A new strategy to replace B&M

[Art Is Resistance]

you have to remember what the stores are there for - they're not for the likes of you or me (as in gamers who have been playing a while, have armies and want to add to / buy new ones), they're there to push the Intro boxes, pure and simple. The stores are KPI'd based on how many 'sign ups' they manage (sales of intro boxes), how many beginner paint sets are sold - not on how many blisters are sold.

That single, salient fact tells you more than any P&L - the stores are the 'gateway' to the 'GW Hobby' - in fact, GW would rather not refer to them as 'stores', but 'hobby centres' or 'outlets'. Don't forget, in just about every preamble he writes, TK insists that GW are 'a manufacturer NOT a retailer'.

GW won't be doing away with B&M any time soon - it's just too important to their (flawed) business strategy.

[Max Jet]

you have to remember what the stores are there for - they're not for the likes of you or me (as in gamers who have been playing a while, have armies and want to add to / buy new ones), they're there to push the Intro boxes, pure and simple. The stores are KPI'd based on how many 'sign ups' they manage (sales of intro boxes), how many beginner paint sets are sold - not on how many blisters are sold.

That single, salient fact tells you more than any P&L - the stores are the 'gateway' to the 'GW Hobby' - in fact, GW would rather not refer to them as 'stores', but 'hobby centres' or 'outlets'. Don't forget, in just about every preamble he writes, TK insists that GW are 'a manufacturer NOT a retailer'.

GW won't be doing away with B&M any time soon - it's just too important to their (flawed) business strategy.

Last numbers would indicate a loss if not for the last price rise. Surely there hase to be a more efficient way of money / new costumer ratio than their current strategy don't you think?

[Tayrod]

Actually, I think we understand it all too well...

Improved customer relation is an oxymoron as Games Workshop has no interest whatsoever in retaining customers. Instead, they rely on churn’n’burn and kids with wealthy parents.

Why does everyone keep uttering this point as if it was canon passed down by god? It's incredibly silly assuming that "Games Workshop has no interest in retaining customers". Ofcourse they do (though it might not be their main focus)

[iamfanboy]

GW don't really need their B&M stores at all, really. The hobby has always been based on word of mouth for attracting new players and I don't see that changing if they took away their stores.

This.

THIS THIS THIS.

THIS THIS THIS THIS

GW pretends to rely on their stores as their 'recruitment tool' when really, their recruitment tool is other players.

I am really starting to despise it when a UK player quotes GW's party line. It's a parochial, egocentric, foolish attitude and the only (only!) reason it works in the UK is because GW spent five years systematically destroying UK indie stores and replacing them with their own locked-in stores.

Even in the UK, word of mouth is more powerful than walk in recruitment; how many players do YOU know, Ehlejin, that started the game because of friends?

Now GW's trapped in an untenable business model. They can't start closing down stores left and right in the UK, because they have a quasi-religious belief in the effectiveness of stores as recruitment (probably because when they do surveys to see how people are recruited, they only do it from their own stores, biasing the results!), but they HAVE to reduce their reliance on B&M, distancing themselves from the perils of retail before the stores drag them under.

Frankly, the only reason that the stores are even allowed to exist in the UK is because of support from indie stores in other countries. It's a colonial business model, and dammit, they should really should remember what happened to the East India Tea Company.


Even in jolly olde Englande, indie stores have experienced a resurgence; remember that counting I did in my earlier post? indie stores that have OBVIOUS gaming names (like Dark Sphere, Steel Crown, Aurora Gaming, etc) outnumber official GW stores within 100 miles of London two to one. That is very specifically excluding names like Toy Town, Dixon's, Hobbycraft, ect) because the places with obvious gaming names are far more likely to have gaming SPACE.

[McBoner]

This.

THIS THIS THIS.

THIS THIS THIS THIS

GW pretends to rely on their stores as their 'recruitment tool' when really, their recruitment tool is other players.

I am really starting to despise it when a UK player quotes GW's party line. It's a parochial, egocentric, foolish attitude and the only (only!) reason it works in the UK is because GW spent five years systematically destroying UK indie stores and replacing them with their own locked-in stores.

I'm really starting to despise it when a non-UK player quotes how B&M GW stores are useless, can never possibly work and should all be closed down. Just because you don't feel the GW retail model is applicable to your area doesn't mean its not applicable somewhere else in the world. It's an egocentric and foolish attitude.

Even in the UK, word of mouth is more powerful than walk in recruitment; how many players do YOU know, Ehlejin, that started the game because of friends?

Perhaps you're right that word of mouth is a more powerful tool in the UK (I myself am dubious, personally) but unless you've experienced UK retail and how GW operates here, I would hold-back from extrapolating the experiences you've had from your own area to the situation on foreign shores. Otherwise you fall victim to doing exactly what your post derides GW for doing - taking the retail/gaming model from one country and copy and pasting it to another. The majority of new recruits are little kids and when I was a little kid, and when all my friends were little kids, the thing that got us all in to the hobby was walking past a GW store in a town's main shopping high street, seeing all the colourful looking "toys" within and begging our parents to take us in. As I've got older and older, I visit GW stores less and less and have played my role in recruiting people by word of mouth. But just because a GW store is not a useful resource for me anymore, doesn't automatically mean that's also the case for everyone else. TBH, I still get enjoyment from being in a new town and checking out the local GW to see the models they have painted up on display. Why should GW just focus on one type of recruitment model anyway? Perhaps word of mouth does account for 70-80% of new people into the hobby, the 30% recruited through walk-ins at stores still make up a significant part of GW's player base.

Even in jolly olde Englande, indie stores have experienced a resurgence; remember that counting I did in my earlier post? indie stores that have OBVIOUS gaming names (like Dark Sphere, Steel Crown, Aurora Gaming, etc) outnumber official GW stores within 100 miles of London two to one. That is very specifically excluding names like Toy Town, Dixon's, Hobbycraft, ect) because the places with obvious gaming names are far more likely to have gaming SPACE.

Having llived in London for a considerable amount of time I can tell you that most of those "indie stores" are either model/toy shops with a pitiful display of GW product to supplement their income or actually don't exist as retail premises at all and are just some guy selling GW out of his bedroom to his gaming group. Dark Sphere is likely the biggest indie in and around London and even that is pitifully small - you can't get more than about 3 people in the shop at a time, there are no painted models on display, all product is crammed unglamorously onto the little shelving they have and there is no gaming/painting space in the store itself. For better or for worse, designated gaming stores are incredibly rare in the UK and the few that do exist, with the exception of places like Maelstrom Games, are by no means social gaming utopias where people come from miles around to hang out, chat, paint and play. It is still the case that the only stores that can supply an experience like that at the moment is GW; the Oxford Street flagship GW is still my favourite store to visit when I'm around that area.

Perhaps you and all your friends began the hobby without any influence from a GW store at all. Congratulations. Don't automatically assume that your situation is applicable to everyone else in the world though.

Unfortunately, the UK needs GW stores. If GW closed down all of its UK based stores, that would be the end of GW's presence in the UK. Don't assume that for every GW store that closed down, an indie would open up in its place, because it wouldn't. The retail environment in the UK is completely different to that of the US; rents, fees and bills are way too high and footfall in all but the major cities is far too low to make indie stores focusing on gaming profitable in the majority of cases. The psychology of UK consumers is different too. We here in the UK are far less mobile than our american counterparts. The cost of transport/running a car is excessive, we expect everything on our doorstep and we are far less willing to travel for a decent shopping experience; its why all our shopping high streets and malls are all completely the same, with the exact same chains and brands, regardless of the town you're in. People just wouldn't travel to the local GW three towns over like they would in the US.

[shelfunit.]

I'm really starting to despise it when a non-UK player quotes how B&M GW stores are useless, can never possibly work and should all be closed down. Just because you don't feel the GW retail model is applicable to your area doesn't mean its not applicable somewhere else in the world. It's an egocentric and foolish attitude.

Quite possibly, but he's not wrong. GW shops in the UK have served their purpose very well - now however they are a huge drain on resources and need to be scaled back - not removed entirely, but heavily culled to only those in key locations which can provide a "complete" GW gaming experience. The only egocentric and foolish attitude has been displayed by GW in not realising this.

Dark Sphere is likely the biggest indie in and around London and even that is pitifully small - you can't get more than about 3 people in the shop at a time, there are no painted models on display, all product is crammed unglamorously onto the little shelving they have and there is no gaming/painting space in the store itself. For better or for worse, designated gaming stores are incredibly rare in the UK and the few that do exist, with the exception of places like Maelstrom Games, are by no means social gaming utopias where people come from miles around to hang out, chat, paint and play. It is still the case that the only stores that can supply an experience like that at the moment is GW; the Oxford Street flagship GW is still my favourite store to visit when I'm around that area.

You apparently haven't been to DarkSphere in the last year or two - they have moved locations to a larger unit a few doors down the road and a quick look on their website shows several tables availible.

Perhaps you and all your friends began the hobby without any influence from a GW store at all. Congratulations. Don't automatically assume that your situation is applicable to everyone else in the world though.

He's not - 2/3 of GW's income comes from areas of the world with very little GW shop presence, therefore the majority of their customers are unlikely to have visited a GW shop at all either.

[EmperorNorton]

Unfortunately, the UK needs GW stores. If GW closed down all of its UK based stores, that would be the end of GW's presence in the UK. Don't assume that for every GW store that closed down, an indie would open up in its place, because it wouldn't. The retail environment in the UK is completely different to that of the US; rents, fees and bills are way too high and footfall in all but the major cities is far too low to make indie stores focusing on gaming profitable in the majority of cases. The psychology of UK consumers is different too. We here in the UK are far less mobile than our american counterparts. The cost of transport/running a car is excessive, we expect everything on our doorstep and we are far less willing to travel for a decent shopping experience; its why all our shopping high streets and malls are all completely the same, with the exact same chains and brands, regardless of the town you're in. People just wouldn't travel to the local GW three towns over like they would in the US.

In other words: Customers around the world should subsidize unprofitable GW stores for the convenience of the UK players and stop moaning about it.
Swell.

[McBoner]

Quite possibly, but he's not wrong. GW shops in the UK have served their purpose very well - now however they are a huge drain on resources and need to be scaled back - not removed entirely, but heavily culled to only those in key locations which can provide a "complete" GW gaming experience. The only egocentric and foolish attitude has been displayed by GW in not realising this.



You apparently haven't been to DarkSphere in the last year or two - they have moved locations to a larger unit a few doors down the road and a quick look on their website shows several tables availible.

I was there yesterday, actually. Their store is tiny. I was also fortunate to visit their "old" premises too. You're right, the new one is bigger, but only in that you can actually physically get to products on the shelf now. As for their gaming tables, they are located in a seperate premise that only opens for organised events. You cannot go to Dark Sphere for a pick up game. Just to make it clear, I love Dark Sphere, its where I get all my gaming stuff from. But a large, social gaming centre, it ain't.

He's not - 2/3 of GW's income comes from areas of the world with very little GW shop presence, therefore the majority of their customers are unlikely to have visited a GW shop at all either.

The point was that iamfanboy was using his experiences as a (I expect) US consumer to suggest that GW's retail strategy in the UK should be heavily modified. I hear a lot of people complaining that GW isn't as successful overseas because it tries to adapt a UK retail strategy to foreign territories. Iamfanboy is doing the exact same thing. GW's retail strategy is not working in the US, so it must automatically not be working in the UK either. I argue that he is wrong.

Retail is doing terribly in the UK in the moment, with stores closing left, right and centre. GW on the other hand, seems to be one of the only retail chains that is still opening new stores. Either they're totally deluded or the UK retail chain isn't as useless and cost-ineffective as people imagine. I know people here like to think the former is more likely, but GW's history as arguably the only company to successfully bring wargaming into the mainstream, the fact that they are one of the only retail chains in the UK to still be making a profit in the current economic climate and the accumulated retail experience of those in charge suggests that the latter is more likely to be true.

[McBoner]

In other words: Customers around the world should subsidize unprofitable GW stores for the convenience of the UK players and stop moaning about it.
Swell.

Or to put it another way, all UK GW stores should close down because GW's retail stores have not been so successful elsewhere. Swell.

At the end of the day, I wonder just how "unprofitable" UK GW stores are. They make up a huge part of GW's expenses, sure. But I wonder how great the impact would be on turnover in the long-run if they all shut down.

Talk of revolutionising GW's retail arm are un-realistic. The costs of converting their current retail model into the large, gaming-focused battle bunkers that people on here like to fantasise about and the change in infrastructure that this would entail makes it impossible. Changes like that don't come for free and GW just isn't large enough to remodel in such a dramatic way.

[Cambion Daystar]

Or to put it another way, all UK GW stores should close down because GW's retail stores have not been so successful elsewhere. Swell.

At the end of the day, I wonder just how "unprofitable" UK GW stores are. They make up a huge part of GW's expenses, sure. But I wonder how great the impact would be on turnover in the long-run if they all shut down.

Well if the figures posted in this thread are correct, it cost more to run them that gw has profits in the uk. So i'd say they would be better off just closing them

[EmperorNorton]

Or to put it another way, all UK GW stores should close down because GW's retail stores have not been so successful elsewhere. Swell.

At the end of the day, I wonder just how "unprofitable" UK GW stores are. They make up a huge part of GW's expenses, sure. But I wonder how great the impact would be on turnover in the long-run if they all shut down.

You said yourself that indy stores would not be profitable in many locations GW stores are in. How do you expect these GW stores to be profitable despite being a lot more restricted in their business model?

[McBoner]

You said yourself that indy stores would not be profitable in many locations GW stores are in. How do you expect these GW stores to be profitable despite being a lot more restricted in their business model?

For a start, the profit margin is larger on an item sold in a GW store because they are both the retailer and the manufacturer. The trade price for UK indies is 35-40% from retail price. The costs of manufacture are obviously far lower than that, so the profit for every pound spent in a GW is higher than for every pound spent in an indie.

More importantly however, if an indie gets you into GW for example, and then you go on to purchase your GW from an online retailer, the indie who got you into the game sees no finanical benefit. If on the other hand, a GW store gets you into Warhammer, then you go on to make all your purchases through Maelstrom Games, the ultimate winner is still GW. I would argue that the small town GW's are actually the most valuable to GW, despite the fact that individually, they don't turnover much money on their own. When I was a kid in a boring, small town, my friends and I were all recruited to the hobby through the small GW store located there. 15 years later and I and most of my friends are still playing and paying for GW product. Yeah, none of us shop in that original small-town GW anymore, but every purchase we make at Dark Sphere/Wayland/Whatever still ultimately fills GW's coffers.

[ehlijen]

Even in the UK, word of mouth is more powerful than walk in recruitment; how many players do YOU know, Ehlejin, that started the game because of friends?

I know 2 players who got into 40k because of friends, only one of them still plays. I know significantly more who got into it and still play because they walked past the store and got curious.

Word of mouth from players relies on one thing: for there to already be players. The stores are meant to intrigue and entice those who don't already know about wargaming. The first question GW staffers are meant to ask new people walking into the store is "Have you seen this kind of game before?". They are set up to create new players, not convert existing ones.

Killing all the stores would remove a significant chunk of their visibility. Webstores won't make up the difference. Just because we warseerites spend a lot of time on the web and know about GW, doesn't mean all that many people do. And the web is a big place for something as niche as a wargaming company to try to gain attention in.

[Cxt]

If the numbers posted are correct, then GW's UK Stores are losing money. They exist due to the profit from the US and the Rest of the World.

It's impossible to quantify the advantages of having a retail store that losses you money, but may create return buyers through other avenues. It obviously happens, but does it overcome the loss in the first place?

For those that have the numbers, is the UK overall losing money? (With the profit coming from the US and the World?) Or are they just not making their 1/3 (I believe it was said 1/3 of business is done in UK, US, the World).


Overall, if the UK is losing money overall, then they obviously need a new strategy, as it doesn't matter if the retail stores are working as a recruitment venue, as the money lost is not being replaced by overall UK sales.

If the UK is making a profit, but just a much reduced compared to the other 1/3 parts of their business, then it certainly would be worth while for them to test out a reduced presence model in parts of the UK, if it doesn't work they can return to the inefficient but perhaps needed for the region retail model. If it does work, they can adopt a much more profitable model.

I don't know the numbers well enough, but others should be able to clarify the revenue/profit, which would then decide which of my argument's above apply.

[iamfanboy]

OK. McBoner. First off, you're straw-manning my argument. I never said that they should close all their stores (something that many panicky fans of GW immediately assume that anyone who suggests examining their retail chain is suggesting), merely that they should make their stores into central BIG locations for gamers, a Mecca for the area GW players. They should evaluate store locations on population density.

Second, if retail stores are necessary for a games company to have, any kind of games company, how do you explain the success of Magic: the Gathering? WotC doesn't advertise on TV or in magazines, nor do they have a retail chain, but I can go almost anywhere in the world (excepting Africa) and find a pickup game of MtG.

Third, you're entirely deluded about retail stores being the source of greatest profit for GW. The expenses of running a store (salary, rent, utilities, wear and tear) eat into any supposed extra profit margin they may gain, which I will now explain using small words.

I went back and looked at the financials again from when they were reporting the split in income, and holy CRAP was I far off...

Bad luck for the retail chain defenders though, because I was far off in FAVOR of the chain. The reality is a helluva lot worse.

Let's take 2007-2008, the year that I thought was the last they reported the split (it was not, but I'll get to that in a moment). Their income was 110m and their retail chain accounted for 51% of that (56m from their chain), but their stores cost 75m to run. Their direct sales (source of highest income) were 12% that year (13.2m), and their indie store sales accounted for 39% of income (42.9m).

In other words, their chain cost them 20m more to run than they earned from it.

Now, 2007-8 was a terrible year for them, so I also went to 2008-9.

Almost the same split as before on income (49% retail, 12% direct, 39% indie), with 126m income, meaning retail earned 61m, direct earned 14.6m, and indie earned 51m. However, their store chain expenses were 84m that year, despite closing stores and trying to tighten up their chain!

Not only did the retail chain eat up every cent of its income, but leeched from the income of more profitable lines.


Now, 2009-10 they stopped reporting the split on income, making me sad (and probably making them sad too, because that was the year they started pushing one-man stores and if it had been GOOD news they wouldn't've deleted the pie chart!) Despite the roll-out of one-man stores, though, the fact that their income was 125m and their retail chain still cost them 82m to run shows that whatever cost savings were ineffectual at best. The numbers were broadly identical in the 2010-11 report.

Man, now I'm actually a bit impatient for the 2011-12 report; it's fun taking these things apart. I was about to get into area numbers versus stores returned, but I was comparing current (2012) store numbers to 2011 income numbers, so it wouldn't've been accurate.

Still, to put any doubts about colonialism to bed, the UK has historically accounted for 35% of their total stores and has historically pulled in 30% of their income... when combined with Northern Europe, which has another 15% of their stores.

So, the areas with 50% of their stores earn 30% of their income, meaning the rest of the world is subsidizing the creches that you Brits call Games Workshop Hobby Centres. Good exchange, eh wot?

[Bloodknight]

I know 2 players who got into 40k because of friends, only one of them still plays.

An age thing perhaps? I took a break after about 15 years, too. When I got into GW games in the mid-90s they had 4 or 5 stores in Germany, thus it was basically stumbling over GW stuff in an indy store or getting introduced to it by someone who knew it already (I was inducted by friend, I used to play BattleTech only before that, and I got into that game as a 12 yo because of an advertisement with an ordering coupon in a computer magazine). We actually took the chance to visit a GW store once, somehow thinking they'd be awesome, but it was not really comparable to the indy we used to buy at. The indy had more and bigger tables (not that we actually played in the store - wasn't really practical at the time since getting to the indy was also a 50km drive and we mostly bought there because he gave massive discounts when you bought a lot, so we teamed up twice a year) and way more stuff ^^.

I know significantly more who got into it and still play because they walked past the store and got curious.

I don't know, I still think the stores are kind of lame and they got lamer since the managers don't get free stuff for the displays like they used to. I see mostly old stuff nowadays.

[McBoner]

OK. McBoner. First off, you're straw-manning my argument. I never said that they should close all their stores (something that many panicky fans of GW immediately assume that anyone who suggests examining their retail chain is suggesting), merely that they should make their stores into central BIG locations for gamers, a Mecca for the area GW players. They should evaluate store locations on population density.

Second, if retail stores are necessary for a games company to have, any kind of games company, how do you explain the success of Magic: the Gathering? WotC doesn't advertise on TV or in magazines, nor do they have a retail chain, but I can go almost anywhere in the world (excepting Africa) and find a pickup game of MtG.

Third, you're entirely deluded about retail stores being the source of greatest profit for GW. The expenses of running a store (salary, rent, utilities, wear and tear) eat into any supposed extra profit margin they may gain, which I will now explain using small words.

I went back and looked at the financials again from when they were reporting the split in income, and holy CRAP was I far off...

Bad luck for the retail chain defenders though, because I was far off in FAVOR of the chain. The reality is a helluva lot worse.

Let's take 2007-2008, the year that I thought was the last they reported the split (it was not, but I'll get to that in a moment). Their income was 110m and their retail chain accounted for 51% of that (56m from their chain), but their stores cost 75m to run. Their direct sales (source of highest income) were 12% that year (13.2m), and their indie store sales accounted for 39% of income (42.9m).

In other words, their chain cost them 20m more to run than they earned from it.

Now, 2007-8 was a terrible year for them, so I also went to 2008-9.

Almost the same split as before on income (49% retail, 12% direct, 39% indie), with 126m income, meaning retail earned 61m, direct earned 14.6m, and indie earned 51m. However, their store chain expenses were 84m that year, despite closing stores and trying to tighten up their chain!

Not only did the retail chain eat up every cent of its income, but leeched from the income of more profitable lines.


Now, 2009-10 they stopped reporting the split on income, making me sad (and probably making them sad too, because that was the year they started pushing one-man stores and if it had been GOOD news they wouldn't've deleted the pie chart!) Despite the roll-out of one-man stores, though, the fact that their income was 125m and their retail chain still cost them 82m to run shows that whatever cost savings were ineffectual at best. The numbers were broadly identical in the 2010-11 report.

Man, now I'm actually a bit impatient for the 2011-12 report; it's fun taking these things apart. I was about to get into area numbers versus stores returned, but I was comparing current (2012) store numbers to 2011 income numbers, so it wouldn't've been accurate.

Still, to put any doubts about colonialism to bed, the UK has historically accounted for 35% of their total stores and has historically pulled in 30% of their income... when combined with Northern Europe, which has another 15% of their stores.

So, the areas with 50% of their stores earn 30% of their income, meaning the rest of the world is subsidizing the creches that you Brits call Games Workshop Hobby Centres. Good exchange, eh wot?

You're totally looking at the value of stores the wrong way. You think GW maintain an apparently non-profitable retail chain just for the fun of it? Perhaps its worth considering the bigger picture and how much of the income from other arms of the GW business comes indirectly from GW's B&M presence. GW stores exist as a way for people who have no previous background in wargaming to get exposure to the hobby. Yeah, maybe they only pick up a paint set and a few models from a GW store initially, then go home and do all their main shopping from online discounters once they become more savvy, but at the end of the day its still money in GW's coffers which has come indirectly from a GW store.

I don't know why you're comparing GW to MtG. MtG is a pocket money line. It costs a store next to nothing to stock and it takes up very little shelf space and thus requires very little investment on behalf of the retailer. That's why MtG can be found for sale in anything from dedicated gaming stores to grocery stores. Yeah, congratulations to MtG for getting as big as it has, I don't know enough about its history to comment on how it got going, but the fact remains that its cheap, requires very little time investment from the customer and can be stocked by a retailer for very little investment. As far as gaming goes, its almost the complete opposite of Warhammer/40K. A more apt comparison would be Privateer Press. I wonder how much of their customer base are ex-GW gamers? I literally don't know anyone who's ever started Privateer Press without first being a GW player who became disgruntled and wanted to move on to something else. It'd be really interesting to see how successful PP would have been as a company without dedicated retail stores and players who got their first taste of hobby from a GW B&M.

[EmperorNorton]

You're totally looking at the value of stores the wrong way. You think GW maintain an apparently non-profitable retail chain just for the fun of it?

No, I'd say they are doing it because they are stuck in the past.

Perhaps its worth considering the bigger picture and how much of the income from other arms of the GW business comes indirectly from GW's B&M presence.

Outside the UK...probably very little.
And looking at the UK, breaking it down again, going by the numbers given by iamfanboy for 2008-9:
The UK plus Northern Europe accounted for 30% of their income, which was 38 million. This region has 50% of their stores and the cost for running these was 42 million.
Not only did the stores not cover their own costs, they ate up all the income generated in the region, including indy and online sales, and then some.
Unless you mean to propose that GW stores in the UK somehow introduce people from other parts of the world to their games, this kind of marketing does not appear to work.

[canberraguy]

GW does not have the stores to make major profits. That comes from 3rd party sellers. The main role of the store is to get new customers. It is, their advertising. If stores make big losses ( a sign they are not recruiting players) they may close. But the core role of the stores is not blitzing sales, but recruiting new customers.

[xxRavenxx]

I'll put out one good reason why GW stores work in the UK:

Every mother I have ever met knows what warhammer is. None of them have the foggyest what napoleonics is. Nor Privateer press, nor infinity, nor any other brand outside of dungeons and dragons, and magic the gathering.

That is the power of the stores: To bring warhammer to the knowledge of the public in the way that indies could never afford to do. (We rarely ever exist on main highstreets, its too expensive).

Recruitment is everything to GW. Lets assume that 50% of GW players were recruited by a friend. Where did the friend learn? The stores.

Oh, and also, I call BS on the idea that the UK GW stores cost as much as the whole profit for europe. There is no way a company would be so rediculously stupid with its money. Loss leading is one thing, devouring £42 million of profit is not something any company does.