GameStop opening new distribution center to support e-commerce push
The GameStop facility is expected to be operational by the fourth quarter of 2021
In an effort to support GameStop's e-commerce transformation, the video game retailer announced on Monday that it will expand its North American fulfillment network by entering into a lease for a 700,000 square foot facility in York, Pennsylvania.
"This facility is expected to be operational by the fourth quarter of 2021 and will support e-commerce and fulfillment needs," the company said in a news release. "The Company expects its fulfillment center in York, Pennsylvania will position it to grow product offerings and expedite shipping across the east coast."
A GameStop spokesperson declined to comment further on the announcement.
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GameStop's push to e-commerce has been headed by incoming board chairman Ryan Cohen, the co-founder and former chief executive of online pet food company Chewy Inc, who joined GameStop's board in January and sits as the largest individual shareholder. RC Ventures, Cohen’s investment firm, has amassed an approximately 13% stake in the company.
In addition to growing its fulfillment network, Cohen has been cleaning house, with the departures of GameStop CEO George Sherman, chief financial officer Jim Bell, chief customer officer Frank Hamlin, and several of the company's board members.
GameStop has brought on a series of current and former Amazon employees to help with the transformation, including Elliott Wilke, who will serve as the company's chief growth officer, Jenna Owens, who will serve as chief operating officer, and Matt Francis, who will serve as the company's first chief technology officer.
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GameStop recently reported that its global e-commerce sales surged 175%, representing 34% of net sales in the fourth quarter of fiscal 2020. For the full year, global e-commerce sales increased 191%, representing nearly 30% of total net sales.
According to preliminary sales data released by GameStop last month, the company's global sales for the first nine weeks of fiscal 2021 increased approximately 11% year-over-year. February's total global sales were up 5.3% year-over-year for the four-week period ending February 27, 2021, while March sales increased approximately 18% year-over-year.
"During the first nine weeks of fiscal 2021, similar government mandated restrictions resulted in limited operations, primarily in Europe, and the Company operated with an approximately 13% decrease in the store base due to its strategic store optimization efforts," the company noted.
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GameStop stock soared to unprecedented levels earlier this year after a Reddit-fueled short squeeze targeting the company's short sellers.
Shares have given up some of their over-the-moon gains since the big runup in late January, but are still up more than 800% this year. GameStop stock closed at $162.20 per share at the end of Monday's trading session, down more than 6%.
The company also announced on Monday that it wiped out $216.4 million in long-term corporate debt that would have come due in 2023. The move has erased all of GameStop's long-term corporate debt from its balance sheet.