On Wednesday, July 28th, GameStop Corp. announced that the Company plans to rebrand existing and future EB Games in Canada.

By the end of this year, EB Games’ Canadian locations and online store will assume the GameStop brand and name. The decision aligns with Ryan Cohen’s plans to revitalize retail.

GameStop claims the rebranding follows feedback from valued customers and stockholders.

GameStop’s News Release from July 28, 2021

GameStop’s Annual Report reveals that as of January 30th, 2021, GameStop has 253 locations in Canada, making up 15.58% of their international store base. 

GameStop Corp. has disposed of 46 brick-and-mortar EB Games locations in Canada in over a year, citing data from January 30th 2021.

On Sunday, GMEdd.com released a piece titled Ryan Cohen to Revitalize Retail, speculating that GameStop could use the stock market frenzy in January as the perfect consumer awareness campaign to rebrand international EBgames locations into GameStop stores.

The stock market phenomenon surrounding GameStop shares that shook financial markets in January 2021 can work as a groundwork for the perfect, free, consumer awareness campaign required to rebrand international stores, such as EBgames, into a cohesive GameStop identity. [GMEdd.com, July 25th 2021]

Source: GameStop News Release, GameStop Form 10-k

With GameStop opening their second fulfillment center under Ryan Cohen’s leadership in Reno, Nevada the gaming retailer’s plan seems strikingly familiar.

GameStop today announced the continued expansion of its North American fulfillment network and entry into a lease of a 530,000 square foot facility in Reno, Nevada, which is expected to be operational in 2022.

Positioning

GameStop states that a new presence in Reno, Nevada will position the company to grow product offerings and expedite shipping across the west coast. This expansion follows GameStop’s entry into a lease of a 700,000 square foot facility in York, Pennsylvania.

Chewy parallels

When Ryan Cohen was asked about fulfillment at Chewy during his TechCrunch interview in 2019, the founder discusses how his leap of faith started by the opening of a fulfillment center in Pennsylvania and then one in Reno, Nevada.

We hired a bunch of people who were experts in fulfillment and we flew to Mechanicsburg, Pa. to lease a 400,000-square-foot space, and within nine months or so, we became expert at doing fulfillment. It was risky. It was totally outside of our areas of competence. But by August of 2014, after breaking everything first, that center was humming along, and then we launched another in Reno. At that point, we went national. 

The Rise of Chewy to Prove the Core Value of Any E-commerce Product by Ally Nguyen states that a year after that first breakthrough in Pennsylvania, Cohen launched Chewy’s second building in Reno, Nevada, and that second time just seems like the one-hundredth already.

Sources: GameStop News Room, TechCrunch, Envzone

GameStop Corp. today announced that it has completed its previously announced “at-the-market” equity offering program.

GameStop disclosed on June 9, 2021 that it filed a prospectus supplement with the U.S. Securities and Exchange Commission to offer and sell up to a maximum of 5,000,000 shares of its common stock from time to time through the ATM Offering.

GameStop ultimately sold 5,000,000 shares of common stock and generated aggregate gross proceeds before commissions and offering expenses of approximately $1,126,000,000.

GameStop states that the company will use net proceeds from the ATM Offering for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet.

Source: GameStop Form 8-K, GameStop News Room

George Sherman, who was set to officially step down from his CEO role next month, has served as the Grapevine-based video game retailer’s chief executive since 2019.

GameStop Corp. today announced the appointment of Matt Furlong to the Company’s Board of Directors, effective immediately. The appointment date aligns with Mr. Furlong’s start date as GameStop’s new Chief Executive Officer.

Coinciding with Mr. Furlong’s appointment, George Sherman has retired from the Board. Five of the six members of the Board remain independent.

Furlong was named GameStop’s incoming CEO earlier this month at Q1 2021 Earnings. Furlong, a former Amazon executive, was hired as part of new chairman Ryan Cohen’s plan to expand e-commerce initiatives.

Sherman’s resignation from the board is effective immediately.

Source: GameStop News Room

Announced in addition to Quarter 1 earnings, GameStop Corp. intends to file with the U.S. Securities and Exchange Commission a prospectus supplement to the base prospectus included in the Company’s shelf registration statement on Form S-3 under which the Company may offer and sell up to 5 million shares of its common stock, from time to time, in “at-the-market” offerings.

The Company intends to use net proceeds for general corporate purposes as well as for investing in growth initiatives and maintaining a strong balance sheet. The timing and amount of any sales of shares, if any, will depend on a variety of factors, including prevailing market conditions, the trading price of shares and other factors as determined by GameStop Corp.

In the prospectus supplement, GameStop states that on June 8, 2021, the last reported sale price of common stock on the NYSE was $300.00 per share.

Our common stock has recently experienced extreme volatility in price and trading volume. From January 11, 2021 to June 8, 2021, the closing price of our common stock on the NYSE ranged from as low as $19.94 to as high as $347.51 and daily trading volume ranged from approximately 1,790,000 to 197,200,000 shares. 

Jefferies will be entitled to compensation at a commission rate of up to 1.5% of the gross sales price per share of common stock sold through it as sales agent pursuant to the Sales Agreement. 

Source: GameStop News Room, GameStop Investor Relations

Net Sales Grew 25% to $1.3 Billion

Appoints Technology Veterans Matt Furlong and Mike Recupero to CEO and CFO Positions, Respectively

GameStop Corp. (NYSE: GME), today reported results for the first quarter ended May 1, 2021.

First Quarter Fiscal 2021 Highlights

  • Net sales increased 25.1% to $1.277 billion, compared to $1.021 billion in the fiscal 2020 first quarter, overcoming a nearly 12% reduction in the Company’s global store base due to strategic de-densification efforts, and continued store closures across Europe due to the COVID-19 pandemic;
  • Gross margin was 25.9%, a decline of 180 basis points compared to the fiscal 2020 first quarter;
  • Reported selling, general and administrative expenses were $370.3 million, a decline of $16.2 million, or 4.2%, from $386.5 million in the fiscal 2020 first quarter. Adjusted for severance, transformation and other costs, selling, general and administrative expenses were $351.7 million, a decline of $29.5 million, or 7.7%, from $381.2 million in the fiscal 2020 first quarter;
  • Operating loss of ($40.8) million compared to ($108.0) million in the fiscal 2020 first quarter. Adjusted operating loss of ($21.6) million compared to ($98.8) million in the fiscal 2020 first quarter;
  • Net loss of ($66.8) million, or ($1.01) per diluted share as compared to net loss of ($165.7) million, or ($2.57) per diluted share, in the fiscal 2020 first quarter. Adjusted net loss of ($29.4) million or ($0.45) per diluted share, compared to adjusted net loss of ($157.6) million or ($2.44) per diluted share in the fiscal 2020 first quarter;
  • Adjusted EBITDA of ($0.7) million compared to ($75.5) million in the fiscal 2020 first quarter, and;
  • Income tax expense was $1.3 million compared to income tax expense of $50.4 million in the fiscal 2020 first quarter.  

Capital Structure and Liquidity Update

As of May 1, 2021, the Company had $770.8 million in cash and restricted cash, compared to $583.9 million in cash and restricted cash in the prior year. The Company had no borrowings under its asset-based revolving credit facility and no long-term debt.

On April 26, 2021, the Company announced it raised approximately $551.7 million in net proceeds through the issuance of 3.5 million shares of common stock under its “at-the-market” equity offering program, resulting in total shares outstanding of approximately 71.9 million. The Company has used and intends to continue using net proceeds to accelerate GameStop’s transformation as well as for general corporate purposes and further strengthening the balance sheet.

On April 30, 2021, the Company completed its voluntary early redemption of $216.4 million in principal amount of its 10.0% Senior Notes due 2023 on April 30, 2021. This voluntary early redemption covered the entire amount of the outstanding 10.0% Senior Notes, which represented all of the Company’s long-term debt.

Earnings Conference

GameStop has unveiled on their investor relations page that they will be livestreaming the Q1 2021 Earnings conference call webcast on YouTube.

This is highly unlike most other public companies, and may be a sign of GameStop paving the way to become more forward facing and shareholder-friendly with Ryan Cohen now serving as Chairman of the Board.

Source: GameStop News Room

Matt Furlong, Veteran E-Commerce Leader and Technology Industry Executive, Appointed CEO

Mike Recupero, Seasoned Technology Industry Finance Executive, Appointed CFO

GameStop Corp. today announced that it has appointed Matt Furlong as Chief Executive Officer and Mike Recupero as Chief Financial Officer. Mr. Furlong and Mr. Recupero join from Amazon, where they each held senior roles and oversaw various growth initiatives during their respective tenures. 

Matt Furlong, Incoming Ceo

Mr. Furlong is a veteran e-commerce leader with significant experience implementing growth strategies across global geographies and product categories. Most recently, he was a Country Leader and oversaw Amazon’s Australia business during a period of substantial growth. He was previously a Technical Advisor to the head of Amazon’s North America Consumer business. Throughout his nearly nine years at Amazon, he also ran a variety of product categories and oversaw strong market share expansion. Mr. Furlong began his career at Procter & Gamble, where he was an executive focused on brand, marketing and sales strategies.

Mike Recupero, Incoming CFO

Mr. Recupero is a seasoned technology industry finance executive, who spent more than 17 years at Amazon supporting growth across global geographies and product categories. He most recently served as Chief Financial Officer of the North American Consumer business after serving as Chief Financial Officer of Prime Video. He previously served as the Chief Financial Officer of the European Consumer business. He began his career at Amazon, holding Analyst, Manager and Director roles of increasing responsibility.   

Start Dates

These appointments reflect the refreshed Board’s focus on building a technology company and investing in growth. Mr. Furlong’s start date is June 21, 2021 and Mr. Recupero’s start date is July 12, 2021.

Source: GameStop Newsroom

At the conclusion of a highly volatile day for NYSE:GME, GameStop Corp. today announced that it will report first quarter fiscal 2021 earnings results after the market closes on Wednesday, June 9, 2021

investor conference call

The Company will host an investor conference call at 5:00 pm ET on the same day to review the company’s financial results. The call and any supplemental information can be accessed at GameStop Corp.’s investor relations home page at Investor.GameStop.com. The phone number for the investor conference call is 877-451-6152 and the confirmation code is 13720011. The conference call will be archived for two months on GameStop’s corporate website.

Annual Shareholders Meeting

GameStop has also confirmed that its Annual Shareholders Meeting is scheduled for Wednesday, June 9, 2021 at 625 Westport Parkway, Grapevine, Texas. The meeting, which is not open to the media and requires shareholders to provide proof of ownership and valid identification, is expected to take place at 11:00am ET and conclude at 11:15am ET. Chief Executive Officer and director George Sherman will attend the meeting in-person with the remainder of the Board of Directors attending virtually.

Source: GameStop Newsroom

The transformation begins.

GameStop will be putting their recently raised $551M to use, announcing a new fulfillment center on the east coast.

This will begin the expansion of GameStop’s North American fulfillment network through its entry into a lease of a 700,000 square foot fulfillment center in York, Pennsylvania. This facility is expected to be operational by the fourth quarter of 2021 and will support ecommerce and fulfillment needs. GameStop expects this fulfillment center in York, Pennsylvania will position the company to grow product offerings and expedite shipping across the east coast.

When Ryan Cohen was asked about fulfillment at Chewy during his TechCrunch interview in 2019, the founder discussed his opening of a fulfillment center in Pennsylvania, where, over the years, that warehouse has grown so much the company subsidized a Capital Area Transit bus route from Harrisburg and even opened a nearby recruiting office.

We hit an inflection point where three [third-party logistics companies] we were working with [were getting overwhelmed]. We’d give them weekly or monthly projections so they could plan ahead and have warehouse space, but they didn’t fully believe our growth and by the end of 2013, we had these 3PLs that couldn’t scale any more, so we had to bring fulfillment in-house.

We hired a bunch of people who were experts in fulfillment and we flew to Mechanicsburg, Pa. to lease a 400,000-square-foot space, and within nine months or so, we became expert at doing fulfillment. It was risky. It was totally outside of our areas of competence. But by August of 2014, after breaking everything first, that center was humming along, and then we launched another in Reno. At that point, we went national. 

More recently, in March 2021, Chewy announced another, new, Pennsylvania fulfillment center, and this one is located in York, same as GameStop. Chewy’s new facility is also similar in square footage, at about 732,000-square-feet.

The chewification of GameStop continues.

Sources: GameStop News Room, TechCrunch, PennLive

GameStop Corp. today announced that on April 30, 2021 it completed its voluntary early redemption of $216.4 million in principal amount of its 10.0% Senior Notes due 2023. This voluntary early redemption covered the entire amount of the outstanding 10% Senior Notes, which represented all of the Company’s long-term debt.

On April 13th, GMEdd reported that GameStop would be engaging in the early redemption of Senior notes, in order to eliminate long-term debt. 

If the $551M raised through the share offering was funding this early redemption, GameStop still has ~$335M of that capital to spend towards transformation efforts.

In GameStop’s Q4 2020 Form 10-K filed March 17th 2021, these 2023 Senior Notes were cited as a restriction to the company’s ability to take advantage of certain business opportunities, such as:

  • declare dividends, make payments or redeem or repurchase capital stock or make distributions in respect of capital stock;
  • make loans and certain investments;
  • sell assets;
  • engage in mergers, acquisitions and other business combinations.

With long-term debt eliminated, GameStop will be free to declare dividends, repurchase stock, make loans, sell assets, engage in mergers and acquisitions, and more.  This action enables the company to remain flexible while undergoing the transformation.

Source: GameStop News ReleaseForm 10-K