We knew this was coming because Games Workshop did the publicly listed responsible thing of issuing a post-Christmas warning and today, with the figures out, we can see the £2.5m drop in revenue.
Revenue for the last year stands at £60m, that’s down from about £62.5m the year before. As expected pre-tax profits are down by £1.2m to about £6.7 for the six month peroid.
Why the dip? Games Workshop blame this on poor sales. They point out that this has been cushioned by better gross margin improvements – ie, they make more money with each thing they sell, they just sell less things.
So, what are Games Workshop planning to do about it? They’ve announced they’ll concentrate in investing in their “one-man” Hobby Centres. I read that to be – more shops, less staff, but I might be wrong.
Is opening more stores the thing to do? I imagine retail rent rates are falling so it might be cheaper for Games Workshop to invest in stores right now. The local store in Edinburgh seems to be pretty busy and it certainly acts as a centre of all things Warhammer for some local groups. Do the stores keep interest levels high? I suspect they might do. Nevertheless, in this digital age, investing in bricks and motar seems to this blogger like a bit of a risky and slightly dated strategy.
Update: Here’s an interesting update. Games Workshop are now blaming staff for the poor sales, rookie staff. In a quote in This is London CEO Mark Wells says;
“We made some changes to our staffing in stores, so in the school summer holidays, when our stores are busiest, we had inexperienced managers and we were a bit flat-footed.”
