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GameStop Corp. GME has been quite proactive about undertaking efforts to strengthen digital operations. With consumers’ growing inclination toward online shopping, the company has been evolving itself into a strong and digitally advanced player in the gaming industry. Progressing on these lines, the company announced plans to hire nearly 500 employees at its customer service center in Pembroke Pines, FL. Let’s take a closer look at this latest development as well as other efforts undertaken by the company.
Prudent Efforts to Boost Digital Presence
In its last earnings call, GameStop had informed about entering into a lease for a new customer care center in Pembroke Pines, as it continues to build on customer care operations in the United States. Investment to boost employee strength at this facility is likely to reinforce the company’s U.S.-based customer care operations. This newly-leased service center is expected to be operational by the end of 2021.
GameStop has been striving to build upon its digital capabilities, especially since the middle of last year when Ryan Cohen began taking interests in the company. RC Ventures, which is managed by Ryan Cohen, is one of the largest stakeholders of GameStop. Under the leadership of Ryan Cohen, the company has been undertaking radical digital transformation efforts. It has been restructuring its board and formed a Strategic Planning and Capital Allocation committee. Since the formation of this committee, the company has appointed several board executives with significant experience in e-commerce, customer care, technology, UI, UX, operations and supply chain.
Expanding fulfillment network and e-commerce services has been a vital part of the company’s transformation efforts. In July, 2021, the company entered into a lease for a 530,000-square feet facility in Reno, NV, which is expected to be in operation this year. Prior to this, the company entered into a lease for a 700,000-square feet facility in York, PA. The facility began shipping orders during the second quarter of fiscal 2021. Owing to these expansions, the company’s fulfillment network now spans across both coasts of Continental U.S.
The company’s strategic deal with Microsoft, to provide customers with enhanced digital solutions, is also noteworthy. GameStop utilizes Microsoft’s cloud solutions and hardware products to upgrade its business operations. Apart from this, it is strengthening omni-channel operations through the roll-out of same-day delivery services and several flexible payment options. To further boost consumers’ shopping experience, the company has enhanced search and navigation along with post-purchase features. GameStop is also striving to expand its product catalog by adding new products and leading brands across electronics, collectibles, toys and more. The company has been focusing on expanding and redesigning PowerUp Rewards loyalty program and improving engagement with vendors and partners.
In order to support business transformation, GameStop completed the sale of 5-million shares of its common stock through its at-the-market equity offering program (the “ATM Offering”). It generated aggregate gross proceeds before commissions and offering expenses of approximately $1.13 billion. Prior to this, the company completed the sale of 3.5 million shares of its common stock through the ATM Offering and generated collective gross proceeds of nearly $551 million. The company has been using the proceeds for accelerating growth efforts as well as for general corporate purposes and strengthening the balance sheet. As a result of the ATM Offering, the company now has total shares outstanding of approximately 75.9 million.
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GameStop’s efforts to turnaround its business operations are encouraging. Investors have been keeping a close watch on the transformation efforts undertaken by the company’s restructured board.
Caught in the meme frenzy earlier this year, shares of this Zacks Rank #3 (Hold) company have surged 920.2% in the year-to-date period compared with the industry’s rise of 41.4%.
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