A new strategy to replace B&M

[EmperorNorton]

No. I'm a realist. No large company, with management, stock holders, etc. is capable of spending more money on running its stores than what it earns in a year without a huge scandal. It just doesn't happen. The accountant would bring it up, and Wells would be publicly executed for pissing away the companies money.

Can you not imagine the board room conversation?

What did we earn this year? £38 mil. And we spent? £42 mil. You're fired.



Having gone and looked at the report, 49% of their sales were through their stores in 09. That seems pretty substantial. As for the numbers, I can't see the ones you've quoted Norton, so Ive asked a financial accountant to look them over. I'll get back with what he says when it comes in.

Not only can I imagine that conversation, I would expect it.
And I'd find it highly interesting to hear what a professional financial accountant has to say about them.

Possible errors I see with my argument so far is that 50% of the stores don't necessarily account for 50% of the costs (which has been pointed out) and that there could be some confusion over the number of stores in their "Northern Europe" region (which IIRC they define anew pretty much every year).

[iamfanboy]

No. I'm a realist. No large company, with management, stock holders, etc. is capable of spending more money on running its stores than what it earns in a year without a huge scandal. It just doesn't happen. The accountant would bring it up, and Wells would be publicly executed for pissing away the companies money.

Can you not imagine the board room conversation?

What did we earn this year? £38 mil. And we spent? £42 mil. You're fired.



Having gone and looked at the report, 49% of their sales were through their stores in 09. That seems pretty substantial. As for the numbers, I can't see the ones you've quoted Norton, so Ive asked a financial accountant to look them over. I'll get back with what he says when it comes in.

Go to page 24.

Cost of sales is their expenses running the manufacturing/shipping/management company of the arm, including Mark's modest salary - this is money they spend regardless of who sells their end product. Operating expenses is their cost in running the store segment of their business. Numbers in (parentheses) are expenses, btw.

Their income that year, as you can see from that chart, is 125,706 pounds. 49% of that is 62m. Their store chain cost them 84m to run, leaving their stores in a deficit of 24m.

There's a reason they don't print out that pie chart any more in their last two reports. It makes it a little too easy to weasel these numbers out.

There is something seriously rotten at the core of GW's management. The yes-man culture described by blongbling, yabbadabba, and others shows that the conversation wouldn't take place in the context you described, because it wouldn't be an UNDERLING doing wrong; it would be the guy driving GW's policy, and in a yes-man culture the guy you're saying yes to CAN'T be wrong.

EVER.

Because if he is and you tell him, you're the one who gets fired.

So we get debacles like Finecast, the retail store dragging them under, and who knows what else.

[Trasvi]

there could be some confusion over the number of stores in their "Northern Europe" region (which IIRC they define anew pretty much every year).

I think this 'Northern Europe' thing is a classic example of obfuscation. I've found it quite funny to see which regions/business sectors constitute 'Northern Europe' and 'Other', and how it manages to magically make both appear in the black.

I thought it was also interesting in their last financials which said 'We've managed to increase registration for our internet store by 150000' whilst later saying that that they haven't seen increased purchases through the webstore...

[Omniassiah]

Advertisement never brings in money directly, it only costs. It still helps drive sales up. Is it so hard to believe that people learn about GW's existance from a store and then go buy their stuff on web? In which case the store still helped increase sales.

As Travsi stated the cost of advertising needs to be less then what you are going to make from it. GW isn't succeeding in that point, they aren't bringing in and more importantly keeping the quantities of players they need with the store model. The best way to recruit and more importantly keep that new recruit in the game is to get people playing the game in the store. from the few UK GWs iI've been in and the descriptions of them I've heard here they just don't have the space to provide that. Should GW ditch their stores, not really. Should they go with the Battlebunker/mini-WHW model, with the US almost certainly, the UK maybe. With the UK I would suggest ditching the "high street" store mentality and move to larger spaces available in secondary retail locations.

My FLGS is a prime example of why you do this. The larger malls cost about 4xs as much per square foot but you won't see 4x times as much sales from being there, so instead he is in a cheaper strip mall, that is readily assessable and has a rent that is easily maintained. Sure he doesn't grab a lot of foot traffic from that he might if he was in the larger mall, but he has the space to have several full games going on at once. Very few people who get recruited in that store don't end up buying a full army plus extra options.

[Bloodknight]

We've managed to increase registration for our internet store by 150000

Meaning squat all because you have to be registered to get to the hobby stuff.

[BigbyWolf]

I'm surprised- I had no idea that B&M sold GW products. I'll have to swing by the local one and check it out.

[Baragash]

No. I'm a realist. No large company, with management, stock holders, etc. is capable of spending more money on running its stores than what it earns in a year without a huge scandal. It just doesn't happen. The accountant would bring it up, and Wells would be publicly executed for pissing away the companies money.

When the main shareholders are a small group of individuals you might expect that to happen. When they're faceless funds (or part of current management) and the bottom line is better profit % and increasing dividends, and the shares are relatively unimportant in the grand scheme of your overall fund, probably a skim read of the summary seeing lots of positives metrics is all the attention it's going to get.

And I'd find it highly interesting to hear what a professional financial accountant has to say about them.

This UK retail management accountant agrees I also agree with creating a smaller number of "destination gaming hubs" similar to WHW or Eye of the Storm (that's what Maelstrom's is called I think?). They'd also need to develop a relationship and programmes with indie stores to make sure that face to face intros and marketing that their stores do are supported and support indies in being professional retail outlets (in my experience a lot of indies are not that well run).

[xxRavenxx]

Go to page 24.

Cost of sales is their expenses running the manufacturing/shipping/management company of the arm, including Mark's modest salary - this is money they spend regardless of who sells their end product. Operating expenses is their cost in running the store segment of their business. Numbers in (parentheses) are expenses, btw.

I see the number, but I see no evidence that that number is purely operational costs of stores. What exactly stops that number including the salaries of everyone in the entire company, of shipping, and so on?

[lanrak]

As I posted higher up in the thread.
GW plc has a gross margin of 76%.
That means ONLY 24% of retail price covers ALL overheads apart from logistic and retail costs!

[iamfanboy]

As I posted higher up in the thread.
GW plc has a gross margin of 76%.
That means ONLY 24% of retail price covers ALL overheads apart from logistic and retail costs!

...Which fits in nicely with the numbers of their cost of sales to operating expenses.

Personally, Raven, I'm dead certain that GW has directly stated that's what those two numbers mean. I know I read it in ONE of the financial reports at least, but the thing is when I read it I was reading their financial reports from like 1997 to 2010, and now I can't pin down which one I read it in.

And Baragash is absolutely correct about the current situation with the stockholders. GW stock is owned primarily by one of two groups of people:

1) GW management

2) Big-time investors who have a bit of GW stock just to diversify their portfolios, feel good about supporting British industry, have a bit of a tax writeoff, and/or relive a bit of their childhood.

Neither are prone to questioning GW management decisions, mostly because GW is peanuts for the big-time investors and the management is already drinking the koolaid.

[xxRavenxx]

And I'd find it highly interesting to hear what a professional financial accountant has to say about them.

Ok, so I have his reply now, its dead exciting (Honest ):

"Earned 5.9 million and spent 2.2 million in the UK"


*shrug* make of it what you will. There's a reason he does my accounts, which is he understands the numbers in full and I don't

[shelfunit.]

Ok, so I have his reply now, its dead exciting (Honest ):

"Earned 5.9 million and spent 2.2 million in the UK"


*shrug* make of it what you will. There's a reason he does my accounts, which is he understands the numbers in full and I don't

I'd get a new accountant Raven. There are approximately 130 GWs in the UK. Think about it. Rent on 130 locations (many in London) and probably in excess of 200 staff. The expenditure on the staff alone at minimum wage would be in excess of £2.3M, and as many here have claimed managers are paid a lot more than that. Add in probably double that again for rent and you will have a more realistic figure. Add in pension contributions, annual leave, sick benifits, utilities and insurance and it mounts up even higher

[xxRavenxx]

I can't comment except that I know he's an entirely good accountant (and my father :P),

I thought the numbers seemed small too to be honest, but didn't question it. Possibly he meant 59 and 22? As I mentioned, I don't have a clue.

[shelfunit.]

I can't comment except that I know he's an entirely good accountant (and my father :P),

I thought the numbers seemed small too to be honest, but didn't question it. Possibly he meant 59 and 22? As I mentioned, I don't have a clue.

Always good to have an accountant in the family. Sadly the 59/22 doesn't work either as it is known from the latest results only 30% of GW income comes from the UK and that includes indie sales and web bussiness in that. 30% is roughly £40M and going by what Iamfanboy said about the last breakdown of sales between GW and indies several years ago it was roughly 50/50 then and heading rapidly in favour of indies. That would mean that a maximum of £20M was generated between GW shops and internet business's (sp?) at that time, and by now that figure would (following the trend shown prior to the concealment of these numbers) would be far lower.

[iamfanboy]

Ok, so I have his reply now, its dead exciting (Honest ):

"Earned 5.9 million and spent 2.2 million in the UK"


*shrug* make of it what you will. There's a reason he does my accounts, which is he understands the numbers in full and I don't

Even though you're obviously not new to the idea of internet arguing, let me give you a protip:

The argument from authority fallacy works a little better when the authority in question bothers reading the document instead of just spouting numbers.

Considering that in the document in question there's a specific line item that says "Income from Customers" under the header "UK" that states 33m, I somehow wonder what your father was reading, if anything at all.

As elsewhere pointed out, 2.2m wouldn't even cover the minimum wages of their redshirts.

Just... no, sorry. Not going to fly.

[Inquisitor Kallus]

why dont you post it on their facebook or something? You could even send a nice letter to Mark..

[xxRavenxx]

Even though you're obviously not new to the idea of internet arguing, let me give you a protip:

The argument from authority fallacy works a little better when the authority in question bothers reading the document instead of just spouting numbers.

Pro tip: If you want the person you're arguing with to actually care about your opinion, the tiniest bit, you don't sit and try to tell them their family are clueless. *shrug*

Frankly, I'm at the point where this tipped past being a discussion, and into, as you say, an argument. Clearly you get off on the confrontation, and calling names. I don't. And I've lost interest in this topic entirely. I'm out.

[Max Jet]

Pro tip: If you want the person you're arguing with to actually care about your opinion, the tiniest bit, you don't sit and try to tell them their family are clueless. *shrug*

Frankly, I'm at the point where this tipped past being a discussion, and into, as you say, an argument. Clearly you get off on the confrontation, and calling names. I don't. And I've lost interest in this topic entirely. I'm out.

Well you put the target out quite openly as I do not understand why you brought your family into this discussion in the first place. And he is actually right, no need to feel miffed.

[iamfanboy]

Pro tip: If you want the person you're arguing with to actually care about your opinion, the tiniest bit, you don't sit and try to tell them their family are clueless. *shrug*

Frankly, I'm at the point where this tipped past being a discussion, and into, as you say, an argument. Clearly you get off on the confrontation, and calling names. I don't. And I've lost interest in this topic entirely. I'm out.

Should I be so impossibly amused by how you're pretending to be attacked to avoid the way that four people have pointed out the numbers your father pointed out would be impossible for an actual accountant to reach?

It reminds me of the "Wounded gazelle" technique out of a manga: "In a girl fight, she who cries first wins."

Except that this is the internet, and we aren't in a girl fight or comparing opinions, we're comparing facts. If you don't like those facts, that's all fine and good; but you shouldn't act the victim in an attempt to win an argument that you've lost.



As far as the topic goes...

Of course GW knows that their stores are their main problem; why else push the one-man stores so hard recently? They've also been moving away from high-rent locations, closing underperforming stores, and working decently well with trade accounts.

But is it enough?

[Orrinocco]

I don't know why you're comparing GW to MtG. MtG is a pocket money line.

I just wanted to highlight this. One thing that bugs me is that GW doesn't have a pocket money level.
My brother was looking to get a birthday present for me from my niece. Just a small thing costing maybe £5 at most. There is not one thing (other than paints, and what sort of present is paint?) that GW sells in that sort of range any more.

If they did have blisters at pocket money prices, then maybe they could start selling them in the toy sections of supermarkets etc without taking up huge space? It is GWs policy to pack things in big boxes that takes up space