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Wilhelmina International, Inc. Message Board

  • lavender_ace12 lavender_ace12 Sep 16, 2012 6:57 PM Flag

    New Perspective, Part 2 - Industry Analysis

    My last post ended saying “…AT BEST 33% OF GROSS BILLINGS ARE LEFT FOR OPERATIONS AND INVESTORS--MORE LIKELY ITS 20%-25%.” In a nutshell, I also pointed out that while sales are growing, receivables and payables seem to grow much faster while cash is always lean; and more than half of assets are always “Goodwill” or “Intangible”.

    The company is following what I call the “Old Model” trying to make money with the 20% model commission / 20% client commission (retaining $40 out of every $120 of revenues) formula, while trying to duke-it-out with the likes of Ford, Elite, IMG… As the financials and stock price show, this is a losing game. And folks, don’t think it’s any different at Wilhelmina’s major competitors.

    Management needs to get over the glory days, when three companies could dominate this industry. Like it or not, the Big 3 (Ford, Wilhelmina & Elite) spawned new competition from their former employees, and those agencies have spawned yet a further generation of competing agencies. You’ll never roll them all up again. Some have virtually zero overhead operating out of their own apartments, and some owners are okay losing money every year just for the pleasure of being in the industry. How does one compete with that?

    Going into sports management, artist management, entertainment and trying to consolidate scouting are the only ideas Wilhelmina’s management has seemingly had. It’s too little, too late! And don’t think getting in on the ground floor in emerging markets like China, India or Russia is going to help. They are already saturated too.

    My next post will present some real suggestions for change. This is coming from “ME”, just a dumb duff off of the curb. But I guarantee that the ideas are better than the so called professionals have had. Before signing off, the current (and prior) management deserve one last lambasting for selling you the investors a bill or goods. They are bleeding the cash out of this company for their own gain/lavish lifestyles, have had no new business ideas in the last 20 years and couldn’t care less if this sinking ship capsizes. Wilhelmina managers, SHAME ON YOU! SHAME! SHAME!

10.10+1.35(+15.47%)Oct 21 3:45 PMEDT