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  1. #11
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    Actually, here in the States the economy is starting to look up, so logically their sales would be marginally higher than expected. If their prices were lower, and they stopped hiking them up and lowering their store hours, odds are they'd sell more minis. Hell, if minis cost less I'd buy a hell of a lot more of them. Odds are, as a whole I'd probably end up spending even MORE money at GW than before :U

    Edit: And if their stores were open longer, they'd probably sell more as well. Many of the players I know spend their time testing new models and whatnot in-store, and then chunking/buying new ones. Experimentation aside, just the general elongated exposure to the minis would produce a greater amount of sales.
    Last edited by LoverzCry; 01-06-2011 at 01:14 AM.

  2. #12

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    Any company that draws the majority of its income from UK sales has been hit hard, the weather over the past few months has hit the retail industry hard. Its not just GW. I have friends in a company that make boutique dresses, they have had the worst sales in the past quarter that they have ever had for this same period. Not only could their customers not get to their stores, sometimes they couldn't even open their stores. Their online store did well for a while, but then they had trouble getting to the warhouse to package orders, on top of that the postal issues meant that they were lucky if the courier could get there to collect the orders. When they did, it took weeks longer for orders to arrive.

    LoverzCry, for all we know US sales did go up, they haven't released a breakdown of sales region by region as they do in their annual reports. If the UK and Europe were hit hard enough it would more than compensate for any rise there. Its worth noting the decline in European sales over the past few years of the financial crisis and debt concerns have largely been responsible for GWs mythical 'sales decline'.
    Last edited by eldargal; 01-06-2011 at 01:33 AM.
    Ask not the EldarGal a question, for she will give you three answers, all of which are puns and terrifying to know. Back off man, I'm a feminist. Ia! Ia! Gloppal Snode!

  3. #13

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    I somehow really doubt that the "financial crisis" has very much to do with GW's problems with sales volume, at least in the States. I'm fairly certain that the people that were buying GW product in the first place are neither the low earners that suffered the most job loss, nor the urban professionals whose precious mindless 10% tanked along with Lehman and pals. In other words, all of the unemployment hooplah we hear about is mostly among groups that traditionally have higher unemployment anyway, teenagers, minorities, and those without a useful college degree, none of which are really people that GW was probably depending on, as the kids/teenagers retained their employed college educated parents.

    The other side of the coin is that of course a lot of people lost money they had invested in various index funds, mutual funds, portfolios, etc. but again, I would imagine that most 40k players do not keep portfolios and so the crash would not have done much to em. That said, I don't know enough about the European economy to comment on what happened in merry old England, but in the States, I really doubt it was a factor.

    Anyway, I'm pretty sure the problem has to do with GW underestimating just how much money their employed adult fans were dumping into their coffers when they murdered Chaos Marines (the 2nd best seller in 3rd edition) along with Dark Angels, and dragged their feet on updating a slew of other armies, causing people to quit. Hell, I pretty much stopped playing with the Gavdex in 2007 and buying any GW product up until DE launched and I am far from the only case.

  4. #14

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    The general sales decline has been in Europe, and its not just GW, its the entire luxury goods industry. This profit warning is most likely prompted by the terrible Christmas retail conditions, particularly in Britain. The US wing of GW has its own problems, but sales haven't been too bad its true.
    Ask not the EldarGal a question, for she will give you three answers, all of which are puns and terrifying to know. Back off man, I'm a feminist. Ia! Ia! Gloppal Snode!

  5. #15

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    Aye this is a European issue or more specifically a British one, down to the economic situation. The US Market stable or not contributes less to GWs sales then say the UK.
    Curious Constructs - http://www.curiousconstructs.co.uk
    Kirton Games - http://www.kirtongames.com

  6. #16

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    I have stopped buying GW models and have no plans to buy anymore. They are now far too expensive. I have moved to other systems where the models are more realistically priced. I am also in the process of replacing all of my paint from GW to Vallejo, not so much because of price but because I do not like the new pots at all. I never got my brushes from or glue from GW anyway.

    So over a year I have gone from being a regular customer, to only buying spray paint.

    How many others are there out there like me?
    Last edited by Aldramelech; 01-06-2011 at 09:23 AM.
    To a New Yorker like you a hero is some kinda weird sandwich, not some nut who takes on three Tigers!

  7. #17

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    A fair few, probably, Aldy. But most of them just buy from online discounters and eBay and then think they are 'sticking it to the man'. At least you are putting your money where your mouth is so to speak. If you think GW products are overpriced, don't buy them. If enough people do that, prices will fall if they want to survive. But instead, most people just buy at above the wholesale price GW sets to keep the company profitable and think they are having the same affect.
    Ask not the EldarGal a question, for she will give you three answers, all of which are puns and terrifying to know. Back off man, I'm a feminist. Ia! Ia! Gloppal Snode!

  8. #18

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    I'd like to preface this barrage of facts and opinions by quoting GW CEO's commentary in the 2009-2010 financial report, "We are not significantly affected by economic factors, as recent results show. Performance shortfalls in the past have been down to the quality of management and decision making." (CEO's Comments, 2009-2010 Financial report, pg 7, emphasis added)

    While this is going on, Tom Kirby is making almost $800,000.00 per year in salary and benefits. This is a salary increase over last year and it does not take into account the value of Kirby's stock which, even considering the 18 percent drop, is worth something like 350 dollars per share. Kirby has nearly two million shares! Also consider the fact that Games workshop paid stock dividends this year to the tune of 25 pence per share. Admittedly, GW has been under pressure from shareholders to pay dividends, but in Kirby's case, and others of the top GW brass, that decision clearly had personal benefits. At about 40 cents per share, Kirby alone was paid almost $800,000.00 in dividends, which brings the total amount of cash he's sucked out of GW this year alone well over a million dollars and closer to two.

    This is going on while GW's sales are decreasing, its profit margin is struggling to remain stable, and when it has little more than 17 million dollars in cash.

    GW's response to falling sales was to jack up the price of it's products and cheerfully suggest to shareholders that this was because, "We know that, for a niche like ours, people who are interested in collecting fantasy miniatures will choose the best quality and be prepared to pay what they are worth." (CEO's Comments, 2009-2010 Financial report, pg 3, emphasis added) In other words, GW is trying to keep itself afloat by bleeding its customers. And let's face it, part of that blood-letting is paying Tom Kirby's outlandishly fat salary. Oh and by the way, Kirby's salary went up in spite of the fact that, "We set ourselves the objective to pay off our borrowings this year and we asked staff to accept a salary freeze to allow us to do that." (CEO's Comments, 2009-2010 Financial report, pg 4, emphasis added)

    Now, Mr. Kirby's salary went up this year due to his "extra" responsibilities in coming to America to develop the market here. I should add here that this invariably involved paying to relocate him as he's in the states 40 weeks out of the year. Plus, he's being paid in pounds but spending in dollars, giving him the best of both worlds from his fat stacks of cash.

    Considering this, let's not forget the ongoing GW v Chapterhouse litigation. Apparently, one of Mr. Kirby's extra responsibilities here in America has been to hire an awesomely expensive law firm to attack a small American business that is ostensibly adding value to the company's own products. We can forget, for the moment, the fact that GW's complaint (parts of it likely drafted by Kirby considering the descriptions of GW fluff) is full of boundless accusations that barely meet the prima facie requirement. We can also forget that the complaint is an intimidation tactic designed to frighten Chapterhouse into going under and terrify the rest of the legitimate small model company market (It was filed on December 21st with a 20 day period to respond even though the attorneys were unavailable until the end of this week).

    Forgetting that, we can focus on the fact that this suit is the second pillar of GW's business strategy next to raising prices! "Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall." (CEO's Comments, 2009-2010 Financial report, pg 3) That's code for, we're increasing prices to account for fewer sales and we're suing the crap out of anybody that could conceivably compete with us in order to make our IP seem fictitiously invincible, so don't worry investors.

    What does all of this boil down to? Games Workshop is attacking its customers and we are paying for them to do it. GW's business model assumes that its remaining loyal customers will happily pay artificially inflated prices and they are using that money to pay ridiculous management salaries and fund overly expensive lawsuits that attack the very community that they are depending on to accept price increase after price increase.

    This not a healthy business model and I, for one, don't appreciate being squeezed by some British company in order to pay a corporate manager's fat salary and terrorize the hobby community. GW's customers need to send a message to GW that this behavior is not acceptable.
    Last edited by weeble1000; 01-06-2011 at 11:17 AM. Reason: grammar

  9. #19

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    To be honest I think the sales problems are more to do with staffing issues than everything else. The retail chain in the UK lost about 60% of it's staff in the last year or so. Not all of them have been replaced. I also think the one man store idea is still to show if it's viable or not. If I had to critique their business strategy at all, I would say that in order to recruit new customers they need available staff to recruit them, so cutting costs by cutting retail staff was not necessarily the best way to go. And the UK retail chain is still the big money maker for GW, so if the UK suffers problems, then GW suffers problems.

    But then again, as an ex-retail manager for GW I'm slightly (read: very) biased.

  10. #20

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    Quote Originally Posted by weeble1000 View Post
    I'd like to preface this barrage of facts and opinions by quoting GW CEO's commentary in the 2009-2010 financial report, "We are not significantly affected by economic factors, as recent results show. Performance shortfalls in the past have been down to the quality of management and decision making." (CEO's Comments, 2009-2010 Financial report, pg 7, emphasis added)

    While this is going on, Tom Kirby is making almost $800,000.00 per year in salary and benefits. This is a salary increase over last year and it does not take into account the value of Kirby's stock which, even considering the 18 percent drop, is worth something like 350 dollars per share. Kirby has nearly two million shares! Also consider the fact that Games workshop paid stock dividends this year to the tune of 25 pence per share. Admittedly, GW has been under pressure from shareholders to pay dividends, but in Kirby's case, and others of the top GW brass, that decision clearly had personal benefits. At about 40 cents per share, Kirby alone was paid almost $800,000.00 in dividends, which brings the total amount of cash he's sucked out of GW this year alone well over a million dollars and closer to two.

    This is going on while GW's sales are decreasing, its profit margin is struggling to remain stable, and when it has little more than 17 million dollars in cash.

    GW's response to falling sales was to jack up the price of it's products and cheerfully suggest to shareholders that this was because, "We know that, for a niche like ours, people who are interested in collecting fantasy miniatures will choose the best quality and be prepared to pay what they are worth." (CEO's Comments, 2009-2010 Financial report, pg 3, emphasis added) In other words, GW is trying to keep itself afloat by bleeding its customers. And let's face it, part of that blood-letting is paying Tom Kirby's outlandishly fat salary. Oh and by the way, Kirby's salary went up in spite of the fact that, "We set ourselves the objective to pay off our borrowings this year and we asked staff to accept a salary freeze to allow us to do that." (CEO's Comments, 2009-2010 Financial report, pg 4, emphasis added)

    Now, Mr. Kirby's salary went up this year due to his "extra" responsibilities in coming to America to develop the market here. I should add here that this invariably involved paying to relocate him as he's in the states 40 weeks out of the year. Plus, he's being paid in pounds but spending in dollars, giving him the best of both worlds from his fat stacks of cash.

    Considering this, let's not forget the ongoing GW v Chapterhouse litigation. Apparently, one of Mr. Kirby's extra responsibilities here in America has been to hire an awesomely expensive law firm to attack a small American business that is ostensibly adding value to the company's own products. We can forget, for the moment, the fact that GW's complaint (parts of it likely drafted by Kirby considering the descriptions of GW fluff) is full of boundless accusations that barely meet the prima facie requirement. We can also forget that the complaint is an intimidation tactic designed to frighten Chapterhouse into going under and terrify the rest of the legitimate small model company market (It was filed on December 21st with an 20 day period to respond even though the attorneys were unavailable until the end of this week).

    Forgetting that, we can focus on the fact that this suit is the second pillar of GW's business strategy next to raising prices! "Our continual investment in product quality, using our defendable intellectual property, provides us with a considerable barrier to entry for potential competitors: it is our Fortress Wall." (CEO's Comments, 2009-2010 Financial report, pg 3) That's code for, we're increasing prices to account for fewer sales and we're suing the crap out of anybody that could conceivably compete with us in order to make our IP seem fictitiously invincible, so don't worry investors.

    What does all of this boil down to? Games Workshop is attacking its customers and we are paying for them to do it. GW's business model assumes that its remaining loyal customers will happily pay artificially inflated prices and they are using that money to pay ridiculous management salaries and fund overly expensive lawsuits that attack the very community that they are depending on to accept price increase after price increase.

    This not a healthy business model and I, for one, don't appreciate being squeezed by some British company in order to pay a corporate manager's fat salary and terrorize the hobby community. GW's customers need to send a message to GW that this behavior is not acceptable.
    An excellent post! Very informative. TBH my walking away from GW was all about price (as I stated above) but after reading that I think I may well stay away on moral grounds.

    Further to my own post lets take my club as another example. The club I belong to has 15-20 members and all own WFB armies, some people own several as you'd expect. How many bought an 8th edition rule book?
    ONE, yes thats right, out of all those people only one of us bought the book. The club runs a league every year and last years used 7th and as the situation has not changed I reckon this years will too.

    On a site like this which is largely about GW games I expect the vast majority bought into 8th but how many clubs up and down the country (Wargames Clubs who's primary focus is NOT GW) felt the same way?
    General Wargamers must surely make up a sizable proportion of sales in the UK and yet I feel GW has alienated them. Many Wargamers I know (not just from my club) are increasingly turned off by GW's attitude in general toward "The Hobby". We do not like being dictated to, whether through price or what models can or cannot be used and the rash of legal action over the last year is viewed with disdain.

    No one company rules this hobby or is bigger then the hobby and GW are not the hobby however much they like to think they are.
    To a New Yorker like you a hero is some kinda weird sandwich, not some nut who takes on three Tigers!

 

 
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