Looking for understanding into GW corporate?

[Duke]

Read it here

Follow the link in my sig.

Duke

[DarkLink]

Well... that's interesting.

Sounds to me like they're trying to maintain their image as a minis company with the whole manufacturing thing, while quietly expanding their business to where they can take advantage of the money involved in retail as well. That would also be consistent with their IP protection policies. They want any and all 40k/fantasy business to be done through them and them alone, it seems.

[Farseer Uthiliesh]

I give up trying to understand GW. I love the hobby, but the company leaves me scratching my head.

[somerandomdude]

"Shareholders who look for a predictable dividend on their shares might want to look elsewhere."

Best line of the wall o' text.

Great post Duke. I'm nowhere near your level of business knowledge (I've just recently begun business education for my international studies degree) but I still had a lot of fun reading this.

However, I don't think his comment about the new hobby centers had anything to do with his previous comment about being unaffected by economic factors. As someone who recently spent a few years in retail management (I know, GW isn't a retailer... ) predicting the performance of a new store is not an easy task and certainly not concrete evidence of performance, so any results from a first year store should not be considered when talking about the company as a whole.

I think they're holding onto the fact that the webstore has grown as an indication that they are not being affected. That, and they most likely cut costs considerably elsewhere (you mentioned the frozen salaries), so telling their shareholders that they're fine isn't a bold-faced lie, it's just telling them the truth in a much nicer way.

That's most likely the reason they said they were a manufacturer, and not a retailer. No shareholder wants to hear retail. The further along the retail track (manufacturing, retail, end consumer) you get, you become more affected by economic woes.

Of course, when you put everything together (as shareholders should, and CEOs don't) it makes very little sense and you get a good laugh out of it. Unless you are an investor.

[eldargal]

Bear in mind these financial statemens are intended for stockholders not the hobbyists, apart from the facts and figures its mostly corporate spin so it will always sound rather silly to our ears. Atleast they aren't talking about how to synergise their dynamics.

[Mauglum.]

Hi all.
GW corperate are realy easy to understand.
They pick what ever action is easiest to explain to the share holders, (no matter how counterproductive.)

And then blame anything/anyone they can if thier actions result in less than favourable results.

Untill they run out of scape goats then admit they were '...fat and lazy...'

Then after a bit of good fortune , (licence revenues-currency fluctuations ) give them better results they continue to be lazy...

Duke would you say relying on price increases to compensate for falling sales volumes is a sound long term buisness practice?

I think its run its course at GW , and the NEED to adress the real problems now.

TTFN

[MaltonNecromancer]

I don't think there's anything in that document to actually be surprised about. GW's strategy is simple - vertically integrate everything so the only place anyone can go to for GW products is GW. That's how it's been for twenty years, and it's just not going to change.

However, it's not going to bring in massive profits. What it'll do is bring in smaller levels of profit more reliably, which isn't going to pay out whopping dividends. The document seems to me to be an attempt to obfuscate this fact from potential investors, hence the incongruities and inconsistencies.

Basically it's business as usual, no boat rocking in sight. They've made losses, but they're a business selling a luxury product, and luxuries are always the first thing to go in a recession; we're in a recession, and their profits have dropped. That doesn't mean they're going to change their business practices though, because the people in charge are fundamentally conservative business people. They don't look at risk and see what they have to gain - they look and see what they stand to lose. So they're going to keep their heads down and not branch out.

Doesn't seem like a bad strategy; doesn't seem like a great one. This document is just fiscal mummery designed to hide the shortcomings of a lack of new business ideas.

As I see it for us, the bottom line is: no fall in product price. Ever. With moaning about it being as effective as trying to paint a ratling sniper with an enraged gibbon's private parts.

[eldargal]

Well, apart from the fact there is no evidence sales volume is down (GW don't release sales data, and when you take into account increases in commodities prices, inflation and tax rises the price increases don't point to a decreasing sales volume at all*) I agree with you. These statements are for stockholders who see GW purely as a corporate entity, they know little about what GW does and don't care to learn more.


*We have some anecdotal evidence from people claiming their local sales rep have said sales volume is down. Well I've got anecdotal evidence from three store managers which says at the very least UK sales volume has been increasing slowly but steadily. I'm not claiming this is fact, the point is all we have is anecdotal evidence.

[Farseer Uthiliesh]

Untill they run out of scape goats then admit they were '...fat and lazy...'

You mean, 'escape goats'

[Duke]

...However, I don't think his comment about the new hobby centers had anything to do with his previous comment about being unaffected by economic factors. As someone who recently spent a few years in retail management (I know, GW isn't a retailer... ) predicting the performance of a new store is not an easy task and certainly not concrete evidence of performance, so any results from a first year store should not be considered when talking about the company as a whole.

I think they're holding onto the fact that the webstore has grown as an indication that they are not being affected. That, and they most likely cut costs considerably elsewhere (you mentioned the frozen salaries), so telling their shareholders that they're fine isn't a bold-faced lie, it's just telling them the truth in a much nicer way.

That's most likely the reason they said they were a manufacturer, and not a retailer. No shareholder wants to hear retail. The further along the retail track (manufacturing, retail, end consumer) you get, you become more affected by economic woes.

Of course, when you put everything together (as shareholders should, and CEOs don't) it makes very little sense and you get a good laugh out of it. Unless you are an investor.

Exactly, Why go on about your web store and your brick and mortar locations when you NOT A RETAIL SHOP? Well, because your right... In a recession they magically aren't retail any longer. Truth be told, they are really a hybrid retail/manufacturing shop. I look forward to July when they release this years statement and all the sudden pat themselves on the back for participating in the economic upturn.

Bear in mind these financial statemens are intended for stockholders not the hobbyists, apart from the facts and figures its mostly corporate spin so it will always sound rather silly to our ears. Atleast they aren't talking about how to synergise their dynamics.

Perfect, QFT! If you really look at the numbers their top line revenue wasn't up much at all (126,511 2010vs 125,706 2009) Also, from what I can tell the are company prepared numbers, which means an accountant hasn't verified any of this information... But I could have missed it (Still looking). Lol "Synergise their dynamics"

...Duke would you say relying on price increases to compensate for falling sales volumes is a sound long term buisness practice?...

I know I don't have to say this, and you surely don't need an MBA to figure this out, but no it is not a viable business practice. The only time this would work is if your product is perfectly ineslastic, meaning as price rises demand remains the same. From our own experiences we know that we will pay through the nose for plastic crack (Blood knights?) but there is a limit.

Anyway...It seems there is more demand for this on my blog, so Ill do a numbers analysis this weekend. Keep your eyes out (Or just simply follow the blog wink wink)

Duke