GameStop’s response to the COVID 19 has been a bit odd since the COVID 19 pandemic started. At one point the company tried to call itself an essential business to remain open despite orders for non-essential stores to close. However, now GameStop has chosen to take other actions of which some seem like good ones and others make you feel a bit wary. GameStop has confirmed that the CEO pay for George Sherman will be cut by 50%, while the executive team will have a reduction of 30%. The company has also said that certain employees globally will have temporary reductions by 10% to 30% though it is not clear who exactly is affected there. The company is also preparing to resume some store operations in Germany, Italy, Austria, South Carolina, and Georgia. GameStop has also not paid some of its leases so that will need to be rectified.
The main highlights can be seen below.
- 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 26th, 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.
Financially GameStop states it should be able to cope with the impact of COVID 19 stating it has $772 million in total cash and liquidity.