WARNING: EXTREME LANGUAGE
Yes, I'm cynical. Yes, a little butthurt, but as always I will use my business mind to interpret their report and turn it from shareholder wank into actual English. This opinion is, as always, wholly my own, I'm making no accusations, threats or defaming them, I'm just saying how I personally read it, and if it happens to defame or accuse the writers, well, they should have made more of an effort not to confuse me...
So, on with the show!
On why they are losing money:
"One bit of the GMP remains stubbornly unrealised– sales growth. We knew that the huge infrastructure changes we have been making these last few years (and are still making, we have just signed off on a new ERP system) would be disruptive, so we are not surprised that many trade accounts across Europe no longer trade with us. Nor are we surprised at the amount of work we have to do to get great managers in all our stores following the move to one-man operation. Our efforts, unfortunately, have coincided with truly dreadful trading conditions and, for the first time in our history, a year when the pound was strong against the euro and the dollar simultaneously. Our natural hedge hasn’t been one this year. You can see the effects of our lack of sales growth in our gross margin, cost-savings in the maintenance of our net margin, and currency everywhere."
Read this as: "We lost money, we think it's because of the economy, and because we keep making our stores smaller."
What I see: We don't realise that we have competition such as Privateer Press, Fantasy Flight games, Mantic etc. Not only this, but we don't seem to understand that small stores located down dark side streets in the cities of the world don't draw in new blood to the hobby, in fact, the only people hanging around some of our stores are wearing suspicious trench coats.
On their market:
"Our customers tend to be teenage boys and male adults with some spare money to spend and time to enjoy hobbies. I'd like to think our Hobby- modelling, painting, collecting, gaming -is for any one. Our customers are found everywhere. Our job is to, on a day to day basis, find them, commercially, wherever they are."
Read this as: "We think teenagers are the crux of our hobby. We also think that these people are everywhere despite our incredibly high buy-in cost."
What I see: GW honestly thinks that teenagers are their heart and soul. Yes, whilst some hobby centers would see a lot of teen activity, this is more likely due to adults mostly hanging around their FLGS and trying to stay away from the GW stores as they feel uncomfortable there. This isn't a dig at the staff I will add, but to be the only other adult in a store full of teenagers with nothing but hobby in common isn't an inviting atmosphere. Also, I want to know how many fucking teenagers are buying Titans, I'm willing to bet not a single Warlord was picked up by a teenager at the last Open Day. If you're a teenage nerd, you can get 2 brand new Xbox or PS games for the cost of a starter set, and that's before glue, tools, paints etc. They're going to get 5-10 years out of their console, so what looks like value to them?
On price structuring:
"Secondly I will review our product range. We believe this is long overdue: it is time for a resetting of the ranges. Not tweaking here and there but a top down reassessment. I expect to update you further at the half year. We will aim to continue to deliver outstanding product and customer service, maintain our Group gross margin and continue to improve our Group stock turn. To be absolutely clear I will not be reducing the RRP of our products: they are premium priced for their premium quality. I will, however, be looking to offer a broader range of price points. This is exciting and is for the long term, so I'm not promising when you will see a change. We have already started the brainstorming in our monthly strategic product meetings. It is early days,but I can already foresee some busy times ahead."
Read this as: "We aren't sure what is selling or why. We want to see if we can change our prices and make more profit."
What I see: We are changing prices. Well, paint me blue and call me a smurf, but if they won't go down, well, what other direction do they go? Also, reviewing the product range means 'don't need those armies because they don't sell'. This I believe is because GW thinks miniatures only sell based on their aesthetics (I can prove that point next) so when they see Bretonians don't sell it cannot be because they haven't had any rules in a decade.
On quality control:
This is an indicator of the effectiveness of our design studio and our continuous improvement in design to manufacture. We measure this by looking at sell through. If the product is great we sell a lot, if not we sell very few."Read this as: "We think people only buy good quality kits. Thus, if they sell, they must be good quality."
What I see: People buy kits for their looks. These would probably be in the minority, but lets just call them half anyway. Did it occur to nobody working at head office that maybe, just MAYBE, if a kit has really good rules, it will sell, but if it sucks, it can look good but hardly sell? Let's see, how many Wave Serpents do I think sold in 6th ed compared to in the past? How many Vypers sold in 6th ed? Personally, I think the Vyper is a sexy miniature, but its rules have been a bit so-so since the craftworld dex of 3rd ed. I'm pretty sure they weren't a big seller. To me, quality control is how many unsatisfied customers you have. This goes hand in hand with feedback, GW is not a fan of hearing from the people, the standard response to an email is more or less 'fuck off' unless you're a share holder. For those who brave the process however, if you're not happy with something, they will replace it (re: all of finecast).
On why Australia gets charged so much more for the hobby:
"He also manages our three main distribution hubs in Nottingham (UK), Memphis (USA) and Sydney (Australia). A personnel manager and our Academy personal development and skills training ensure we take our people recruitment and development seriously."
Read this as: "There are 3 warehouses that hold almost all of our stock in the world, we MUST ship to them before other countries."
What I see: We (GW) have no excuse for ripping off Australia, we just charge what we feel like, based on a favourable exchange rate we picked when their economy sucked. Shipping has nothing I repeat NOTHING to do with it, otherwise prices would only rise from having to further ship the models to more countries outside of Oz. (Wait, if you're a Kiwi, nevermind, they do go up. Fuck You, sincerely, GW) Also, I am aware of taxes, and how much they must sell for to make a profit, blah-di-blah. End of the day, these sprues cost like 12c to make each, they sell for around $70 on average, and only cost about $200 per ton to ship.
We have taken the decision in the year to rebrand our stores ‘Warhammer’ . It is what our customers call us. This will be rolled out progressively, as and when we open new or refurbish our existing stores. At the year end we had 13 Warhammer branded stores."
Read this as: "We think we can get more brand recognition."
What I see: Actually, I totally agree, but what I find hilarious is that at a time when they are pushing the name "Age of Sigmar" with Warhammer as more of a background term, it's like naming your child "John" then telling everyone he is called "Bob", people are gonna refer to the kid as Bob! Maybe this one is just me. Or Bob.
The Wrap Up:
I could go on and on and on, just picking through the dribble and looking at GW as a company, but that's not what I was going for here. I wanted to show why I am a bit cynical about GW handling things like the Horus Heresy, because clearly, the people running the company aren't focused on the right things. They just want money, and the first places they look are raising prices and removing stores/staff.
Here's a fucking thought, make your game affordable so you SELL MORE. You tell me, what's better, sell 24c of sprues for $72, or sell 48c of sprues for $40 each ($80)? Sure, if you drop the cost of a sprue and only sell the same amount, you're going to lose money, but when people want a big shiny army, they will not be buying just one sprue, they will want to buy the extra sprues! They might even catch their eye on some new paints and buy those too. Business 101 people, you think China sells their recasts at GW costs to make a profit? Hell no! They make a profit by selling more, for a tad less, honestly, it's the simplest approach on Earth!
In the end, to summarise, GW thinks that we all:
a) buy models just for looks
b) will keep buying no matter how much they raise their prices
c) are all teenagers and the occasional neckbeard
d) all have heaps of time to play, so fuck our kids, screw the spouse it's hobby time at GW!
e) can justify the cost of their hobby against others
f) buy their products regardless of the rules
Now, honestly, do you have to ask why I have a hard time trusting these people?