Post by jackedup on Jan 9, 2014 10:38:24 GMT
Tom Kirby (GW CEO) seems to be kicking off the planet. Particularly in his recent preamble:
"We have also had a shift in the balance of our owners.For three entirely different reasons each of our largest holders has done some selling. This has allowed those who have wanted to own us for a while the opportunity to buy. The fact that we have been paying a lot of surplus cash out as dividends hasn’t put them off! We’ll see what happens when we have a bad year and stop."
The biggest shareholders are selling, in spite of GW's good dividends. That is a significant event. And as a CEO, Mr. Kirby decided to address this with a flippant remark.
"I have written a great deal over the years about the ‘greatest danger’ facing Games Workshop. It has usually been in response to the expression of some fear of imminent doom. When will the world tire of miniatures? (It won’t; these are not fashion items,they are hobby collectibles.) Won’t all your customers moveon to computer games instead? (They didn’t; most of our current customers weren’t born when the Atari ST came out.) How about other games like Pokémon or role-playing games?(Who can remember them, now?)."
Why tell your investors that RPGs have no longevity, when you are producing an RPG? And the assertion about no one remembers Pokemon suggests how out-of-touch Tom is getting. A niche business should not point fingers at a mutli-billion dollar industry, and claim it's a model they don't WANT to follow.
And existing customers may not move to computer games, but computer games are seizing (potential new customers much faster than the miniatures market. No one is asking about GW's vaunted customer rentention strategies. We're asking about customer ACQUISITION strategies, which aren't addressed here.
Some OTHER worrying things in the annual report:
"Recessions. Our customers are, on the whole, middle class and well placed in times of economic hardship. We cannot pretend that recessions (or booms) have no effect at all, but be cause we are a niche hobby they have less of an effect than for mass marketers. So long as we retain tight controls of our costs we can ride occasional rough weather."
No. Customers are, on the whole, upper middle to high income earners. And why is cost-cutting the solution, as opposed to actually trying to earn more money? Budgeting is a method I'd expect from a guy who runs a grocery store, not a large corporation.
"Product quality is the best defence. Our miniatures are of extraordinary detail and have very high costs associated with their production."
So the defence against copyright infringement is to make the product cost so much to make, no one even wants to copy it. And then to foist that cost on the customer base.
"Other people will produce great games and products.The dangers lie not in these realities, but whether we keep making fantastic models and providing great services, in our management skills and just as night follows day, in our ability to find the right people to carry the business forward. This is why we put so much energy into our management training programmes and in particular how we recruit."
Okay, so the people running the Hobby Centres help to generate a lot of profit, and a lot needs to go into those hobby centres. Makes se...wait...
"...sales were up by 3.5% from £131.0 million to £135.6 million; progress was achieved in North America (+7.8%), Export (+2.3%), Asia (+10%) and in Other sales businesses (+27.2%) while sales in the UK (-1.4%), Continental Europe (-0.3%)and Australia (-4%) were in decline."
So Asia, in which there are fewer hobby centres, experienced a 10% growth. And the regions in which there were more hobby centres fell behind it. Come on Tom; are you sure you wouldn't make more money just by going through other retailers, rather than retailing yourself?
"We have also had a shift in the balance of our owners.For three entirely different reasons each of our largest holders has done some selling. This has allowed those who have wanted to own us for a while the opportunity to buy. The fact that we have been paying a lot of surplus cash out as dividends hasn’t put them off! We’ll see what happens when we have a bad year and stop."
The biggest shareholders are selling, in spite of GW's good dividends. That is a significant event. And as a CEO, Mr. Kirby decided to address this with a flippant remark.
"I have written a great deal over the years about the ‘greatest danger’ facing Games Workshop. It has usually been in response to the expression of some fear of imminent doom. When will the world tire of miniatures? (It won’t; these are not fashion items,they are hobby collectibles.) Won’t all your customers moveon to computer games instead? (They didn’t; most of our current customers weren’t born when the Atari ST came out.) How about other games like Pokémon or role-playing games?(Who can remember them, now?)."
Why tell your investors that RPGs have no longevity, when you are producing an RPG? And the assertion about no one remembers Pokemon suggests how out-of-touch Tom is getting. A niche business should not point fingers at a mutli-billion dollar industry, and claim it's a model they don't WANT to follow.
And existing customers may not move to computer games, but computer games are seizing (potential new customers much faster than the miniatures market. No one is asking about GW's vaunted customer rentention strategies. We're asking about customer ACQUISITION strategies, which aren't addressed here.
Some OTHER worrying things in the annual report:
"Recessions. Our customers are, on the whole, middle class and well placed in times of economic hardship. We cannot pretend that recessions (or booms) have no effect at all, but be cause we are a niche hobby they have less of an effect than for mass marketers. So long as we retain tight controls of our costs we can ride occasional rough weather."
No. Customers are, on the whole, upper middle to high income earners. And why is cost-cutting the solution, as opposed to actually trying to earn more money? Budgeting is a method I'd expect from a guy who runs a grocery store, not a large corporation.
"Product quality is the best defence. Our miniatures are of extraordinary detail and have very high costs associated with their production."
So the defence against copyright infringement is to make the product cost so much to make, no one even wants to copy it. And then to foist that cost on the customer base.
"Other people will produce great games and products.The dangers lie not in these realities, but whether we keep making fantastic models and providing great services, in our management skills and just as night follows day, in our ability to find the right people to carry the business forward. This is why we put so much energy into our management training programmes and in particular how we recruit."
Okay, so the people running the Hobby Centres help to generate a lot of profit, and a lot needs to go into those hobby centres. Makes se...wait...
"...sales were up by 3.5% from £131.0 million to £135.6 million; progress was achieved in North America (+7.8%), Export (+2.3%), Asia (+10%) and in Other sales businesses (+27.2%) while sales in the UK (-1.4%), Continental Europe (-0.3%)and Australia (-4%) were in decline."
So Asia, in which there are fewer hobby centres, experienced a 10% growth. And the regions in which there were more hobby centres fell behind it. Come on Tom; are you sure you wouldn't make more money just by going through other retailers, rather than retailing yourself?