Apparently the sun is rising on our favourite wargame empire.Last Friday the Times ran an article in their business section about GW:
http://business.timesonline.co.uk/tol/business/markets/article6978494.ece
(scroll down page)
The article reported that GW's stockbreaker, KBC Peel Hunt, have announced that pretax profits for 2009/10 are likely to be £14m rather than the previously estimated £9m - prompting a 30% jump in share price.
The interesting thing is the Times analysis of how this impressive profit has been achieved. Sales are not up, if anything revenue is somewhat down. The profits have been generated by cost cutting. The Times mentions two examples: smaller one man stores and more efficient plastic model production.
There have been other cost cutting measures that I can think of. For example the sale of Soaris and the concomitant cut in staff costs. There were also redundancies in 2008.
The smaller shop model confuses me. I can see how additional small stores exploiting the primary 'hobby centres' could work but surely this strategy could not be pursued very far without a major change in the business model of children's hobby centres?
That's interesting. When I first heard about one man stores I thought it was a mad idea... clearly I was wrong.
ReplyDeleteDear Lee
ReplyDeleteYes, the one man store is a break with a business model that goes back, what, at least a decade, maybe two.
I suspect that they are trying it out as part of their cost-cutting exercise. Staff must be their primary expense.
I know the staff are under tremendous pressure from upper management to sell. That also changes the business model.
John
Hi...
ReplyDeleteI like to play the games on my pc my console and on my cell phone..
this article was related to games & also related to technology and i had also hobby to search gadget and latest gadgets and many more so this article was really great in my opinion.
I am aware of a one-man-store in Stratford-on-Avon, The plan (from what I have picked up) is that these one man stores are like apprenticeship, where Games Workshop employees can get a chance at running a smaller (cost effective) store and then if this is feasible, a larger store or extra staff can be employed later.
ReplyDeleteI have also heard that GW are expanding because (and this is GW speak).
"As the recession hits and people (gamers) are finding it depressing to make ends meet - these same gamers are seeing GW miniatures and games as an escape, a treat, something to be enjoyed and without feeling guilty - feel that they are treating themselves!"
I find the idea of a one-man store very strange - what happens when he has to take a 'natural break?' Or illness or training days?
Still GW success, should mean more gamers - shouldn't it?
Many years ago (25 plus) I was involved with a major entertainments group and on one of their seminars, we were asked about 'the way forward', I proposed that GW shares would be worth investing in and (surprise, surprise) was shouted down as insane. If I had bought 1000 shares 25 - 30 years ago, I believe that I would be a millionaire today!
If only I'd been more forceful and/or had some spare cash!
Tony
http://dampfpanzerwagon.blogspot.com/
Dear Tony
ReplyDeleteI know. I first started writing for white dwarf in the 70s. Why didn't I buy shares?
Answer: No money