GameStop has announced that it plans to reopen some of its stores and cut executive salaries by up to 50%. GameStop CEO George Sherman describes how the previous few weeks, in which they closed shops and implemented curbside pickup, have been successful for the organization. “Since we closed stores to the public on March 22nd, 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.”

Now the company has begun the process of re-opening locations in Italy, Germany, Austria, and the states of South Carolina and Georgia, as well as potentially other areas in the coming weeks. Australia meanwhile has remained open throughout and has posted strong results with approximately 24% comparable store sale for the nine weeks ended April 4, 2020.

Sherman continued by stating that, to manage the business with the goal of increasing financial flexibility and to preserve cash flow, GameStop would implement “…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.”

These reductions break down as follows:

  • A temporary salary reduction of 50% for George Sherman, 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%. 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.

Overall, it looks as though everyone is taking a hit at GameStop. While anyone at the executive level will not likely see much change in their quality of life with these temporary salary reductions, those being offered a reduced pay program or temporary furlough may be in for a far more difficult time.

Considering that Sherman states that the performance of GameStop has remained close to its original targets, it is a bit surprising to hear of any sort of rush to reopen any physical locations in the midst of social distancing. We wish everyone working on the frontline of GameStop the best of luck in these times, and to stay safe amid these re-openings when most other business are still limited to essential services only.

Source: GameStop

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