Game Stop Corp. is instituting pay cuts amid the COVID-19 pandemic. It's also looking to open stores in select markets.
The videogame retailer said it has begun the process of re-opening stores in Italy, Germany, Austria and the states of South Carolina and Georgia and is preparing for the potential to re-open in other operating countries and states in the coming weeks. (GameStop, which operates approximately 5,500 stores across 14 countries, said a third of its U.S. stores remained closed but that two-thirds were open with curbside pickup service.)
GameStop also said that CEO George Sherman will take a temporary base salary reduction of 50% and that CFO Jim Bell and the remainder of the executive leadership team will take a 30% reduction. Beginning April 26, certain other employees across the company’s worldwide operating units will receive temporarily reduced pay of between 10% and 30%.
The company outlined additional actions it is taking in response to the COVID-19 pandemic.
o Offered certain of the company’s corporate support staff the option to either a temporary furlough or reduced workweek/reduced pay program.
o Reduced inventory receipts to match demand with a focus on key hardware, software and accessories products.
o Lowered capital spending to focus on mandatory maintenance or near-term high-value strategic projects.
o Due to the impact of governmental regulations and certain landlord decisions to close properties, the company did not make a portion of certain lease payments and remains in discussions with its landlords regarding ongoing rent payments, including potential abatement, deferral and or restructuring of future rents during this period of COVID-19 related closure.
GameStop’s comparable-store sales for the nine-week period ended April 4, 2020, fell approximately 23% on a year-over-year basis, which includes the impact of the majority of stores closed in most operating countries throughout the fiscal month of March.
“We continue to proactively manage our business with a goal to increase financial flexibility and preserve cash flow in the current environment,” said Sherman. “We believe our aggressive focus on expense, inventory and capital expenditure reductions will help preserve our financial health as we work to ensure readiness and ramp up operations as soon as conditions allow. The situation remains very fluid and a great deal of uncertainty remains, however, we entered into this time with a strong balance sheet and believe that we have sufficient cash and liquidity for the foreseeable future 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.”