Cut backs

[ACID CAT]

I got this from one of the Sunday papers.

FANTASTY games retailer Games Workshop are to close 35 stores and cut 280 jobs after issuing a second profits warning yesterday(04/05/07).
Shares in the group slumped more than 22per cent after they said deteriorating sales in Europe, particularly in France and Germany, meant full-year frofits for the year to the end of May were "unlikely to meet expectations".
the company did not say if their 120 sites in the UK would be affected by the closures.

What do you think is going to happen?

[PaleKing]

Can you point to more detail please? Where on the net?

[Alasandril]

There's a big bit on Warhammer Empire about it.

www.warhammer-empire.com/theforum/index.php?topic=16048.0;topicseen

[tamb2000]

the official statment from GW's investor relations site

investor.games-workshop.com/investor_relations/latest_from_gw/rns_announcements/documents/RNS03-May-07Announcement.htm

for some reason a space which dosent exist is appearing in that link in the word announcement between the e and the m take it out for link to work

[gbdarkangel]

Just as i was thinking of getting back into WHFB i read this.
Dosent surprise me though as GW has gone from over £26 million net profit to around £2 million net in a little over 10 years.
They had loads of options years ago to cut costs and prices but for some strange reason the chose to completely ignore them and just keep raising their prices and if government legislation on Gate Prices is ever introduced the GW will go belly up in a week. Can you imagine going into a store and seeing a box of mini's for £25 and the Gate Price of £2 stamped on it also.
My take on this is that GW will become an online only retailer within the next 10 years.

[PaleKing]

gbdarkangel said:

if government legislation on Gate Prices is ever introduced the GW will go belly up in a week. Can you imagine going into a store and seeing a box of mini's for £25 and the Gate Price of £2 stamped on it also.

I'm not familiar with gate prices. Can you explain more?

[gbdarkangel]

Gate Price is where a Firm must put the actual cost to make the product on the packging also.
It basically is just the cost of raw materials and labour.
eg..Raw materials =5p Labour = £1.50. Rrp = £15 That kind of thing.
The big supermarkets threatened to take the government to court a few years ago over the issue and they backed down but told them that it would eventually come into force.

[Asurya]

I don't think that the introduction of a Gate Price legalistion will be the end for GW. Every business in the world since the dawn of time has charged more for a product than the production cost.

Don't get me wrong, very few companies charge as large a markup on their products than GW, but the DVD/CD industry is the same. Do we honestly beleive that it cost £10 for a DVD??, there some like 17p each, which is probably an even large profit that GW models.

Afterall, it doesn't cost £2 to make a box of models. When you consider the time that it takes from start to finish for a citadel miniture to go from concept drawings on Jes Goodwin's desk to a fully details model in it's box the costs get bigger and bigger. I mean, there was a rumour that the Leman Russ battletank mould, which retails in something like £25 took 11 years to pay for itself.

The second Leman Russ every made would have cost £0.01 but the first one would be the £250k mark as that cost includes the desigener's time/salary, the cost of the sculter's time/salary and then finally the cost of the mould.

Kinda drifted of course here but my point was that the very nature of mass unit production dictates that the second and subsequent products of the line help pay for the first and GW models are very good example of that and any Gate Price sticker would need to reflect this.