GameStop Announces Re-Openings, Plans to Ride Out Pandemic
GameStop CEO George Sherman announced the retail chain will begin re-opening stores in select locations. GameStop's re-opening plan coincides with additional measures taken to help keep the company afloat in the coming months as well.
The news comes from an official press release on GameStop's newsroom page.
Sherman said currently, one-third of GameStop stores remain closed, while two-thirds have shifted to curbside pickup to comply with social distancing regulations. The company will begin re-opening in select locations, including Austria, Italy, Germany, and, in the U.S., South Carolina and Georgia. There are plans in place to re-open in other states and countries later on as well.
Despite the change in business model to cope with COVID-19, Sherman says damage to the company was minimal. He said:
...since we closed stores to the public on March 22, through omni-channel fulfillment, we have retained over 90% of our planned sales volumes in the two-thirds of our stores that are conducting curbside operations.
We believe this speaks to the strength of our enhanced omni-channel capabilities implemented in the fall of last year.
"Omni-channel" refers to GameStop's efforts to remain relevant in the game retail environment by providing unique experiences for consumers beyond just buying the latest games — efforts that also involved multiple layoffs.
Sherman continued by saying:
The situation remains very fluid and a great deal of uncertainty remains, however, we entered into this time with a strong balance sheet and... will continue to take all of the necessary steps to ensure GameStop remains a strong and vibrant company at the end of this crisis.
Some of those measures involve cuts for corporate employees and GameStop's board of directors (including the newly appointed Reggie Fils-Aime). The executive leadership team is temporarily taking a 50% cut to its salaries, while board members' cash compensation is being reduced also by 50%.
"Certain other employees" will be hit with reductions, including corporate support members, rent payments will be delayed, and GameStop will reduce both its inventory and long-term spending to focus more on near-term "high-value" projects.
In short, GameStop is focusing on directing resources and capital where it will do the most good. It's a surprisingly sensible move for a company that often invites ridicule over how it handles its business.
The full press release is over on the GameStop newsroom. Stay tuned to GameSkinny for more GameStop news as it develops.