Wednesday, March 18, 2009

Games Workshop meet the recession

I got a phone call yesterday that the club night at our local Games Workshop retailer was being shutdown. One casualty in part of a series of trickle-down cutbacks being ordered from Company (UK) Management. Over a dozen new employees in the Chicago Metro area got their walking papers to boot and as far as I know the lay offs were based on seniority and had nothing to do with any sort problems with the newly unemployed (which is the worst way to go.) Less hours open for business, less staff, less benefits = less operational costs. The part GW seems to be overlooking was this also means you sell less product, but more on that in a moment.

A brief history on our local club night. In June 07 when our local shop opened, the Store manager (Jeff) at the time had the brains and good sense to reach out to people over on the Adeptus Windy City Forums (the people who bring us Adepticon) Jeff got alot of positive response from area gamers. Myself and a bunch guys via AWC and former gamers who hung out at the former Hobbytown location all showed up for the grand opening. Alot of the online talk with jeff concerned the potential of having a "Club Night" where veteran games could come in after work and get a chance to play during the week..have the table space and feel comfortable there that the other folks there where serious gamers and not there to screw around. Initially it was invite only which we all liked. The genius of "Club Night" was it offered something to both sides. It offered us (old gamers/ vets) a great place to play and introduced to store to a bunch of players with expendable incomes. Attendance grew for just a couple to 6-8...to a dozen.

When we started running our fantasy campaigns and things just blew up. Not only did we increase the player base of club night but we easily turned a dozen or so 40K guys on to WFB and they all started WFB armies. In late summer of last year Club Night hit the saturation point where it was too big for the store. 30+ people in the shop after hours with 5 tables was just too much. People couldn't get table space and showed up thinking they could..too many people in the store led to difficulties in organization, people trying to reserve tables got nasty. Invite only had disappeared and random people where just showing up..many not to play to just hobby/hang out but there wasnt enough room for that either and people would be hanging out on the street in front of the shop 1/2 the night. In turn they had to reign things in a bit, tables began to get reserved for ongoing Fantasy campaign games, people just "hanging out" were kindly asked not to. Things returned to a more moderate weekly attendance of a dozen-15 people or so.

Initially under Jeff's management club night operated under his supervision and it was unpaid..meaning it was being done as a business tool, extracurriculary for him, as time went on he had to assign staff to it and even they willingly supervised it unpaid for a time period as they were playing too (they were off the clock andjust there to make sure we didn't burn the store down) We had some awesome games then staying there absurdly late in evening with just few of us finishing some epic game. Eventually full-time staff had to be paid to run it and the overtime pay hours caught the ire of GW command who wanted to know why they were keeping the store open late on Tuesday...overtimes a no-no in retail. It was allowed to continue given new hours (we had to be out by 10pm) and once it became an issue most of the core players on Tuesday help contribute by making all there weekly/monthly purchases on Tuesday night so the shop could show the sales to back up its existence, Once my current pal and manager Anthony took over he even amended the schedule on tuesdays so the store incurred no overtime staff costs. In the end it fell victim to economy and nothing we can do can change that.

GW's retail mindset in the Chicago Metro is pretty simple you have a bunch of small hobby centers to get people introduced, get them hooked then send them out to the Battle Bunker for games, tourney's, events etc. Problem is perception isn't reality and the Chicago Battle Bunker isn't in a centralized location for the Chicago Metro it's on the very Western fringe an hour drive if you live downtown or on the popular Northside, it could easily take you 2 hours to get there in traffic between 4-7 weekdays. That was the beauty of the Oak Park store close enough for the city guys and suburban guys like. The staff was very consistent with new employees often being people who had frequently hung out there so it was very easy to build a "community" of like minded gamers there. IF you know anything about business you know that when/if a community develops around your business you will inevitably be successful.

I know this from personal experience as this same thing happened to me in the early 90's around my first business..it became wildly popular due local support with a hot economy behind us..we expanded into my own current operations. (we bit off more than we could chew, being over ambitious but that's a whole other story)

Let's recap GW-OP sales were solid, community growing, long term staff, popular store, as far as I have been told its the best performing store in Chicago Metro outside the Bunker. What should we do?, let's throw a wrench in the mix, can 1/3 of the staff, cut back hours and try to make it like a crappy Mall retail location (who like all mall retailers are most likely getting creamed by the recession ) then lets cut the staff down to one guy alone on weekdays (this will be an utter hell for that individual in our store for sure) making the customer service complete shit.

The disconnect here makes absolutely ZERO business sense to me especially when you read GW's recent financial report where the CEO comes right out in a notice to stockholders and says, "As a niche business we are not effected by the usual macro economic factors" what that means is people will buy their plastic crack no matter what- over paying their rent, paying their cellphone bill, even over eating..its like being addicted to real crack. (There is a guy whose is a recent hanger on at clubnight whose unemployed racking up his credit cards buying GW product. Bill and I were joking around on the phone yesterday about starting a GW detox program for people) What that illustrates is sales are based on health of the brand name not on any individual product. When the brand is hot people are always willing to give it try even in light of bad press or a bad economy. Meaning if your operations aren't over extended you are recession proof. If you do have some bad apples shut them down and devote those resources to the good apples. Like expanding Oak Park to a mini-bunker was great idea that got shot down hard when space next store became available. (so instead of an extra 10 tables and potential huge scene developing around the shop we got a yogurt shop.)

We (Club Night Gamers) will make out ok, we have great group of players and email lists to stay in touch...a couple of us have the ability to host 6-8 people at our own places and for me yes this will mean more forced trips to the bunker. Which I dont mind, I just hate that staff is always different, and I have yet to see my pal Eric (who got transfered out there)

I know alot guys who had the motivation to buy exclusively at the OP shop, its was our FLGS, so it needed support..now that there's less motivation (no club night) So those 20% discounts all over the internet are a lot more attractive. Between this and GW killing it's own organized tournament scene in 2009 Games Workshop is 0-2 for the year...not looking to good. I feel sorry for Jeff, Anthony and Eric who started the OP shop and developed it into something special as they had the good sense to find out what their customers wanted, listen to them and adjust..they've done the right thing for the customers and the company but instead of being rewarded for a good job they get shit on for it.

36 comments:

Bill Sullivan said...

The events schedule also got gutted on corporate order- they replaced all of the existing events, which were expressly designed to have broad appeal, with hobby clinics for new players. Put quite simply, GW corporate is saying that they do not want veteran hobbyists in their hobby centers, and I, for one, no longer have any trouble spending my money somewhere else when the "cool events vs. discounts" balance has just had the weight taken off one side.

John@Plastic Legions said...

Bill,

Yeah the message is loud and clear, that's seems somewhat dyslexic in that the long term veteran is what you want to develop sales wise not "blowing your load" on new gamers as there is so much competition for their dollars..keeping the steady base should be all important.

Anyway sorry you got screwed, at least you know it was nothing you did..If I hear of anything I.T. oriented..I will pass it along.

Chicago Terrain Factory said...

Wonderful - now my slightly greater than zero chance of seeing people is officially reduced to zero. I think I'm done with GW.

John@Plastic Legions said...

Rich,

Once I start hosting some stuff
you will have to come by, there is always the bunker too, there is so much room there it is now pretty attractive. it's just going out there is a pain in the ass...

I'd love to get a game of Pirates in on that table you built too!

eriochrome said...

Well since GW gets their money however you buy their models I can see how they would look to focus on getting new players addicted in their mall type stores. I have never really liked their stores. Employees always seemed pushy and the space always seems cramped.

We do not have a bunker here in the Detroit Metro area but I have been to 4 different GW stores and would take any of the local independent stores over them. The local independent stores do not run as many events but I prefer a few select things with plenty of notice anyway.

cadian127th said...

Thats just wonderful corporate policy. I can't even be bothered to travel 45 minutes to use the main GW store in Nottingham, UK, so Ican't imagine what it would be like having to travel for up to 2 hours for a game.

Hope that you manage to keep your squad of Vets. together though. Good luck guys.

- Courtney @ Cadian 127th

Anonymous said...

I would like to suggest Black Sun Games on Kedzie. The store is small, but the owners are great guys and their is a very active gaming group dedicated to GW stuff.

Nathan said...

This was something that was extremely disappointing to me. especially because I didn't find out until I got there at 7, after a hour train ride there. From an operational standpoint dropping the store to one employee running the shop on the weekdays seems dumb, how can you run an intro game ~and~ ring/help customers out at the same time? On a slightly related note, there's a rarely used ping pong table in the basement of my apt building and tons of space, so looks like my up coming free cash is going to be invested in table making and terrain.

Bill Lim said...

I have to echo John's statements here.

I am one of those Vets of the Oak Park GW store. I have been shopping there since it opened.

John hit the nail on the head when he mentioned the great staff, and their ability to cater to us veteran guys ala club night, and other events. Its not just about club night (though it does hurt seeing something we have all put effort in, get axed so to speak), but about overall mentality.

To me personally it seems that GW is looking to make their hobby centers more like their "Mall Stores". That is small spaces, that had maybe a demo table, and if you were lucky a couple extra tables, but no huge events, or clubs, or things of that nature.

I really feel for my friends at the shop (and those who were let go) this is gonna put major pressure on them to perform well...However with only one guy on the clock (during the week days at least) its gonna be hard to perform to the best of their abilities. You just can't "talk" to everyone who comes in, and keep up with your other "store duties" in my opinion.

It feels as though GW is saying "we don't care about the veterans", and personally I believe that is reflected in their new "events calender" in which they took out all of the "vet" activities. I'm sorry but "how to write an army list" isn't really an event that I think I need to attend. While I realize that GW-OP is a shop geared towards the beginner, they still managed to fit in a few Vet activities and events on their schedules. Now all of that is gone. If I'm not actively playing at the store, I see little reason why I should be spending my money there, other than convenience. This is not me lashing out at the employees, but rather looking at the situation objectively (I hope). I enjoyed the Oak Park store, its events, atmosphere, and employees. However I see little reason to continue to support a store that isn't giving me anything in return. In fact that store is telling me "hey we love you, but you should really be going out to our other location and spending your money there"...HUH? Well ok if you don't want my money guess I'll just go someplace else

*insert plug for http://www.thewarstore.com here*

I'm a huge for supporting the local store (Support your FLGS - Friendly Local Game Store), but one of the reasons to do that is to grow the local community. When the community is basically being told, sorry we can't cater to your interests (as veteran hobbyists) anymore, I see less reason to support my local shop. Heck I'll say it openly if it weren't for Anthony and Joe (and Billy) at the Oak Park GW, I'm not sure I would go there again...

Bottom line,
Will I continue to go to GW OP? Yes I will, but I won't be spending nearly as much time there as I was.

Will I go out to the Battle Bunker? I'm sure I'll go out there a couple of times, but I won't make it my "local store"

Will I be spending less money on hobbies because of these changes? Yep. Good Job GW...lets cut margins to increase profit...oh wait we just lost some...

Will my presence be missed (As far as Games Workshop as a whole is concerned)? Probably not, but who knows how many others there are like me.

Bill Lim

John@Plastic Legions said...

Nate- sorry I emailed you but you obviously didn't get it in time

Anon- I have some pals that play at Black Sun, they like it there but its too small and too far away to be optimal for our group (the bunker is closer for me) My basement has more tables than BSG.

Bill- I hear you bro but we will keep it happening!

Anonymous said...

Oddly enough, out here in the SF Bay Area, the large GW store in the Metreon in downtown SF closed down a couple of years ago. But across the bay along the 680 freeway there are two (2) GW retail shops fifteen minutes away from each other by car, in San Ramon and in Alamo. Tell me the logic behind that.

King Mob said...

My local GW is a mall location in the greater Los Angeles area, and I've seen firsthand how the staff cutbacks have affected things. The last time I went in, there was only one person staffing for the day (down from an easy 3-4 employees at any given time).

I had to wait fifteen minutes at the register while the staff member finished a demo.

Now, I have to say he was very apologetic about the whole thing, but the situation is kind of indicative of the GW mindset - focus on new players buying product, and leave the older loyal customers to fend for themselves. Because, of course, once someone is hooked on the games, they will still be buying their plastic crack for life, right?...uh, right?

I guess we'll just see about that.

Admiral Drax said...

For a company with such a niche and so 'dedicated' a consumer market, it's astounding what kind of decisions GW seem to make. If the community is nurtured with goodwill and open arms, the custom will follow.

Mind you, I've only been to a couple of stores in the Chicagoland area*, but a combination of that and stuff I pick up on blogs suggests that GW stores are far more 'generous' over there in the US than here in the UK now.

Looking back at old copies of WD from the nineties, there were always sales, special offers and coupons. I can remember always delving in the bargain bin at our Portsmouth store in the early 90s. Now? Nothing. The prices are always notching upwards with no breaks apart from the odd 'bundle' - if you spend over £150 in the first place!

I don't get why they'd throw their plastic-crack fans so few bones - it's like they want to actively discourage loyalty.

Humbug.

* My in-laws are in on the South Side and out in Naperville. I'll look some of these places up the next time I'm in town...

Anonymous said...

GW #158 in Northridge California closes at the end of March, with notice given on March 6th and the reason of high Mall rent/lease expired, with no plan to re-open. The Manager who was with the GW for 5 years fate is unknown at this time. Additionally, the Glendale CA store is on the chopping-block as the lease is rumored to be up in November.

Chris Tregenza said...

It sounds like GW in the US is about as effective as GW here in the UK.

I live and game in Nottingham, home of GW, and as a result I know lots of people who have worked for GW over the years.

With only one exception, every one of them has been sacked / made redundant. Generally as part of some mind boggling bad management decision.

And yet, GW are still here after 30+ years. Every time things get bad, they sack a load of stuff, refocus and start growing again.

Rysm said...

I recently played a few games of WHFB at the Battle Bunker in Glen Burnie Marlyland and the manager seemed really upbeat to me. He mentioned that several new GW stores are being opened up in the states as GW expands. He also mentioned that even if they promoted every employee of of GW retail staff in the states that there would still be manager positions open. I recently received a bullentin from GW concerning the opening of two new stores. Maybe they are just shaking things up and bringing the exposure up whilst dwindling some of the mega centers of the hobby to compensate? Just a thought.

P.S.-Your blog rocks! Keep up the good GW and hobby coverage.

Anonymous said...

O.K. guys and Gals, Let us start with Chris's comment, they do not sack re-focus and grow; they just grow because of us. Long term Gamers that will find a way to make these "wonderful" minis' because the G.W. product ...well really is mostly the best looking out there... hence the crack concept. YES, the Northridge and the Glendale stores on Southern California are closing; and yes with little notice and absolutely no regard to us the clients and especially to our beloved staff. They had been placed on notice and then formally told that their employment was being severed.
The Bunker is 50+ miles away from Northridge, and the farthest guys that lostr their store last year, Pac Vue, have to come 30 minutes longer to just find new friends and a new store and within a 6-8 month period they lost their second place to Game. We as a community have a direction and some cohesiveness, and are looking for a real retail store that will allow us to participate with the owners as we have had 6 years of watching G.W. commit Suicide on themselves in our region. The Los Angeles area is impossible to travel through for a casual afternoon at the Bunker. Early when there is no traffic and we have to wait till noon and late after 8 for traffic to let up.... How does anything work when the stores are doing fine except that they F'ed up by buying leases in big malls, for 80K per year in the first place? That is real Business sense gone wrong. Forget the economy, as you say, the addicted hobbyist will find a way but the comraderie, the afternoons spent together just painting or helping each other with a conversion and yes, let us not leave out the dedicated staff that we have well, routinely had to make new friends with but we did, just because they were always being changed up on us for trumped up reasons. Yea, there were the really wierd ones that did not fit the Red Book mold and good riddance but what about the kids that we watched grow into fine hobbyists over the last 6 years? Oh, and let us not forget the immortal words from Corporate Management, "What do they care if we close the store." I can answer that can you?

Chgowiz said...

I'm not a GW addict (yet, although the Great War WWI game is singing a siren call...) but I do go there from time to time for curiosity and for painting supplies for my D&D miniatures (and to buy LotR minis).

I was really surprised that there's a GW store in Gurnee and one in Vernon Hills. Considering that FLGS's that cater to a wide variety of gamers are closing faster and faster these days, I thought the northern Chicago area might be saturated with two GW stores - but you're right, they are "mall stores" where the experience is very retail versus what I find at my FLGSs.

FWIW, I know there are a bunch of miniatures gamers that go to Games Plus in Mt. Prospect. I don't know if that's convenient to any in your group, but Curt has been around a long time and he's a very welcoming sort - and he has nearly 1/4 of the store for GW related merchandise.

the other Kevin said...

Oddly, our inside the mall stores here in northern Virginia are closing in favor of strip malls. When I talked to one employee before the Potomac Mills store closed, they encouraged me to patron the FLGS.

Have to agree they're pushing aside the veteran hobbyist. I first came to see that when they stopped selling bits.

Real shame to see them not encourage building the community. To me, that's what the addiction is all about.

Benedictus said...

I'm sorry to hear about ur store guys. It's a real shame when GW are such big idiot to not think about which stores to close and which people really want. Luckily for me I live in the UK and there are at least 4 or 5 stores within an hours drive (the closest being about 10mins away). But hopefully post crunch theyll see the light and re-open ur store. Keep barking down GW neck about it!

Ben

Gerg said...

I worked for GW up until December. They closed my shop at the end of January. We were told, from corporate, to focus on new customers and people walking into the store for the first time. We were to politely disengage with veterans and go peddle plastic crack to the newbies. And they really encouraged us to jump around like monkeys.

The opinion from the higher ups is that veterans are hooked. They'll keep buying product. And they don't really care if you buy it online for 20% off. They still get paid. The current operating plan for the shops is to act as recruitment centers for new hobbyists then shuffle them off to Bunkers or Independents. That's why the focus has shifted away from veteran events.

As far as the layoffs. GW offers the best retail benefits package I've ever seen. The health insurance they offer is phenomenal. If they exceed their margin goals this year they'll be paying out the difference to share holders and employees. Unfortunately, one of the easiest ways to inflate those numbers is to let people go. So they are. And they're axing stores that don't quite fit the mold. If your store isn't in one of the major metros, i.e. you only have one or two shops in your city, and it hasn't been shut down, it will be. And they won't tell you. They'll try not to tell the staff until about 2 to 4 weeks out. The only reason we found out was because we couldn't hire someone to replace one of our guys who left. They had to tell us why.
As far a community goes, they don't care. GW thinks that all they have to do is provide the models and we'll take care of the rest. I don't think their right but there it is.

John@Plastic Legions said...

Thanks for that Gerg, Its more confirmation in line with what we are seeing and hearing. Can I ask where you were located? State, metro region?

Anonymous said...

GW focuses on the new hobbyist because frankly, they spend a lot more money then the vets, on average 300-1000 dollars in their first year. My General Manager (i own an independent retailer) worked for GW for 7 years managing a bunker for 2, one december he sold over 150 Battle for Macrags, no kidding.
GW has been over staffed for years, especially in middle to upper management, but they are killing themselves by cutting so many red shirts. It's silly to have 4 guys working on a tuesday night but i have heard stories of red shirts having to clear out their store so they can take their mandatory 45 minute lunch break as there is no one else working. I hope GW can find the happy balance between low payroll and excellent customer service. We have three employees plus my lazy but to help out every once in a while and manage to have at least two people on every day, three on Fri and Sat.
I would ask all those gamers out there to try to find a good independent retailer and support them as small businesses are the backbone of our country and you will be keeping those dollars local, i admit i am a little biased.

Anonymous said...

I spoke to the LA bunker manager-who transferred from another area, he stated that stores are being shut down because they didnt make the sales numbers-period. It doesnt matter how nice and friendly you are-if your numbers are not high enough-your store will be shut down.
now GW did open a new store in the OC, and I was told they were going to open 12 more-so if they close down 2 stores-well do the math.
new stores are to be 30mins away-fairly close to each other-and sending all "hooked" customers to the battle bunker for events, (which the LA battle bunker has increased in size). it does seem GW is trying to get more money from us crack users. They know we will buy their product-but like the Tobacco companies-they need fresh blood, once we are hooked-we still go back.
And it doesnt matter if you buy from them or from an online store-you still bought their overpriced product, so GW still wins in the end.

The Inner Geek said...

I don't play in tournaments, but I do have an opinion on why they have been shafted this year. Did anyone see the attendance at the Westminster Dog Show this year? WAY DOWN. These are people far more fanatical than GW Tourney players, in a sport that is popular enough to be televised, with serious money in it for the winners (indirectly from breeding fees etc.), and it still wasn't worth most contestants time to travel there and attend. I think the economy won't affect GW sales too harshly, but it might affect peoples ability to travel any significant distance for a tournament.

Gerg said...

I understand the focus on new gamers. I just disagree with the current strategy of throwing the veterans to the wind.
Also, does anyone else miss the summer campaigns?

Gerg said...

Also, as far as sales goals, that may apply in some of the other locations, but unless my store was supposed to pull down half a million per year, not hitting wasn't the reason they closed it.

Bill Lim said...

Gerg,
Man I miss those Summer campaigns. I wish I could say I was more involved in the couple that I had a chance to experience (I was mostly a new player at the time). Did that type of thing really require so many man hours of labor that GW couldn't support them?

They also had the neat effect of "advancing the story line" in an other wise static story. Well at least the Fantasy campaigns advanced the story...The 40K one (the last summer campaign to run) felt a little 1/2 assed...

Anonymous said...

"the other Kevin said...
Oddly, our inside the mall stores here in northern Virginia are closing in favor of strip malls. When I talked to one employee before the Potomac Mills store closed, they encouraged me to patron the FLGS."


This is why I can't, for the life of me, figure out why they're opening a store in Fair Oaks Mall. Especially since the Springfield store just moved out of the Mall (from what I hear, haven't seen it yet).

It's like they don't learn their lesson. Or they're opening stores they know will close just to get the initial foot traffic.

Anonymous said...

Is Ed Spetigue still working in the Chicago area for GW? I think he is responsible for most of the 'no vet' ideals. That's how he ran things in the MD/VA areas..

Perhaps he still hasn't figured the US out.

John@Plastic Legions said...

I do not believe so. our former manager is now a regional and his boss, whose name is escaping me at moment definitely is not Ed. perhaps he is still in the chain, its just if they aren't involved in the shops or events. I wouldn't have an opportunity to meet them. I'm sure several of the past/present GW employees who stop by here, may know.

Chicago Terrain Factory said...

Ed S. has been gone from the Chicago area for about 2 years now. When ever it was that GW folded the regional sales offices back into the national office.

I'm a bit surprised that Ed was behind the No Vets movement - he was always a strong supporter of clubs and events during his time in Chicago. Could be he was just carrying out direction from higher up. On the other hand, we was a bit unpredictable....

Anonymous said...

i dont know if anybody said this yet (i didnt check) but both stores near me were both closed in the same month and now i have to drive for 2 hours to get to the closest store which is now the la battle bunker

Anonymous said...

Re: Anonymous wondering why the Springfield, VA store moved from mall to strip mall, it's because everyone is bailing from Spr. Mall--it's being torn down in the not too distant future. The new location is a little bizarre in neighborhood, but it's well placed by a major highway.

My younger son is just starting to get into GW, so we're hoping to see the Fair Oaks Mall grand opening. Very revealing blog and comments here, though--good info for a non-GW mom like me.

Anonymous said...

I was talking to my local store (chicago bunker)about the new vet policies and once explained kinda made sense. It's not that they want to alienate us, but more so that we get up off our butts and do stuff ourselves. I know that the bunker is hosting several tournaments and a couple campaigns that are ran by just local clubs. I've seen some really cool stuff put on by the clubs lately. Also if you think about it doesn't not having an employee bombard you with veteran events every 2 minutes sound nice?

Anonymous said...

I was talking to my local store (chicago bunker)about the new vet policies and once explained kinda made sense. It's not that they want to alienate us, but more so that we get up off our butts and do stuff ourselves. I know that the bunker is hosting several tournaments and a couple campaigns that are ran by just local clubs. I've seen some really cool stuff put on by the clubs lately. Also if you think about it doesn't not having an employee bombard you with veteran events every 2 minutes sound nice?

 

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