In a press release yesterday, GameStop announced that it is currently beginning the process of reopening a number of its stores. They are already beginning the process in countries like Italy, Germany, and Austria. They have also begun the process in the U.S. states of South Carolina and Georgia, two states which have stated their intent to reopen some businesses within the week. They also state that they are preparing for the potential to reopen additional stores in other countries and states in the coming weeks.
Despite some initial pushback by the company, GameStop officially closed its U.S. stores to customer access on March 21, 2020. While approximately a third of its stores were closed entirely, the remainder continued to service customers via curbside pickup. George Sherman, GameStop’s CEO, praised its “enhanced omni-channel capabilities” provided by its “buy online pickup in-store and ship from store capabilities” and how it had allowed them to maintain 90% or their original planned sales volume for those stores which were not closed.
The press release also mentioned that GameStop had not closed any stores in Australia at this time. In that time, those Australian stores have actually posted a “comparable store sales increase of approximately 64%.” This fits an upward trend in sales leading up to the March 21 closures in the U.S. as well. GameStop reported a 3% growth in the fiscal period leading up to the closures citing “surge in demand across products that people need to work, learn or play from home.”
In addition to announcing their plans to begin reopening stores, they also outlined a number of steps they are taking to ease their financial situation due to the closures:
- A short-term base salary reduction for the executive leadership team of 30%; George Sherman will have his salary reduced by 50%.
- The Board of Directors, which now includes Reggie Fils-Aimé, will see their cash compensation reduced by 50%.
- Additional, unspecified employees will have their pay reduced by 10% to 30%.
- Support staff will be provided the option of temporary furlough or reduced time/pay programs.
- Reduced inventory receipts and a focus on “key hardware, software and accessories.”
- A patchwork of leasing issues will need to be addressed in the coming weeks as they have been handled differently across all regions and landlords.
George Sherman ended his statement for the release with this, “The situation remains very fluid and a great deal of uncertainty remains, however, we […] will continue to take all of the necessary steps to ensure GameStop remains a strong and vibrant company at the end of this crisis.”
