The company, which also owns the Airfix, Corgi and Scalextric brands, said Richard Ames has stepped down and left the business “with immediate effect” after less than two years in charge.
Ames, a retail sector veteran, was previously managing director of the products division at bookmaker Ladbrokes. He was appointed chief executive of Hornby in April 2014.
The group’s chairman, Roger Canham, has taken over as executive chairman and will lead the group “for the foreseeable future”, Hornby said.
On Wednesday, Hornby saw its shares more than halve in value after news of a “disappointing” start to the new year dented recovery hopes.
The group said UK trading was far worse than expected in January as its new year promotions failed to boost flagging sales.
It now expects to post “substantially” wider underlying pre-tax losses for the full year of up to £6 million, and revealed a £1m write-off after reviewing its stock and balance sheet.