While in-store sales at GameStop locations have dropped by 30% during the period of time between February and early May of 2020, this was due to the Coronavirus pandemic. While many might think that this is yet another nail in the coffin of this particular store dedicated to all things gaming, there has been a silver lining. Despite 85% of all US GameStop locations having reduced their service approaches to limited access for customers if not curbside-only, the company has seen a 519% surge in its e-commerce division. At the end of the latest figures for the company’s first fiscal quarter, GameStop suffered a net loss of roughy $166 million yet garnered net sales of just over $1 billion.
George Sherman, CEO of GameStop, remarked that while this is an unprecedented time for many businesses, its top priority is the safety and health of everyone it deals with, whether they be customers who buy the product, employees who handle, market and upsell those products or the business partners that ensure GameStop has the best accessories and exclusives. He reiterated that this concern remains even as stores begin to reopen or have restrictions lifted. Sherman also commended employees’ ability to adjust to the situation as demand for PlayStation, Nintendo Switch and Xbox titles surges.
E-commerce, a sector that has only risen in popularity as a means of acquiring goods, both physical and digital, was responsible for the lion’s share of GameStop’s business. In total, e-commerce sales jumped 1,000% over the six-week period that GameStop had closed its stores. Sherman attributed this massive jump to customer loyalty and confidence, that people bought their games from GameStop because the company stood above the rest.
GameStop remains committed to phasing back into normal operations within its locations as restrictions continue to lift. By the end of may, 85% of all US locations were open in some capacity, while 90% of all international locations were also open. The company temporarily closed 100 stores during the immediate fallout of protests concerning George Floyd. Floyd was a defenseless black man who died while pleading for the ability to breathe properly as a white police officer kept him pinned to the ground with a knee to Floyd’s neck. 35% of those 100 stores will continue to be closed due to property damage caused during the protests.
GameStop has responded to anticipated business changed related to the virus pay cuts and furloughs. Sherman took a 50% cut of his base salary, with the company’s remaining family of executive team members taking a smaller reduction of 30%.
Sherman opined that the start of the second fiscal quarter will be one of prudence in the short-term while riding out the last vestiges of the lifespans of the current generation of gaming consoles. He added that there has been enough of a demand for games to play on current consoles due to so many stay-at-home orders that GameStop should survive for a good deal longer. Sherman closed his remarks by suggesting that all of the factors that have contributed to the brand’s position in the games market, like hiring and keeping games-knowledgeable employees and a loyal customer base, are the chief reasons why GameStop’s recent performance has been so strong.