? How does that fit in my layout of Torquay in the 1960s? They can't relate to that," Mr Davies said.
His strategy has been to broaden ranges to appeal to collectors and children. So the company now has Airfix kits which can be built in a day, as well as sets with more than 500 parts that take months to build.
He has also ended heavy discounting which "destroyed trust and brand integrity".
Phoenix Asset Management came to the rescue of Hornby in 2017, when it took a 75% stake in the firm.
In 2018, Gary Channon, the co-founder of the investment firm, told the Financial Times there was no pressure on Hornby to make short-term profits.
"We want to own them for ever," he said.