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 azreal13 wrote:
RE: Leases.

Any new owner wouldn't necessarily be beholden to any agreement signed by GW (just as a landlord wouldn't necessarily be o

Afraid not. If a new owner buys the business, they buy the existing leases.

A commercial lease is a binding contract and if you are the new owners, you will be obliged to contintue to pay the rent, unless you can sell on the lease. Of course, you will appeal to the landlord and try and get a rent reduction, but they're not obliged (look at the recent sales of Woolworths, Waterstones, HMV, etc etc). The best way to get out of onerous leases is to go into administration. This is in the UK of course.

 Hivefleet Oblivion wrote:

HairySticks wrote:
...
Now theyre axing that too, presumably because plastic is even cheaper. The more costly tooling is presumably irrelevant because of sales figures; Seems obvious that the plastic kits outsell all others by far and so cover their own higher initial investment easily. The more they sell the cheaper each one actually gets for them as its dirt cheap to run off more, and the pricey design/tooling stage is done. So the margin just grows and grows the longer they can keep a kit viable and selling. - all these really really old kits still on the shelves shouldve already covered their own design and tooling costs many times over...

All of this logic completely omits overheads. Product will take up shelf space in GW stores that cost a huge amount to run (of which more in a mo); the company itself will have massive overheads, including rent, staff, you name it. So simply talking about the costs of plastic and tooling alone, doesn't tell the full story.


A second-hand acquaintance of mine set up a fairly large book chain, whihc was ulitmately bought by a multiple. The multiple made a few bad deals and had to sell all of its book shops; the friend wanted to buy back his own, old chain. His decision, ultimately, was not about selling books - it was all about good leases and bad leases. He reckoned his old business was now no longer worth buying, on the basis of the leases.

As we know, GW has a huge number of retail outlets - these are a massive cost sink, and whether they're on good leases or bad leases would, for instance, be a crucial question for any prospective purchaser.

I ignored retail related overheads on purpose, because while GW might seem to want to be the only place you can get their stuff, independents still exist and all of their retail related overheads could be zero by encouraging 3rd party stockists, instead they want to sell in their own stores, with 1 member of staff, purely to increase the margins; they make more per sale out of a GW than they do out of a independent retailer by a good 20% or so.

So in my head there is a retail department that operates seperately so the design and manufacture departments. You cannot judge a product simply by its sales inside GW only stores as its not the only place it sells. And frankly I expect that places like wayland games, the warstore and darksphere all massively outsell most GW stores on GW products because of the discount available compounded by the increasing difficulty to actually get served inside a GW store due to the 1man model. I always figured the premium at GW stores covers things like the painting classes, gaming sessions, open tables and the community part of it... now that stuff cant happen because of the 1man model... so there is zero real reason to pay GW's retail prices; they really like to shoot themsleves in the foot, and seem blissfully ignorant of a world outside GW.

Sure. But the bulk of the cost price on the items will nonetheless be the company overhead.

I'm not sure that the stores exist solely to increase their margins; it's been stated by them that a major part of their retail ethos is customer recruitment.

 Hivefleet Oblivion wrote:
Sure. But the bulk of the cost price on the items will nonetheless be the company overhead.

I'm not sure that the stores exist solely to increase their margins; it's been stated by them that a major part of their retail ethos is customer recruitment.

But the customer recruitment part of it is gone now - 1man store model means that the staff has to drop everything if a sale is possible - so no painting tutorials, gaming sessions, campaigns, open gaming or basically anything that will get in the way of operating the till and making sales pitches.

Sure these thigns probably still happen, but with greatly diminished results because the guy talking to you has to keep stopping to go make sales, your 30minute or 1 hour painting lesson might actually end up being 20minutes of listening to another customers sales pitch waiting for guidance. I just dont see it working as a recruitment platform this way when the community aspect has been gutted from the retail chain int he name of cutting costs (aka raising margins)

 Hivefleet Oblivion wrote:

 azreal13 wrote:
RE: Leases.

Any new owner wouldn't necessarily be beholden to any agreement signed by GW (just as a landlord wouldn't necessarily be o

Afraid not. If a new owner buys the business, they buy the existing leases.

A commercial lease is a binding contract and if you are the new owners, you will be obliged to contintue to pay the rent, unless you can sell on the lease. Of course, you will appeal to the landlord and try and get a rent reduction, but they're not obliged (look at the recent sales of Woolworths, Waterstones, HMV, etc etc). The best way to get out of onerous leases is to go into administration. This is in the UK of course.

If they buy the going concern, yes.

This isn't the only way a new owner could acquire GW assets though.

If customer recruitment was really any sort of priority then some of the money recouped by going to 1-man stores would be spent on actual advertising.

I'm not a marketing guy, but one would think that an hourly or even bi-hourly spot on Cartoon Network would more than pay for itself in new sales.

Arendious wrote:
If customer recruitment was really any sort of priority then some of the money recouped by going to 1-man stores would be spent on actual advertising.

I'm not a marketing guy, but one would think that an hourly or even bi-hourly spot on Cartoon Network would more than pay for itself in new sales.

You'd think.

It isn't the only thing that GW's does that flies in the face of conventional thinking though, and the general mindset seems to be 'works' or 'doesn't work' when it comes to this sort of thing, 'works, but could work much better' generally seems to be too much effort for a company run by a CEO who has made himself wealthy already and is just coasting the last few years til he retires to a tropical island somewhere.

Arendious wrote:
If customer recruitment was really any sort of priority then some of the money recouped by going to 1-man stores would be spent on actual advertising.

I'm not a marketing guy, but one would think that an hourly or even bi-hourly spot on Cartoon Network would more than pay for itself in new sales.

Sure, whether their philosophy works efficiently is another question, but that's their philosophy. From the website:

"Hobby Centers focus on servicing new customers or beginning hobbyists. The staff excels in introducing people to our products though a series of activities known as Intro Games and Painting Demos. In only 10 minutes, a Games Workshop staff member guides a customer through playing our game and participating in our hobby. Putting the product in the customer's hands and allowing him or her to experience the game is our strongest sales tool..." (etc).

Which does not necessarily make it true.

The intent might be there.

In some cases it might even be achieved.

But with one man stores it is a great deal less likely to actually work.

GW is also moving to more obscure locations, so the high-street presence is dropping as well.

The Auld Grump

 TheAuldGrump wrote:
Which does not necessarily make it true.

The intent might be there.

In some cases it might even be achieved.

But with one man stores it is a great deal less likely to actually work.

GW is also moving to more obscure locations, so the high-street presence is dropping as well.

The Auld Grump

Indeed. When the entirety of the marketing for your retail operation is "Sometimes lost people wander in looking for 'Call of Duty' and we sell them things", being where people are seems paramount.

It does appear that, as Azreal13 says, the viewpoint of GW leadership is "I have money, and doing nothing makes me more money. Why should we expend time/money just to make LOTS more money?"

Looks like there is a pattern:
Yesterday again two blocks of 25k shares (=2x £130k = 2x $215k ) were bought in a row.
Seems like someone is collecting shares in (almost) half a million dollar steps, third or fourth time at least in the last 2 weeks.

 Kroothawk wrote:
Looks like there is a pattern:
Yesterday again two blocks of 25k shares (=2x £130k = 2x $215k ) were bought in a row.
Seems like someone is collecting shares in (almost) half a million dollar steps, third or fourth time at least in the last 2 weeks.

That's... interesting. Maybe someone is trying to take over the company (although I would not mind if the BoD got shuffled up)..

Being as the share price dropped to 514,50, it was probably a automated buy order kicking in.
Back at 516.25 now.

Would GW have some sort of automated share buy back set up if the shares dropped too low ?

Are these lumps being bought sufficient in size for the buyer to be declared? If so where would you find the info?

Unlikely, for a number of reasons.

Chief of which, when the shares were originally issued, they probably didn't sell for what they are currently valued at, the overall trend, as with all shares, is generally up, and despite the massive drop off, they are still probably worth more now than back in 1994.

As a PLC only actually sees cash from the sale of its own shares when it first issues them, if GW were to be buying them back now, they would actually be repurchasing them at a loss.

25k is nowhere near enough to show up on the record, GW have around 31m shares in circulation, so it is relatively small change, but if it is the same person/organisation with some sort of intent to acquire a significant percentage, they will cross that line eventually, keep an eye on the GW Investor Relations page if you're really curious.

 loki old fart wrote:
Being as the share price dropped to 514,50, it was probably a automated buy order kicking in.

No, all 25k buys were done manually. Though yesterday saw a couple of small automated buys.

You are probably right. GW down to 511.00 now
And nothings kicked in to buy.

So its still plummeting?

No, its varying up and down by about 10p a day, give or take, nobody is really buying or selling in any quantity, so its relatively stable.

It can look erratic because the Y axis on the price graphs expands and contracts depending on how wide a price range it needs to cover, but the truth is not a lot has happened since the big fall.

If you look at the 1 month chart, it is definately not stable and still on a downward slope. No longer plummeting, though I would guess that has less to do with a lack of people who want to sell.

Many are holding stocks right now purchased in the last 2 years. Selling now would be selling at a loss even including the dividend payments from the last couple years. A lot of investors have a hard time making that decision. After several weeks though, they will choose to cut their losses. When that happens, you will see a small spike upward followed by another significant drop when the automatic sell orders get triggered.

That usually will happen several times over the course of 6 months to a year. After it hits the bottom (likely 200-250p), it will stay there until GW can pull something out to get their dividend back.

In 2000, they were in the bottom of the trough for 6 months or so. In 2007, it lasted a couple years.

Valentine day saw one £100k buy plus several mostly automated minor sells.

 Kroothawk wrote:
Valentine day saw one £100k buy plus several mostly automated minor sells.

"Damn your flowers and chocolates woman! These are toy soldiers we're talking about!"

PhantomViper wrote:
2012 called, they want their financial analysis back... You do realise that close to 2 years have passed since that went on, right?

Monte dei Paschi, Cyprus, Greece... 22% youth unemployment in Europe. Yeah.. Europe is fixed. It's practically a growth engine. That's why they are debating the idea of confiscating all your savings publicly.

PhantomViper wrote:
Also, you still haven't explained what sales slump is that that only seems to affect GW but none of its major competitors...

I don't want to make blanket statements because each case is different and most of their competition isn't public so they don't have the same reporting standards.

That being said.. I mentioned that the quality of revenue and earnings do matter. There are games companies play with revenue recognition in order to meet numbers and the same crap is going on in this space. Basically, it's pulling forward future earnings until the point where they decide to come clean. Usually that decision is made while everyone is really happy so management doesn't get fired and the top dog usually shows their cards 1st. So, IMO... I think GW showed their hand 1st and you'll see others have to acknowledge the slowdown sooner rather than later. I can't do a sufficient job of explaining all the ways companies are legally allowed to do this, but I can recommend a book if people want to read it.

 azreal13 wrote:
Any new owner wouldn't necessarily be beholden to any agreement signed by GW (just as a landlord wouldn't necessarily be obliged to honour it either)

Would very much depend on the terms and manner of takeover, but a new owner could, potentially, discard the whole retail chain overnight.

Unless GW actually goes bankrupt.. as in actually files for bankruptcy.. They will be beholden to any agreements. This is a public company.. Not the wild west.

 Kroothawk wrote:

 loki old fart wrote:
Being as the share price dropped to 514,50, it was probably a automated buy order kicking in.

No, all 25k buys were done manually. Though yesterday saw a couple of small automated buys.

This is such nonsense.. There is absolutely zero way to tell how old the existing orders were. You'd have to be sitting there watching the level 2 or actually be the executing broker to know even one side of the trade. Knowing both sides means you'd have to be a broker in personal contact with both parties and do a cross. And if you did know, you'd be brought up on charges by your financial regulatory authority for disclosing anything to anyone about the origination or destination of the trade.

As to the "automated" vs "manual". I think the word you were looking for was an "algorithm". I've seen nothing to suggest anyone is running an algo on GW shares considering it's basically not traded and the spread is consistently quite large. I don't even think you have many market makers putting up their capital honestly.

Seriously.. You are just pulling crap from nowhere and trying to sound like an authority. This is really basic stuff and you have no idea what you are talking about. Every single "buy" you are talking about also had a "sell" attached to it and you have no idea when each order was input.

 Kroothawk wrote:
Valentine day saw one £100k buy plus several mostly automated minor sells.

This is laughable.

dereksatkinson wrote:


This is laughable.

I don't know if I would say laughable. Cute, as in look at the kitten trying to walk straight. This thread is quite amusing so far.

dereksatkinson wrote:
As to the "automated" vs "manual". I think the word you were looking for was an "algorithm". I've seen nothing to suggest anyone is running an algo on GW shares considering it's basically not traded and the spread is consistently quite large.

No, I am using the information of the website I quoted, listing each buy and distinguishing between ordinary and automatic buys.

Monte dei Paschi, Cyprus, Greece... 22% youth unemployment in Europe. Yeah.. Europe is fixed. It's practically a growth engine. That's why they are debating the idea of confiscating all your savings publicly.

Well, if you think, Cyprus and Greece are the markets that decide GW's destiny then we don't have to talk any further.

Seriously.. You are just pulling crap from nowhere and trying to sound like an authority. This is really basic stuff and you have no idea what you are talking about.

Thanks, wanted to say the same actually.

Just popped in to see if it was the world against derek still. Leaving satisfied.

Play nice.

The Auld Grump

The ignore function is there for a reason.

Buy gold!

Actually, play nice!

Seriously.

I am still amused GW has a 7 year pattern of loose all value and then rapidly recoup it. I really want to see this happen again.