At the end of May, 85 percent of the retailer's U.S. locations were open to limited customer access or curbside pickup.
In-store sales at retailer GameStop dropped 30 percent during the three months that ended May 2, a period during which the company closed all of its 3,500 U.S. locations due to the novel coronavirus pandemic.
But the Grapevine, Texas, company found a bright spot in its e-commerce business, where sales skyrocketed 519 percent year-over-year as more people turned to digital gaming during shelter-in-place orders. All told, GameStop had a net loss of nearly $166 million and net sales of $1.02 billion during its fiscal first quarter.
"During this unprecedented time, our priority is focused on ensuring the safety and well-being of our employees, customers and business partners as we continue the process of opening our stores as restrictions are lifted, in our ongoing effort to meet our customers’ needs," CEO George Sherman said in a statement. "We are proud of our team’s ability to quickly adapt to meet the increased demand for our product offerings."
GameStop temporarily closed all of its domestic stores on May 22, converting 65 percent of them to offer limited curbside pickup, as the coronavirus outbreak gained momentum in the U.S. For the final six weeks of the period, only 10 percent of the company’s global stores — those in Australia — remained open to the customers. Excluding stores that were closed due to coronavirus, GameStop in-store sales dropped 17 percent.
E-commerce, which is growing in popularity as a method for purchasing goods, drove the business during the period, with sales increased 1,000 percent during the six weeks following the closure of GameStop stores. “We believe this reflects the loyalty of the GameStop customer and the confidence they place in us as their preferred place to shop,” Sherman said.
GameStop said it is continuing to phase the opening of its stores where restrictions are lifted. At the end of May, 85 percent of its U.S. locations were open to limited customer access or curbside pickup and 90 percent of its international locations were open. The company closed — and later reopened — around 100 stores as protests over the death of George Floyd, an unarmed black man who pleaded for air as a white police officer pressed a knee into his neck, broke out across the nation. Approximately 35 of these stores will remain closed due to damage.
GameStop has addressed expected business headwinds due to coronavirus by cutting employee pay and furloughing some workers. Sherman took a 50 percent base salary reduction, while the remainder of the executive team took a 30 percent pay cut.
"As we begin the second quarter, we are cautiously and prudently navigating the near-term, as we are operating in the last few months of the current generation console cycle and believe we have experienced a pull forward in demand for end-of-life inventory given a surge in gaming product demand following the global stay-at-home orders," Sherman said. "That said, we believe the performance we achieved despite multiple headwinds is further evidence of the power of GameStop and the advantages that we possess driven by our global footprint, knowledgeable sales associates and strong loyalty base."
