GW's Profit Rises
Stores, Independents, Products All Cited
Published: 08/01/2012 12:46am
Miniatures powerhouse Games Workshop reported stronger sales and earnings in its preliminary fiscal 2012 results on Tuesday, citing its own stores, sales to independent retailers, improved products, and its new shorter lead time on product information as contributors. Earnings per share for the eyar ending June 3, 2012 were up 30% to 46.8p, and sales were up 6% to £130.8 million (in constant currency).
Sales were up in all of the company’s key markets, with North American sales up 11% to £33.6 million. Operating profit in North America was up 35% to £4.2 million.
CEO Mark Wells described a number of factors that contributed to the company’s improved performance. GW devoted significant attention to improving the quality of its store management, using techniques such as its Hobby Skill Camps, quarterly gatherings where every store manager receives training in GW’s 10 Commandments of Customer Service. Two bonus systems were also implemented, one based on the over-all profitability of the company, and a second for store managers which paid out 20% of sales increases over product inflation to the managers of the stores.
Recruitment, training, and coaching for store managers were also improved, as well as expansion of the company’s one man stores, which have smaller formats to improve profitability. Stores in the one man format were opened in Atlanta, Cincinnati, Denver, Indianapolis, Orlando, Phoenix, and San Antonio. One man stores typically turn a profit within one year of opening, Wells said.
On the product side, the relaunch of the Citadel paint range, which was extended from 75 to 145 paints, was well received according to the report, with worldwide sales of the line amounting to £2.75 million in April alone. Improvements in the Finecast line (see "Games Workshop's Finecast Transition") were also cited.
GW instituted a modular approach to stock for independent retailers to help them stock and re-order the bestselling products every month. Management of staff that deals with independent retailers was also improved, with reps now divided into "hunters" who find new accounts, and "farmers" who manage existing accounts.
Wells also touted the company’s new policy of not revealing new products to its independent retailers and distributors until the weekend before release, claiming that sales of new products have been significantly higher "as a result."
Wells did mention one upcoming release date: the company’s range based on The Hobbit will release in December (see "Games Workshop Gets 'The Hobbit' Movie Rights").
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