I noticed this trend last year too. They demanded that retailers pre-order 12
boxes of gorkamorka and a case of sisters of battle. Two or three other
retailers in town banded together to get the boxes; my friend managed to move
all of GM through proactive sales to the ork nuts before they figured out that
the game sucked and was out of scale from 40K. He got stuck with about a dozen
sisters of battle when he had his close out sale.
I think that instead of deciding what was best for retailers, they wanted to
shift the risk to retailers. Supply side economics and economic darwinism at
once; the strong retailers will figure out how to push over-produced products
while the weak are buried in inventory. Pushing the conspiracy theory farther;
Who wants to bet whether GW stores have to order 3 boxes at once? Or that they
can transfer stock easily betwen stores. Thus GW stores have another economic
advantage over private retailers.
Thane
Dave Gentzler wrote:
> They're hurting big time. Sales, overall, are down. The last two boxed
> releases have tanked. The much-hyped Diamond sub-distribution bombed upon
> launch, with many of the solicited items pulled immediately. Retailers are
> dropping the entire product line in droves (read Comic Retailer, an industry
> magazine and you'll see that several retailers every month are no longer
> carrying GW stuff. This is indicative of a trend). GW claims that
> everything is just peachy, pointing to dramatically higher sales of boxed
> items last year. But...
> The reason for this is GW's policy change to a minimum of TWO of any
> boxed item ordered. What this means to the average retailer is that when he
> sells, say, a copy of WFB, he can't only restock the sold item. He has to
> restock TWO of it. This means that when he sells the first of the restocked
> boxes, he makes NOTHING, since that pays for both his copies. It isn't until
> he sells the second copy of the game that he sees a profit on his
> expenditure. GW has decided that THEY, not the retailer, know what's best
> for the retailer. Small retailers, as most comic/game stores are, cannot
> afford to tie up that much capital on overstock product. Hell, entire other
> product lines could be carried for that money (product lines that produce
> profit upon sale, not sit on an overstock shelf). Our store, once a GW
> juggernaut, has cut orders for GW product dramatically because of this
> situation. Blister pack minimum orders for new releases are SIX! Why should
> a store be forced to carry six of a character model blister that they feel
> they could initially move two of? And if we guess wrong, reorders can be in
> in a matter of days anyway. No need for six, except to soak the retailer.
> Now that shop are well-stocked from having to order the two box thing,
> expect to see GW numbers for this year plummet.
> And just this Monday, in an effort to artificially pump the numbers some
> more, they changed it AGAIN. As of now, the minimum order for boxed items
> (that's ANY boxed items) is THREE. Sell a steam tank, you gotta reorder
> THREE. This will, I predict, be the final nail in their coffin. No matter
> how much GW wants the mail order market they must realize that without
> product sitting on retailer shelves they have no visibility to the public
> (and the target kiddie audience doesn't have credit cards to order from mail
> order whenever they feel). No retail level visiblility means dramatically
> reduces sales.
>
> They're idiots, and by this time next year they'll be half the size they are
> now.
>
> -----Original Message-----
> From: Crocker, Cyril <ccrocker_at_...>
> To: 'space-marine_at_...' <space-marine@...>
> Date: Wednesday, May 20, 1998 12:27 PM
> Subject: RE: [Epic] Epic rumours
>
> >I don't call any company that makes a net profit AFTER taxes greater
> >than $1 million US hurting. Sales may be lower but I'll be damned if
> >they're in any trouble.
> >
> >----------
> >Cyril Crocker
> >Computer Technician
> >Proctor & Redfern Ltd.
> >ccrocker_at_...
> >----------
> >
> >
> >> -----Original Message-----
> >> From: William Rood [SMTP:wrood_at_...]
> >> Sent: Wednesday, May 20, 1998 10:31 AM
> >> To: space-marine_at_...
> >> Subject: Re: [Epic] Epic rumours
> >>
> >> I know I'll bore most of you with this, but here is the current
> >> Industry
> >> report on GamesWorkshop (US) Inc.
> >>
> >> The important figures to look at are Net Sales (11.48 Million $US) ,
> >> Gross
> >> Profit (6.24 Million $US), and Net profit after Tax (1.51 Million
> >> $US). This
> >> is down from all of their previous years. GW is hurting. And the
> >> interesting thing - the industry analysts state only one reason : they
> >> are
> >> targeting the wrong audience.
> >>
> >> They are focusing on 12-14 year old males who will only maintain the
> >> hobby
> >> for a few years. The analysts state they should be focusing on the
> >> 18-35
> >> crowd who are not looking for a passing fade, but a serious hobby, and
> >> have
> >> the income to spend.
> >>
> >> I hope this was of some interest, and may explain the recent rash of
> >> sales,
> >> failed product lines, etc. al.
> >>
> >> Regards,
> >>
> >> --
> >>
> >> // William Rood - Systems Development
> >> // Dow Jones and Company, Inc.
> >>
> >> -------------------------------------------------------------------
> >>
> >> LAST INDUSTRY UPDATE: 04/04/98
> >> DATE PRINTED: 05/20/1998
> >>
> >> INFO:
> >> STARTED 1984
> >> EMPLOYEES: 190
> >>
> >> GAMES WORKSHOP (US), INC
> >> 6721 BAYMEADOW DRIVE
> >> GLEN BURNIE
> >> MD 21060
> >>
> >>
> >> INDUSTRY ASSETS OVER 1 MIL. (NO GEO)
> >>
> >> FISCAL 05/31/96 106 FIRMS
> >> % CHANGE SUBJECT IND %
> >> %
> >> CASH.................. 2,418,361 312.6 43.5 9.2
> >> ACCOUNTS RECEIVABLE... 222,561 ( 66.3) 4.0 27.8
> >> NOTES RECEIVABLE...... ----- --- --- 0.6
> >> INVENTORY............. 1,258,346 20.3 22.6 39.4
> >> OTHER CURRENT......... ( 68,111) --- ( 1.2) 6.4
> >>
> >> TOTAL CURRENT......... 3,831,157 66.0 68.9 83.4
> >>
> >>
> >> FIXED ASSETS.......... 334,104 99.0 6.0 11.0
> >> OTHER NON-CURRENT..... 1,393,086 113.8 25.1 5.6
> >>
> >> TOTAL ASSETS.......... 5,558,347 77.7 100.0 100.0
> >>
> >>
> >> ACCOUNTS PAYABLE...... 51,779 ( 60.9) 0.9 25.6
> >> BANK LOANS............ ----- --- --- ---
> >> NOTES PAYABLE......... ----- --- --- 8.2
> >> OTHER CURRENT......... 375,719 ( 21.2) 6.8 16.8
> >>
> >> TOTAL CURRENT......... 427,498 ( 29.9) 7.7 50.6
> >>
> >>
> >> OTHER LONG TERM....... ----- --- --- 7.0
> >> DEFERRED CREDITS...... ----- --- --- ---
> >> NET WORTH............. 5,130,849 113.2 92.3 42.4
> >>
> >> TOTAL LIABIL & WORTH.. 5,558,347 77.7 100.0 100.0
> >>
> >> NET SALES............. 11,480,079 --- 100.0 100.0
> >> GROSS PROFIT.......... 6,252,593 --- 54.5 26.9
> >> NET PROFIT AFTER TAX.. 1,511,380 --- 13.2 3.6
> >> DIVIDENDS/WITHDRAWALS. ----- --- --- 2.3
> >> WORKING CAPITAL....... 3,403,659 100.4 --- ---
> >>
> >
Received on Thu May 21 1998 - 00:07:03 UTC
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