Forum adverts like this one are shown to any user who is not logged in. Join us by filling out a tiny 3 field form and you will get your own, free, dakka user account which gives a good range of benefits to you: No adverts like this in the forums anymore. Times and dates in your local timezone. Full tracking of what you have read so you can skip to your first unread post, easily see what has changed since you last logged in, and easily see what is new at a glance. Email notifications for threads you want to watch closely. Being a part of the oldest wargaming community on the net. If you are already a member then feel free to login now.

Financial Times (London, England)
May 4, 2007 Friday
London Edition 1
Purge of managers at Games Workshop

BYLINE: By TOM BRAITHWAITE

Games Workshop, the model figurine manufacturer and retailer, is firing managers in an attempt to halt declines in its continental European operation that yesterday caused its second profit warning of the year.

After falling sales in France and Germany, Tom Kirby, chief executive and chairman, said: "I'm as frustrated as hell about it. We strongly believe that these are management issues. That's why we're making management changes."

Shares in the company fell as much as 45 per cent before closing down 67 1/2p at 260p after Games Workshop said its sales and profits for the year to May had fallen short of expectations.

The profit warning came only three weeks after Alan Stewart, a non-executive director of Games Workshop and finance director of WH Smith, sold shares worth Pounds 2.6m at 350p each. Mr Kirby said the sale was above board and had been made to fund a divorce settlement.

To cut costs more aggressively, the company said it would shed 10 per cent of its workforce, close 35 lossmaking stores and reorganise its warehouse and back-office operations to generate about Pounds 7m a year of savings. The programme is expected to cost Pounds 6m, to be accounted for as an exceptional charge.

It also scrapped the final dividend "to avoid placing excessive short-term strain on the group's finances".

Games Workshop profited from the craze surrounding the Lord of the Rings films in 2001-03 as filmlovers snapped up related merchandise from the group's stores. With the passing of the fad, the company has had to refocus on its main Warhammer brand, but has been unsuccessful in replacing lost sales in France and Germany.

"The thing we're doing badly is we're not replacing those independent stockists who stopped stocking us after Lord of the Rings," said Mr Kirby.

He added that managers in the main markets of the UK and Australia had been more successful.

In January, Mr Kirby blamed a combination ofbad management and dwindling sales of Lord of the Rings products for a profit warning.

Funny about blaming LotR for the 'profit warning,' but I'd wager alienating and losing the support of independant retailers is indeed a major factor ...

- Boss Salvage

As Tazok bluntly noted, it's Kirby & Co that needs some jettisoning. LotR is the reason for the profit warning? Four years after the films left the theaters? Uhh.... Right...

"He added that managers in the main markets of the UK and Australia had been more successful."

Huh?

Australia is a main market (while Europe and North America aren't)?

You claim victories where you can find them.

Hey were is the guy that assured us GW is not axeing anyone?

Being axed?

Talk about mixed emotions, selling your GW shares and getting a great deal for them, but having to do it for a divorce. I would have dropped off a bunch of sprues at my ex-wife's house as equity.

"You sent me a million friggin toy soldiers!"

"Yeah, but each of those is worth 5 quid, you made out."

- Oaka

Well, I didn't really expect Tom Kirby to fire himself...

Good to see the "real" faults - bad management and dwindling LOTR.

Funny I thought it would have been:

1. Lacklustre sculpting
2. Alienation of gaming community
3. Competing markets
4. Continual shafting of customers that bought "varient" games the won't be supported, now hardly anyone would touch another one with a 10 foot pole.
5. Pathetic monthly toilet paper (WD mag)
6. Overpriced (yes Overpriced) plastic miniatures (pricing based on points values)
7. Disilusioned hobbyists that are playing other gaming systems for substance
8. Treating hobbyists as idiots
9. GW viewed as the pokemon of wargaming

Just my view anyway, but I don't think firing managers is going to change anything when its the product that stinks, you could put the best manager on earth in a shop but if he is selling sheep brains at a fastfood takeout he isn't going to get ahead no matter how good he is.

Jezza-

I don't think it is the product that stinks. Nor is it lower level mamagement. The pricing and the way GW deals with the indies is to blame. That all comes from upper management. They are creating problems and then blaming everything in sight.

But no, it isn't the product... it's the policies.

Though I will agree with the issue of cost per point. Space marines have more than doubled in price when you consider the price per game point issue.

ender502

Perhaps I should have clarified - Harlequins are brilliant sculpts, some other ranges marines for exmple have awesome art but then when i look at the figures i see lego men (in the plastic range especially dark angels). The 40k rules are dumbed down and now codexs are getting dumbed down.

The background and IP is great just the execution is getting crappier and crappier.

I agree. It's definitely the upper management and the policies with the independent retailers (aka their enemies/competition).

Lower level management can be replaced on fairly short order, and those problems are easy to solve. However it's the hirer level management that needs the shake up; you can't put a crown on a root canal to make the pain go away.

The cream always rises to the top.
So does the gak.
It is impossible to separate the two,
and stirring the pot only makes things worse.
-Anonymous

look into ur local gw store nowadays. almost 70% of the people inside are under the age of 16. gw is changing their rules to reflect this. i started 40k when i was in 7th grade (junior in college now) and the rules were hard as hell to understand! it was a "grown up" game, and i thought it was cool that i played (abeit poorly) a grownups game. now, its the opposite. you can make a full list in your freaking head and write it down in minutes. to me, thats not too fun specially with the nerfing of the rules...

What I don't get is why the board hasn't fired Kirby, and brought on someone who with restructuring experience (of a niche market company that has pissed off it's cult fan base).

I don't blame Kirby or anyone else at GW -- I blame the board of directors. They should have axed him a long time ago.

Posted By Dice Monkey on 05/11/2007 2:38 PM
Hey were is the guy that assured us GW is not axeing anyone?

Do you mean in this thread?:
www.dakkadakka.com/Forums/tabid/56/forumid/15/postid/163315/view/topic/Default.aspx

In hi9s defence, he did say it wasnt happening in North America. And it appears that it isnt happening in North America.

But you have to wonder how long it will be before GW as a company makes cutbacks at large throughout their empi...er... corporation internationally.

I wonder if it is because GW has flooded the european market and the point of saturation no longer makes them soluble economically? Pure conjecture of course. It doesnt appear that the market here is much better if at all, so perhaps the same might happen in North America as well.... I guess we will find out shortly. The end of the fiscal year reports are due soon.

Thanks for the heads up, Tazok. We knew there were to be 10% cutbacks, but werent sure until now where those cutbacks were going to be taken from at the time of the second profit warning.

It seems to me that a lot of you guys are making a lot of assumptions about this. Do any of you live in France or Germany where the management is being replaced and stores are being closed? Do you know for a fact that there isn't any problem with management there and that it really is the product that has the problem when all other regions seem to be doing fine?

It reminds me of the thread about that higher up selling his stock and people were talking about rats and sinking ships etc etc and it turns out he just needed money for his divorce settlement.

Don't be so quick to assume that GW is dead. Yes they have some serious waking up to do but I doubt that they are flat out lieing about the source of their problems in continental europe. Sure it may not be the entire issue, but you never know, the managers over there in those 35 bad stores might actually suck.

Posted By Hellfury on 05/11/2007 9:57 PM


I wonder if it is because GW has flooded the european market and the point of saturation no longer makes them soluble economically? Pure conjecture of course. It doesnt appear that the market here is much better if at all, so perhaps the same might happen in North America as well.... I guess we will find out shortly. The end of the fiscal year reports are due soon.

Well if GW's rules are badly written now, I can only imagine what playing poorly translated versions of them would be like: "In Assault Phase beginning, unleash power fist; for great vengeance. With 3+ hit dice roll to destruction. Space Marine happens. Then make Leadership."

As a matter of fact I do live in Germany and yes they took quite a beating from other systems. From our point of view it´s the rules and the management that stinks.

Posted By Wayfarer on 05/11/2007 10:07 PM


Don't be so quick to assume that GW is dead.

Not trying to be a butthead mate, but who is assuming GW is dead?  Not trying to defend anyone but myself, but I am not seeing it in this thread thus far.

But you do have a point about the european POV. This is, for the most part with a few exceptions, a north american centric board with not much perspective from the european arena. The management in europe may well be pants, but if management is anything like it is here in the states, theyre probably getting canned for not making enormous quotas. Again pure conjecture, but crap does roll down hill, especially in this instance.

So how long until Ted Kirby fires the whole studio and has to do all the sculpting and rules development himself?

Duncan: Are the rules translated as poorly as Asmodais joke rules?

Hellfury: It's more adrressing the usual attitude that appears in these threads than a specific post or two. You have to admit that lately (well past few years or so) there is a lot of sky-is-falling sort of attitude permeating the internet.


As for why GW has kept it's upper management, well, that's a problem with every corporation. Profits will have to hit such a low that another company snatches GW up before any sweeping changes occur I think. Then again I'm no MBA.

Posted By Wayfarer on 05/11/2007 11:01 PM

Hellfury: It's more adrressing the usual attitude that appears in these threads than a specific post or two. You have to admit that lately (well past few years or so) there is a lot of sky-is-falling sort of attitude permeating the internet.

Perhaps, but then again it may be better to address what is being said now, than to dredge up perceived notions about the past. As in, not making pre-emptive remarks about imaginary assumptions.

I did. Just because I include a little extra doesn't invalidate the rest.

I've been buying GW products on / off since the late 80s early 90s.....and I must say, they've certainly moved on, but not much.

I totally agree with the statement regarding the younger element in the hobby, I guess we need the younger players, because these are the players of the future, but right now I have disposable income that I will probably never spend in a GW bricks and mortar. Who wants to be seen as a freak hanging out with 12 year olds? Why would you want to hang out with 12 year olds that weren't part of your immediate family? So while GW are providing an outlet for the younger generations, they are alienating the older ( I'm 29yrs ) more affluent generations.

Added to this the poor sculpting ( compared to Rackham, Wyrd, Infinity ) the heavy reliance on what is considered by most to be cheap materials ( plastics ) and you have a failing product.

The WH40K I.P has awesome potential, but GW isn't the company to unlock that potential. At one point yes, but now I don't belive so.

GW has gotten too big, and has forgotten ( in my opinion ) the true values of the hobby. When all you consider is the bottom line, then it stops being a hobby and becomes a business.

I know how Kirby went mad - he though GW was selling wargames until, one day, he opened a Warhammer 40'000 rulebook.

GW has been a business for a long time. So has every other mini manufacurer.

This can't be true. GW sells miniatures. Kirby knows this, he said it. The game is second fiddle.

2.5 Million Pounds is alot for a divorce settlement don't you think?

And even if it isn't, you can't deny that the stock tanked soon after the sale. It's very suspicious either way you look at it.

Oh those crazy European men with their medieval management techniques!