GameStop has had a rough 2020, although it finally looks like they might have a serious chance to turn things around. The holiday problems are mostly behind them, what with all the shipping issues, and sales are looking good. The strength of the holiday sales comes mostly as total gross sales over the holiday were solid, although net sales were pretty bad.
Total comparable store sales increased 4.8% compared to last year, which is good, but that’s tampered down by the overall sales being low. Net sales during the period amounted to $1.770 billion, down 3.1% year on year. A lot of this was due to the decline in customer store traffic stemming from COVID-19, especially in the US. To show this, Australia/New Zealand increased nearly 31%, where the virus had been somewhat better contained in some areas for much of the year.
But all that is nothing compared to the monstrous growth in online sales. Ecommerce for the company exploded to a rate 309% higher than last year. Unsurprisingly, e-commerce sales contributed approximately 34% of the total for the period. In that same year-to-year period, GameStop made more than $1.35 billion from online sales.
On the report, shares for the gaming retailer rose a massive 12.7% on January 11. This rally has continued today, with prices hitting a trading high of 38.28 USD, setting a new 5-year high for the company. A lot of this excitement comes from the expectation of strong sales for XSX and PS5. The two new consoles are still very hard to find, and have driven many to stores in hopes of finding them. All that despite the ongoing pandemic is pretty crazy to see.
So with all of that to digest, GameStop is looking ahead in 2021 to expanding its expertise.
New Blood brings new life
A big part of the price rally for GameStop is based on an infusion of new blood at the executive level. Three new candidates will stand for election to three newly-created director seats on the board. Before the change, there were ten members on the board. However, four of the company’s existing directors have announced they are leaving the company and don’t intend to stand at the annual meeting. This means that after the three new appointments are confirmed, the board will be reduced to nine total members.
Alan Attal, Ryan Cohen and Jim Grube will join the board as directors to shore up the executive in the company. Cohen said in a statement that the new group “are excited to bring our customer-obsessed mindset and technology experience to GameStop and its strategic assets. We believe the Company can enhance stockholder value by expanding the ways in which it delights customers and by becoming the ultimate destination for gamers.”
Cohen co-founded online pet retailer Chewy and has years of experience growing online businesses. This knowledge will be invaluable as games retail continues to slide in terms of relevance for most consumers.