GRAPEVINE, Texas, Apr 21, 2020 (GLOBE NEWSWIRE via COMTEX) -- GameStop Corp. (NYSE: GME) today announced business updates related to the COVID-19 pandemic.
George Sherman, GameStop's Chief Executive Officer, said, "As we continue to navigate these unprecedented times, our priority has been and continues to be on the well-being of our employees, customers and business partners. I am very proud of the resilience that our teams are showing during this time. In very short order, we implemented a temporary curbside pick-up process at the majority of our U.S. stores in accordance with state and local ordinances. By using our omni-channel buy online pickup in store and ship from store capabilities, we are able to operate in a safe and regulatory compliant way while meeting the increased demand for our products as more consumers work, learn, and play from home. Importantly, 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."
Mr. Sherman continued, "We continue to proactively manage our business with a goal to increase financial flexibility and preserve cash flow in the current environment. Today, we announced salary reductions for our senior management team and board of directors, as well as wage rate reductions for some other corporate and field support staff. In addition, we have offered certain corporate and other support team members the option to work under either half-time/half-pay structure or a temporary furlough program. 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."
Mr. Sherman concluded, "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."
The Company is taking the following actions in response to the COVID-19 pandemic:
-- A temporary base salary reduction of 50% for George Sherman, Chief Executive Officer, 30% for Jim Bell, Chief Financial Officer and the remainder of the executive leadership team.
-- The Board of Directors has temporarily reduced cash compensation to directors by 50%.
-- Other actions include:
- -- Beginning April 26, certain other employees across the Company's worldwide operating units will receive temporarily reduced pay of between 10% and 30%.
-- Beginning April 26, certain other employees across the Company's worldwide operating units will receive temporarily reduced pay of between 10% and 30%.
-- Offered certain of the Company's corporate support staff the option to either a temporary furlough or reduced workweek / reduced pay program.
-- Reduced inventory receipts to match demand with a focus on key hardware, software and accessories products.
-- Lowered capital spending to focus on mandatory maintenance or near-term high value strategic projects.
-- 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.
The Company announced today the following updates to its global store operations:
-- Approximately one-third of U.S. stores locations remain closed, with two-thirds of stores closed to customers but available for curbside pick-up.
-- The Company 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.
-- All stores in Australia remain open for business with strong results continuing with approximately 24% comparable store sales for the nine weeks ended April 4, 2020.
The Company's comparable store sales for the nine-week period ended April 4, 2020, declined 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.
-- In the fiscal March period ended March 21, 2020, the date when the Company closed its stores to customer access, comparable U.S. store sales grew approximately 3% as the Company experienced a surge in demand across products that people need to work, learn or play from home.
-- For the five-week fiscal March period, Australia posted comparable store sales increase of approximately 64%.
As of April 4, 2020, the Company had approximately $772 million in total cash and liquidity ($706 million in cash and $66 million in availability on its revolver). The Company continues to expect it has sufficient liquidity and financial flexibility to navigate the current environment.
GRAPEVINE, Texas, Apr 21, 2020 (GLOBE NEWSWIRE via COMTEX) -- GameStop Corp. (NYSE: GME) today announced business updates related to the COVID-19 pandemic....