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Watch the gmedd RC intyview and this line resonated with me, roughly he said
“We made the unit economics of selling 30lb bags of dog food work. We sold through inventory faster than our payment terms which unlocked our growth”
Aka. If you can sell things faster than your need for captial to invest in more inventory you’re in a really strong place.
In this situation - the bull case is we’re selling inventory faster than the need to store it long term.
Make the unit economics work and the business will be profitable.
This needs to be higher up. With stores sending out the deliveries, there is no need to have warehouses. This is long term cost cutting and long term growth. If Amazon had brick and mortar stores, they would have less warehouses since people can go in person to get there things and also the store itself could make the delivery (same day). The big up that GS has on AMZ is that they don't sell everything under the sun, its a niche company, meaning less inventory and easy deliveries locally when a store has that item in shop. If not, then the next closes store will ship it, if not that, the small amount of small costing warehouse will ship it. Chewy was similar.
Literally this.
I saw this news and immediately thought, oh they’re laser focussed on squeezing every cent of profitability out of every sale.
That mentality is everything I want as an investor.
To me these warehouses always seemed like a hub for moving and rearranging the US stock, hell it even says "to Support Transformation" in the headline. I imagine they've relocated most by now and plan to use the stores as hubs within the network going forward.
Yes, this is why I see a lot of FUD on a certain related subreddit by employees and others complaining about all the inventory in stores. Also, if people choose to go in-store for pick-up then they may just see something else they want and get it. Nearly every delivery phone application in China that is run by the store itself has two prominant features displayed, store-pick up or delivery. And now that I think about it, two main companies I see making that work here the best are SamsClub and McDonalds, go figure.
That was my post and I 100% believe GameStop looked into leasing that space and ultimately kept it. And now this. There is no doubt GameStop listed some of that Grapevine footage for a potential sublease. We have dates they posted it. But they took it down themselves and it’s no longer listed.
And now this news drop. It’s all bullish. And my post was just “interesting” and not fud. You have to REALLY REALLY dig to find out what GameStop is up to.
Fair enough man! What have you found that they are up to thats bullish? Besides the cost cutting measures (which short term is good but not necessarily good long term). Are they cooking up any new revenue streams?
That was someone else. The timing of when that sublease offering was retracted, apparently around September 2023, would be consistent with a decision being made back then to keep Grapevine TX and close York, PA.
That was someone else. The timing of when that sublease offering was retracted, apparently around September 2023, would be consistent with a decision being made back then to keep Grapevine TX and close York, PA.
Could explain the sale of %10 off $250 if you pick up in store. I initially assumed it was a goal of encouraging foot traffic but it could be more than just that and hoping to get rid of warehouse requirements.
Yes.
The Nevada one never opened. They closed down the Kentucky one last year. Now it's just Texas.
Gamestop actively has fewer distribution centers than before RC took over.
Yessir, op wrote in the article when the lease was signed, you can find posts in this sub if you google "gme, reddit, distribution center" one as recent as 6 months ago talking about the York, PA fulfillment center but also a lot when it first opened
Real question is why do they need this? If this is bearish why? If you don't need inventory space, why is it a bad thing? If GME is utilizing quick turnover items that sell well, why's keeping warehouses you don't need taking up a lot of cash flow a good thing?
GME had like $1b in inventory, didn’t they? I think it was hypothesized that GME stocked up because of the supply chain issues. Perhaps we needed the warehouse for that?
I can try the bear case - this was the expansion beyond brick and mortar to take market share from Amazon for the niche gaming products on the east coast. This would mean GME will see less growth but enable more cost cutting.
Not really bearish if they weren’t drumming up the e-commerce volumes to justify the additional overhead.
What volumes on E-comm? This facility in general was done before RC had a say IIRC. How's letting it go when they don't need the space a bad thing?
I agree not everything is Bullish, but in regards to the things happening since last year, I think they are. Prior to that, their foray into NFTs was too late and a bad move IMO, but closing it knowing it was a bad move and that the market is not ready is bullish. Same for inventory space. Needing that space for Supply Chain reasons makes sense as does getting rid of it if you don't.
I think the Bears have no case other than shrinking revenues, of which is driven by store closures as they right size and figure out waht foot print makes the most sense for them. Even then, that Bear case is paper thin IMO, which should be shown in March.
Realisitically the only thing they screwed up on was releasing a Beta-NFT market place during a crypto winter which didn't cost that much in the grand scheme of things.
Was referring to the Amazonification of GME to be a tech company with deep roots in e-commerce. Again I gave the bear case but it’s real thin. I don’t see it as bearish other than they are cutting growth opportunities but RCs strategy right now appears to be cuts to improve margins - which is a good thing.
You can tell from the fact they are closing it going an Amazon route is not working. That makes sense if you ever worked at Amazon. Amazon can do things their way because it's THEM. I can see why Furlong is gone now. He didn't do a thing with the marketplace, overbought bad inventory and space, never pushed the proper channels to market GameStop properly while doing so and in the end what did this do for customers?
>This facility in general was done before RC had a say IIRC. How's letting it go when they don't need the space a bad thing?
The press releases imply that the York facility was a result of changes driven by Ryan Cohen.
RC and two handpicked directors were added to board January 11, 2021. It was announced that the intention was for RC to become chairman at the June 2021 annual meeting.
On Feb 23 GameStop announced the resignation of the CFO and a "Succession Plan to Support Transformation".
On March 8, 2021 Gamestop announced that RC was chairman of a 3 person committee called the New Strategy Committee" "to identify initiatives that can further accelerate the Company’s transformation. The Committee is comprised of Alan Attal, Ryan Cohen, and Kurt Wolf, with Mr. Cohen serving as Chairperson”. Alan Attal was one of the two directors chosen by RC to join the board with him in January. The press release listed a series of personnel changes goes already imo,emended after the formation of the committee. https://investor.gamestop.com/news-releases/news-release-details/gamestop-provides-corporate-governance-update
The leasing of the York facility was announced the following month, so it appears to be part of the transformation spearheaded by Ryan Cohen.
It is part of the continuing cost cutting measures that have reversed most initiatives started in 2021.
These cost cutting measures have brought the company to the brink of profitability, even though revenues have declined.
Cost cutting measure are bullish in the short term, but if too deep are bearish in the long term.
RC opens distribution center 2 years ago = omg this guys a genius, competing with Amazon, gme is the future.
RC closes the exact same distribution center he opened = omg this guys a genius, gme is doing so well they don't even need more distribution centers
Good question tho, why did they need this and waste time and money with it? Very good question for RC for sure
GameStop leased the space, they didn't build a new facility or outright purchase the property.
A lease implies short term use, just like leasing a car.
Without additional context, there's no ability to say it's good or bad. Any attempt to do so is 110% speculation.
Shrug. Closing centers isn't bad in and of itself. Short term= positive, long term= neutral to negative. It's certainly quite interesting to see a lot of closures since 2021. Not saying going to speculate and tote MOASSS. We need positive news and struggle to get it. I'm sure RC is very aware of the state of things, and if GME goes the GMERICA= BRK.A.2.0 then so be it.
As and apevestor I am ok with that. I have money in GME that I can afford to lose, something we talked a lot about in 2021 during the DD times. So, if GME goes bust, ok, we fought a good fight! If it turns into BRK2.0 awesome yay us! If it turns into a meh IEP company that's so so, sure thing. For me the journey is what makes this fun and the fact that Wall St. hates RC and us.
I think one thing people forgot is that we have power over them. If we still want a MOASS we could get one, it's really on us.
I respect your reply being more civil!
RC didn’t have full control when those decisions were made, they were still implementing the BCG plan at that point I believe. Yes, he was part of the board but he was not the chairman yet. And yes people here are bullish on anything RC or GME haha. See comments above now on cost cutting benefits/more inventory in stores now. I am waiting to see the next earnings report before I make any bullish vs. bearish claims here.
Commercial real estate ape here, if I may weigh in.
Not necessarily the case for all forms of commercial real estate. Offices in Manhattan are super fucked. Industrial real estate (warehouses, factories, etc) has continued to retain and appreciate value. It's one of those things that's impossible to do from home. Warehouse lease rates for something like the York, PA center would have gone up in the 2-3 years from the initial lease.
I think this is more about what the other posters in the thread have said: that gamestop is moving towards using the existing stores as warehouses and distribution centers rather than giant centralized models of distribution. I think the York, PA center probably got them through the last 2 holiday seasons and they're ready to go forward without it.
I trust RC to make moves. We don't know the full story till we do.
Since the WARN posting on the PA state website says the closure is March 15- Sept 30th I suspect the lease expires 9/30/2024.
The notices handed to employees on MLK day said that operations were to cease on 3/15 and terminations were in the 14 day period afterwards. No severance or placement benefits. No payment for vacation or PTO.
https://ibb.co/S7xN5Z1
https://ibb.co/VjXMKKG
>No payment for vacation or PTO.
That part is kinda fucked, BUT it's advance notice, so like, take all the PTO you have left or lose it. The shitty part would be if they couldn't support everyone going on PTO to burn it.
Not too fucked. Apes need to realize if they want to get paid someone else has to lose. Unless apes start telling the board to nft dividend instead of screwing lowly employees.
I know all the morally superior redditors will downvote me to hell but it would be a poor business decision to give severance pay to unskilled labor. People with positions that require degrees often don’t even receive any severance packages after being laid off. It’s practically throwing money away
It doesn't always have to be business. Especially when your decisions fucks up the lives of people. I don't want to live in this world because all it's based off of are business decisions and look what that's led too.
Sorry to break it to YOU but your idea of success has been horribly perverted. I hope you learn some day that businesses can't make money off of people if people don't support them. Or if people have no money.
Let's also not forget, the board members aren't the ones who packed and shipped all those orders. Hell they didn't even have a hand in picking the people that run the place and make those decisions. But I'm sire they'll still get bonuses this year and most likely in sums larger than those workers salaries combined.
From some of my packages I've received from GameStop in the past year, I think they may be utilizing local stores as part of their fulfillment chain.
If this is true, it could explain why they would become less reliant on large centralized warehousing. (Personally, I think it is true, because of their fast delivery turn around time.)
In that case, this would be an amazingly powerful way to leverage their retail space and reduce their expense costs.
Well, you can handle the down votes but your basic logic indicates that you think there is nothing fraudulent to the GameStop price. If people have DRS’ed shares and have locked up at least 25% of the float at this point, there should be absolutely nothing but severe difficulty finding shares to short, but somehow they keep materializing
I don’t care what you tell me about market makers and liquidity, but that’s illegal and manipulation, particularly when the other side of your company is holding a massive short position
It was in a much worse state Jan 21 and squeezed, then they turned off the buy button. All they’ve done since then it cut costs and improve margins but somehow now it can’t squeeze?
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I appreciate this post. We want the good, the bad, and the ugly or else it all just becomes an echo chamber and any difference of opinion is cast out.
The NFT marketplace/wallet not panning out was a big disappointment for me personally because I see the value in owning your own game/skin/gun/etc and being able to share the profit off the effort it took to obtain it.
Still waiting to see what becomes of Playr. Can it be Steam for Web 3.0? We will see.
End of the day some stuff works, some doesn’t, but the smart business/ leaders can admit mistakes and move in a new direction.
Seems like hitting the full-year profitability goal is a hinge point for something else at play.
The aggressive pivot towards profitability always felt...off. So too did RC's email when he joined as CEO. It made me feel like I was reading GameStop's financial position totally wrong, that things were way more dire than what had been chanted on this sub.
It all boils down to what the board is seeing/forecasting.
My dream scenario is that they're doing this because it's been arranged with an outside investor. Maybe someone told them back in 2022, "if you manage to reach full-year profitability by this benchmark, I'll buy in huge."
I'd be very surprised, but it honestly seems like we're gussying up to be acquired by someone.
The board very wisely already got the huge buy-in back in mid-2021.
3.5M shares sold in April 2021 for $551M ($157/share). It was done as ATM offering, so many shares were purchased by apes. Big investors were not needed. https://investor.gamestop.com/news-releases/news-release-details/gamestop-completes-market-equity-offering-program
Then another offering of 5M shares for $1.126B in June 2021 (average price of $225/share.).
So a total of 8.5M shares issued and sold for $1.677B (average $197/share, or $49/share split adjusted).
That $1.677B very wisely raised in the first half of 2021 is what has funded the losses of the last 2-1/2 years.
That has also funded the many initiatives started by RC in 2021.
I think what he's getting at is we have over billion in cash, over a billion in inventory, and no debt. We don't need another big investor, especially not one who would be dumb enough to put pressure for short-term profitability over long term success. We already got our cash injection. Apes directly own at least 25% of the company now. Cash, inventory, long holding investors, no debt, improving profitability despite being in a Depression. We have stopped all the bleeding and at this point have enough cash to survive decades of only staying consistent. There is definitely no "dire situation".
If that really is the case and there is no direness, then it directly contradicts the tone of the RC letter upon becoming CEO, as well as the cuts made to employee benefits. Plus, I don't know what you're reading, but in the narrow realm of retail spending, we're definitely NOT in a depression.
Don't get me wrong - I applaud the philosophy of pushing the company to be more robust financially. It's the ferocity of the pivot from investment to cost-cutting that knocked me sideways. It struck me as odd then, and the web3 abandonment just adds more fuel to my speculation.
At this point, I'm thinking Q4 will be a pivotal gauge for me. If GameStop manages to post a profitable year, which would be fabulous, I'm going to have a tough time if there's no color given to our "what's next?" strategy - especially with regard to revenue shrinkage.
There is some direness, they have a long road to climb to become consistently profitable. The point is that your post posits that recent maneuvers by the company imply preparation for a buyout, but that belies many other facts of the company's financial position and past moves that make a buyout extremely unlikely in the near term.
A big part of their plan was NFTs, unfortunately the FTX debacle completely tanked the NFT marketplace for the foreseeable future, so they are taking measures to remain profitable despite their huge gamble in NFTs basically being a complete failure.
They've stated on record that they have made the changes necessary to put them in a better position to become profitable, now they need to show that via actual profit. I believe they can do so in Q423 and hopefully results will be good enough to make 2023 a profitable year.
Of course they want to be profitable, but not so that they get acquired. You get acquired when you are NOT profitable. Also, a would-be big time investor would want to buy *before* they are profitable when they can pay orders of magnitude less for their acquisition.
I don't see something like that being RC Ventures' wheelhouse. Even if that were the case, then I don't think it would necessitate the extreme pivot towards profitability.
Anyone else receive the wrong item that may have been picked in a warehouse by someone who is "just doing a job"?
fulfillment thru stores by employees who want to work in the gaming space is a win in my eyes.
I purchased a wall mount lunar phase light for like $25 and received a pair of $125 wireless gaming headphones. Win on my part but loss for the company ( I did correct the situation, check my posts) but if this happens a lot then losses pile up thru negligence.
Someone posted a rumor a month ago that they signed a different lease in Harrisburg.. I wonder if that was true and they found better terms.. OR this is something else.
tl; drs
e: looks like 155 employee terminations IF they leased somewhere else ~27mi away; they might have placed the old staff, or tried to - seems they didnt, this needs explanation I feel, this affects ecommerce..
My understanding is that the Reno distribution center announced in July 2021 is no longer in operation (not sure it ever really opened). And Shepherdsville, KY facility that replaced the Louisville warehouse was shut down this time last year.
So Grapevine, TX will be the only distribution and fulfillment center now. Since these warehouses were announced Gamestop has pivoted to ship-from-store, where the fulfillment of e-commerce orders is down at the retail store level.
Edit to add: The 500 person call center in Pembroke Pines, FL announced in 2nd half 2021 has also been closed. You can find all of the press releases about the expansion plans at https://investor.gamestop.com/newsroom
None of the closures were announced so it is harder to track them down.
This lease preceded Furlong. It was after RC became head of the "Strategy Committee" on March 8.
https://investor.gamestop.com/news-releases/news-release-details/gamestop-provides-corporate-governance-update
> GRAPEVINE, Texas, March 08, 2021 (GLOBE NEWSWIRE) -- GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today announced that its Board of Directors (the “Board”) has formed a Strategic Planning and Capital Allocation Committee (the “Committee”) to identify initiatives that can further accelerate the Company’s transformation. The Committee is comprised of Alan Attal, Ryan Cohen, and Kurt Wolf, with Mr. Cohen serving as Chairperson. Since the Committee’s formation, the Company has taken steps that include:
Alan Attal was one of the two directors that RC picked to join the board with him on Jan 11, 2021.
Maybe it wasn't espionage. Maybe furlong wasn't great and amazon runs itself. AWS is their money maker anyways. Or maybe a really good plant. Nobody knows truly.
Most of the digital transformation program was started before Furlong was hired.
His hiring, as well as the hiring of several others were part of the digital transformation program headed by RC in the first half of 2021.
https://investor.gamestop.com/news-releases/news-release-details/gamestop-announces-additional-board-refreshment-accelerate
It is interesting to look back at the flurry of press releases in first half of 2021 as RC took over Gamestop.
https://investor.gamestop.com/newsroom?page=7
https://investor.gamestop.com/newsroom?page=6
https://investor.gamestop.com/newsroom?page=5
https://investor.gamestop.com/newsroom?page=4
All of those press releases were very bullish at the time. I remember being hyped. He was moving fast and seemed to have a plan.
All of the energy from 2021 is completely missing from Gamestop and most notably RC. In so many ways, the share price reflects that.
Berkshire Hathaway closed its textile business too. Maybe this is the beginning of the pivot into a more liquid, holding-style company with fewer tangible overheads.
Maybe RCs long term plan was to acquire Buy Buy Baby and when that didn’t materialize, there was no reason for the warehouse. Just my smooth brain speculation.
Average salary for warehouse worker in Pennsylvania is 16.24 an hour ~34k according to indeed and a range of 32k to 39k according to salary dot com.
So on payroll alone we're saving ~5-6 million a year, more on HR, lease etc.
Profitability imminent
Depends on if the warehouse was making money. Cutting costs by labor when the building generates isn’t the best press. Fire everyone cost savings galore. Pretty shifty mentality, these are average joes.
Warehouses dont make money, they cost money. It's a necessary cost of fulfillment but if that cost can be reduced by optimizing inventory turnover and shifting the burden of delivery to stores while also getting quicker delivery times then why not do it?
Thats different. 3PL is a service. GameStop sells apples directly to customers through their retail stores supplied by a warehouse they manage. Your warehouse manages the logistics of apples that are owned by other companies and those companies pay your warehouse for the service.
Yeah I love rc firing more and more employees and closing down stores and warehouses, doing great things for the balance sheets. Here's to hoping more people get fired and we're positive for the year!
You're trying to be flippant but it just makes you sound immature and not very business savvy.
I'll take RC's track record of building and investing over your hyperbole anyday.
I absolutely love how Ryan Cohen has been leading them to make certain key decisions for the past years.
Like adopting regulations and positioning themselves in the derivatives market which generally just insures they dig themselves deeper into the mess of lies they have been trying to create to shake investors.
Closing the distribution center shows that dynamic strategy. It's a shame the rich and powerful don't use their power to actually make this world a better place... It's time for a change.
I've been waiting my whole life for this.
This seems to be inline with their strategy of relying on 3rd party for distribution. Here is an article that was published in January 2023 on closure of Kentucky Distribution Center.
[https://www.costar.com/article/2126390201/gamestop-gets-ready-to-close-one-of-its-us-distribution-hubs](https://www.costar.com/article/2126390201/gamestop-gets-ready-to-close-one-of-its-us-distribution-hubs)
So why is this being discussed as a big change.. Gamestop is not turning off E-Commerce, they are optmizing costs of supporting E-Commerce.
I do not think that Gamestop ever engaged 3rd party distribution services.
Gamestop has pivoted to using retail stores for fulfillment of online orders.
I do not see this, by itself, as a big change, but if you look back at the many initiatives and personnel changes announced in 2021 you will find that almost every single one has been reversed.
Shepherdsville, Reno, and York distribution and fulfillment center have all been closed. The 500 person call center announced for Pembroke Pines, FL has been closed.
The Immutable and FTX collaborations appear to have ended. NFT marketplace and the wallet are dead.
It is harder to determine the result of all of the personnel announcements that had press release issued in 2021, but it appears that almost all of those people are no longer at Gamestop.
Individually none of these are a big deal. Cumulatively they make me wonder about the quality of management.
Look for yourself at the flurry of press releases in 2021 and then look at the current status for each one:
https://investor.gamestop.com/newsroom?page=4
https://investor.gamestop.com/newsroom?page=5
and continue back to the January 11, 2021 announcement that RC and two people of his choosing are being added to the board, then in March it was announced that he headed up a committee to revamp the company and drive its transformation. And there were many press releases about changes in key positions and new positions related to the transformation being created.
But what about the workers? People losing their jobs and their livelihood has to be a bad thing right? Like everyone here is saying GME has good fundamentals for long term investment besides MOREASS, and that cutting the “waste” is a good thing for profit. But can we at least admit that closing stores and warehouses is bad/wrong ethically here?
And yes I know other companies are also “closing” departments and letting people go, but that’s not ethically right either.
Cost cutting is the reason that Gamestop will likely report a profit for 2023.
Cost cutting is bullish in the short term.
To the extent that these cost cutting measures hurt future growth they are bearish, as is the fact that almost every initiative started by the new team in 2021 has been canceled and reversed.
>On Monday I reported
You posted an unsubstantiated claim. Something quite a lot of people do.
>That was removed because it was speculative.
If you had evidence at the time then it wouldn't have been removed.
RC keeps his plans secret, so both potential competitors and shareholders are left in the dark.
All we know is that the many plans announced in 2021 after Ryan Cohen took control and started setting strategy have been reversed.
So the company has reset to condition before January 2021, but with the closing of the worst performing stores and revised software for running the company more efficiently (the SAP conversion).
I would imagine the cost to run a business in TX vs NY is more favorable in Texas. Texas offers great tax incentives to new and expanding business. Also no state income tax in TX as well.
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Watch the gmedd RC intyview and this line resonated with me, roughly he said “We made the unit economics of selling 30lb bags of dog food work. We sold through inventory faster than our payment terms which unlocked our growth” Aka. If you can sell things faster than your need for captial to invest in more inventory you’re in a really strong place. In this situation - the bull case is we’re selling inventory faster than the need to store it long term. Make the unit economics work and the business will be profitable.
This needs to be higher up. With stores sending out the deliveries, there is no need to have warehouses. This is long term cost cutting and long term growth. If Amazon had brick and mortar stores, they would have less warehouses since people can go in person to get there things and also the store itself could make the delivery (same day). The big up that GS has on AMZ is that they don't sell everything under the sun, its a niche company, meaning less inventory and easy deliveries locally when a store has that item in shop. If not, then the next closes store will ship it, if not that, the small amount of small costing warehouse will ship it. Chewy was similar.
Literally this. I saw this news and immediately thought, oh they’re laser focussed on squeezing every cent of profitability out of every sale. That mentality is everything I want as an investor.
Indeed, and it’s not just about profitability. Reducing unnecessary inventory frees up the businesses’ working capital for reinvestment and growth.
To me these warehouses always seemed like a hub for moving and rearranging the US stock, hell it even says "to Support Transformation" in the headline. I imagine they've relocated most by now and plan to use the stores as hubs within the network going forward.
The understaffed stores whose employees benefits they keep cutting?
Do you have more proof than an marketwatch report?
Yes, this is why I see a lot of FUD on a certain related subreddit by employees and others complaining about all the inventory in stores. Also, if people choose to go in-store for pick-up then they may just see something else they want and get it. Nearly every delivery phone application in China that is run by the store itself has two prominant features displayed, store-pick up or delivery. And now that I think about it, two main companies I see making that work here the best are SamsClub and McDonalds, go figure.
When you put it like that I like it
Hope so cause all that's left is grapevine ...
and im pretty sure on OPs last post there was a link to GME trying to lease out like 80% of the floorspace there too. Are these good signs? Why?
That was my post and I 100% believe GameStop looked into leasing that space and ultimately kept it. And now this. There is no doubt GameStop listed some of that Grapevine footage for a potential sublease. We have dates they posted it. But they took it down themselves and it’s no longer listed. And now this news drop. It’s all bullish. And my post was just “interesting” and not fud. You have to REALLY REALLY dig to find out what GameStop is up to.
Fair enough man! What have you found that they are up to thats bullish? Besides the cost cutting measures (which short term is good but not necessarily good long term). Are they cooking up any new revenue streams?
and im pretty sure on OPs last post there was a link to GME trying to lease out like 80% of the floorspace there too. Are these good signs? Why?
That was someone else. The timing of when that sublease offering was retracted, apparently around September 2023, would be consistent with a decision being made back then to keep Grapevine TX and close York, PA.
That was someone else. The timing of when that sublease offering was retracted, apparently around September 2023, would be consistent with a decision being made back then to keep Grapevine TX and close York, PA.
Is there an echo in here?
Is there an echo in here?
Ah I see, thanks for that. Btw I never meant you posted it, just that somewhere on your last post there was someone who posted a link
That was me. You are correct. The timelines are perfectly in sync.
Please sir, be my wife's bf!
Could explain the sale of %10 off $250 if you pick up in store. I initially assumed it was a goal of encouraging foot traffic but it could be more than just that and hoping to get rid of warehouse requirements.
Opening the distribution center 2 years ago = super bullish Closing the distribution center after 2 years = even more bullish
Is this the same new one from 2 years ago?
Yes. The Nevada one never opened. They closed down the Kentucky one last year. Now it's just Texas. Gamestop actively has fewer distribution centers than before RC took over.
Yessir, op wrote in the article when the lease was signed, you can find posts in this sub if you google "gme, reddit, distribution center" one as recent as 6 months ago talking about the York, PA fulfillment center but also a lot when it first opened
What was the length of the lease? Did it have a break clause after 2 years? Be good to know as this would indicate bullish if true.
Yep. A whoooole lot of copeium in here.
As is tradition
As is tradition
Sounds good to me 👀
👆
☝️☝️☝️☝️☝️
Thank you, you have refocused my concerns.
Real question is why do they need this? If this is bearish why? If you don't need inventory space, why is it a bad thing? If GME is utilizing quick turnover items that sell well, why's keeping warehouses you don't need taking up a lot of cash flow a good thing?
GME had like $1b in inventory, didn’t they? I think it was hypothesized that GME stocked up because of the supply chain issues. Perhaps we needed the warehouse for that?
I can try the bear case - this was the expansion beyond brick and mortar to take market share from Amazon for the niche gaming products on the east coast. This would mean GME will see less growth but enable more cost cutting. Not really bearish if they weren’t drumming up the e-commerce volumes to justify the additional overhead.
What volumes on E-comm? This facility in general was done before RC had a say IIRC. How's letting it go when they don't need the space a bad thing? I agree not everything is Bullish, but in regards to the things happening since last year, I think they are. Prior to that, their foray into NFTs was too late and a bad move IMO, but closing it knowing it was a bad move and that the market is not ready is bullish. Same for inventory space. Needing that space for Supply Chain reasons makes sense as does getting rid of it if you don't. I think the Bears have no case other than shrinking revenues, of which is driven by store closures as they right size and figure out waht foot print makes the most sense for them. Even then, that Bear case is paper thin IMO, which should be shown in March. Realisitically the only thing they screwed up on was releasing a Beta-NFT market place during a crypto winter which didn't cost that much in the grand scheme of things.
Was referring to the Amazonification of GME to be a tech company with deep roots in e-commerce. Again I gave the bear case but it’s real thin. I don’t see it as bearish other than they are cutting growth opportunities but RCs strategy right now appears to be cuts to improve margins - which is a good thing.
You can tell from the fact they are closing it going an Amazon route is not working. That makes sense if you ever worked at Amazon. Amazon can do things their way because it's THEM. I can see why Furlong is gone now. He didn't do a thing with the marketplace, overbought bad inventory and space, never pushed the proper channels to market GameStop properly while doing so and in the end what did this do for customers?
>This facility in general was done before RC had a say IIRC. How's letting it go when they don't need the space a bad thing? The press releases imply that the York facility was a result of changes driven by Ryan Cohen. RC and two handpicked directors were added to board January 11, 2021. It was announced that the intention was for RC to become chairman at the June 2021 annual meeting. On Feb 23 GameStop announced the resignation of the CFO and a "Succession Plan to Support Transformation". On March 8, 2021 Gamestop announced that RC was chairman of a 3 person committee called the New Strategy Committee" "to identify initiatives that can further accelerate the Company’s transformation. The Committee is comprised of Alan Attal, Ryan Cohen, and Kurt Wolf, with Mr. Cohen serving as Chairperson”. Alan Attal was one of the two directors chosen by RC to join the board with him in January. The press release listed a series of personnel changes goes already imo,emended after the formation of the committee. https://investor.gamestop.com/news-releases/news-release-details/gamestop-provides-corporate-governance-update The leasing of the York facility was announced the following month, so it appears to be part of the transformation spearheaded by Ryan Cohen.
[https://www.costar.com/article/2126390201/gamestop-gets-ready-to-close-one-of-its-us-distribution-hubs](https://www.costar.com/article/2126390201/gamestop-gets-ready-to-close-one-of-its-us-distribution-hubs)
It is part of the continuing cost cutting measures that have reversed most initiatives started in 2021. These cost cutting measures have brought the company to the brink of profitability, even though revenues have declined. Cost cutting measure are bullish in the short term, but if too deep are bearish in the long term.
RC opens distribution center 2 years ago = omg this guys a genius, competing with Amazon, gme is the future. RC closes the exact same distribution center he opened = omg this guys a genius, gme is doing so well they don't even need more distribution centers Good question tho, why did they need this and waste time and money with it? Very good question for RC for sure
Unfortunately, this comment has a very valid point.
You should try and shill harder. Makes me happy to see stupid comments with no basis in fact.
Brother they closed the same distribution center RC opened, if that's bullish so be it man live in whatever reality you want
GameStop leased the space, they didn't build a new facility or outright purchase the property. A lease implies short term use, just like leasing a car. Without additional context, there's no ability to say it's good or bad. Any attempt to do so is 110% speculation.
Shrug. Closing centers isn't bad in and of itself. Short term= positive, long term= neutral to negative. It's certainly quite interesting to see a lot of closures since 2021. Not saying going to speculate and tote MOASSS. We need positive news and struggle to get it. I'm sure RC is very aware of the state of things, and if GME goes the GMERICA= BRK.A.2.0 then so be it. As and apevestor I am ok with that. I have money in GME that I can afford to lose, something we talked a lot about in 2021 during the DD times. So, if GME goes bust, ok, we fought a good fight! If it turns into BRK2.0 awesome yay us! If it turns into a meh IEP company that's so so, sure thing. For me the journey is what makes this fun and the fact that Wall St. hates RC and us. I think one thing people forgot is that we have power over them. If we still want a MOASS we could get one, it's really on us. I respect your reply being more civil!
RC didn’t have full control when those decisions were made, they were still implementing the BCG plan at that point I believe. Yes, he was part of the board but he was not the chairman yet. And yes people here are bullish on anything RC or GME haha. See comments above now on cost cutting benefits/more inventory in stores now. I am waiting to see the next earnings report before I make any bullish vs. bearish claims here.
How long was the lease for?
Press release doesn't state but I would assume it runs out this coming May and was maybe a 3yr lease.
If that’s the case, sounds like a cost cutting move. Probably a 3 year lease.
And commercial real estate is in the toilet right now so they could probably get a better deal if they actually needed the space.
Commercial real estate ape here, if I may weigh in. Not necessarily the case for all forms of commercial real estate. Offices in Manhattan are super fucked. Industrial real estate (warehouses, factories, etc) has continued to retain and appreciate value. It's one of those things that's impossible to do from home. Warehouse lease rates for something like the York, PA center would have gone up in the 2-3 years from the initial lease. I think this is more about what the other posters in the thread have said: that gamestop is moving towards using the existing stores as warehouses and distribution centers rather than giant centralized models of distribution. I think the York, PA center probably got them through the last 2 holiday seasons and they're ready to go forward without it. I trust RC to make moves. We don't know the full story till we do.
Since the WARN posting on the PA state website says the closure is March 15- Sept 30th I suspect the lease expires 9/30/2024. The notices handed to employees on MLK day said that operations were to cease on 3/15 and terminations were in the 14 day period afterwards. No severance or placement benefits. No payment for vacation or PTO. https://ibb.co/S7xN5Z1 https://ibb.co/VjXMKKG
>No payment for vacation or PTO. That part is kinda fucked, BUT it's advance notice, so like, take all the PTO you have left or lose it. The shitty part would be if they couldn't support everyone going on PTO to burn it.
Unfortunately, it's state law. If it were CA or MA, they would be required to be paid out. CA requires within 24 hours.
Not too fucked. Apes need to realize if they want to get paid someone else has to lose. Unless apes start telling the board to nft dividend instead of screwing lowly employees.
Good. That wouldn’t make sense for them to provide severance to warehouse workers lol
And why wouldn't it? Us peasants don't deserve severance for committing ourselves to a company and doing most if not all the work?
I know all the morally superior redditors will downvote me to hell but it would be a poor business decision to give severance pay to unskilled labor. People with positions that require degrees often don’t even receive any severance packages after being laid off. It’s practically throwing money away
It doesn't always have to be business. Especially when your decisions fucks up the lives of people. I don't want to live in this world because all it's based off of are business decisions and look what that's led too.
Sorry to break it to you but you don’t succeed in business by having a big heart.
Sorry to break it to YOU but your idea of success has been horribly perverted. I hope you learn some day that businesses can't make money off of people if people don't support them. Or if people have no money. Let's also not forget, the board members aren't the ones who packed and shipped all those orders. Hell they didn't even have a hand in picking the people that run the place and make those decisions. But I'm sire they'll still get bonuses this year and most likely in sums larger than those workers salaries combined.
Yeah… you’re kind of making my point for me here bud
Good or bad, at least this is based on facts and not tinfoil bullshit...
Our journey was based on tinfoils. Or else we have already got the moass lol.
From some of my packages I've received from GameStop in the past year, I think they may be utilizing local stores as part of their fulfillment chain. If this is true, it could explain why they would become less reliant on large centralized warehousing. (Personally, I think it is true, because of their fast delivery turn around time.) In that case, this would be an amazingly powerful way to leverage their retail space and reduce their expense costs.
This
Bring that share price down to $9, let’s see how quickly apes DRS it.
*Well...?!? We're waiting?!?!*
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Well, you can handle the down votes but your basic logic indicates that you think there is nothing fraudulent to the GameStop price. If people have DRS’ed shares and have locked up at least 25% of the float at this point, there should be absolutely nothing but severe difficulty finding shares to short, but somehow they keep materializing I don’t care what you tell me about market makers and liquidity, but that’s illegal and manipulation, particularly when the other side of your company is holding a massive short position
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It was in a much worse state Jan 21 and squeezed, then they turned off the buy button. All they’ve done since then it cut costs and improve margins but somehow now it can’t squeeze?
Shills everywhere! Reminds of me 21 soooo much. Now all we need is dank memes and diamond hands and we are back baby!!!
Discussion/opposing viewpoints are fine, being intentionally rude/mean is not.
"the gaming side is dead.." Ok. 🤣🤣🤣
You deserve all the downvotes for this nonsense.
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1 Centre left
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I appreciate this post. We want the good, the bad, and the ugly or else it all just becomes an echo chamber and any difference of opinion is cast out. The NFT marketplace/wallet not panning out was a big disappointment for me personally because I see the value in owning your own game/skin/gun/etc and being able to share the profit off the effort it took to obtain it. Still waiting to see what becomes of Playr. Can it be Steam for Web 3.0? We will see. End of the day some stuff works, some doesn’t, but the smart business/ leaders can admit mistakes and move in a new direction.
Seems like hitting the full-year profitability goal is a hinge point for something else at play. The aggressive pivot towards profitability always felt...off. So too did RC's email when he joined as CEO. It made me feel like I was reading GameStop's financial position totally wrong, that things were way more dire than what had been chanted on this sub. It all boils down to what the board is seeing/forecasting. My dream scenario is that they're doing this because it's been arranged with an outside investor. Maybe someone told them back in 2022, "if you manage to reach full-year profitability by this benchmark, I'll buy in huge." I'd be very surprised, but it honestly seems like we're gussying up to be acquired by someone.
The board very wisely already got the huge buy-in back in mid-2021. 3.5M shares sold in April 2021 for $551M ($157/share). It was done as ATM offering, so many shares were purchased by apes. Big investors were not needed. https://investor.gamestop.com/news-releases/news-release-details/gamestop-completes-market-equity-offering-program Then another offering of 5M shares for $1.126B in June 2021 (average price of $225/share.). So a total of 8.5M shares issued and sold for $1.677B (average $197/share, or $49/share split adjusted). That $1.677B very wisely raised in the first half of 2021 is what has funded the losses of the last 2-1/2 years. That has also funded the many initiatives started by RC in 2021.
I'm not sure what you're getting at here in the context of what I said.
I think what he's getting at is we have over billion in cash, over a billion in inventory, and no debt. We don't need another big investor, especially not one who would be dumb enough to put pressure for short-term profitability over long term success. We already got our cash injection. Apes directly own at least 25% of the company now. Cash, inventory, long holding investors, no debt, improving profitability despite being in a Depression. We have stopped all the bleeding and at this point have enough cash to survive decades of only staying consistent. There is definitely no "dire situation".
If that really is the case and there is no direness, then it directly contradicts the tone of the RC letter upon becoming CEO, as well as the cuts made to employee benefits. Plus, I don't know what you're reading, but in the narrow realm of retail spending, we're definitely NOT in a depression. Don't get me wrong - I applaud the philosophy of pushing the company to be more robust financially. It's the ferocity of the pivot from investment to cost-cutting that knocked me sideways. It struck me as odd then, and the web3 abandonment just adds more fuel to my speculation. At this point, I'm thinking Q4 will be a pivotal gauge for me. If GameStop manages to post a profitable year, which would be fabulous, I'm going to have a tough time if there's no color given to our "what's next?" strategy - especially with regard to revenue shrinkage.
There is some direness, they have a long road to climb to become consistently profitable. The point is that your post posits that recent maneuvers by the company imply preparation for a buyout, but that belies many other facts of the company's financial position and past moves that make a buyout extremely unlikely in the near term. A big part of their plan was NFTs, unfortunately the FTX debacle completely tanked the NFT marketplace for the foreseeable future, so they are taking measures to remain profitable despite their huge gamble in NFTs basically being a complete failure. They've stated on record that they have made the changes necessary to put them in a better position to become profitable, now they need to show that via actual profit. I believe they can do so in Q423 and hopefully results will be good enough to make 2023 a profitable year. Of course they want to be profitable, but not so that they get acquired. You get acquired when you are NOT profitable. Also, a would-be big time investor would want to buy *before* they are profitable when they can pay orders of magnitude less for their acquisition.
That could be. I've thought that too. It could be an outside company or an acquisition by RC Ventures to roll into Gmerica.
I don't see something like that being RC Ventures' wheelhouse. Even if that were the case, then I don't think it would necessitate the extreme pivot towards profitability.
I dunno that's what makes this fun and frustrating!
On that we agree!
So much concern trolling this last week lol
Anyone else receive the wrong item that may have been picked in a warehouse by someone who is "just doing a job"? fulfillment thru stores by employees who want to work in the gaming space is a win in my eyes. I purchased a wall mount lunar phase light for like $25 and received a pair of $125 wireless gaming headphones. Win on my part but loss for the company ( I did correct the situation, check my posts) but if this happens a lot then losses pile up thru negligence.
Someone posted a rumor a month ago that they signed a different lease in Harrisburg.. I wonder if that was true and they found better terms.. OR this is something else. tl; drs e: looks like 155 employee terminations IF they leased somewhere else ~27mi away; they might have placed the old staff, or tried to - seems they didnt, this needs explanation I feel, this affects ecommerce..
My understanding is that the Reno distribution center announced in July 2021 is no longer in operation (not sure it ever really opened). And Shepherdsville, KY facility that replaced the Louisville warehouse was shut down this time last year. So Grapevine, TX will be the only distribution and fulfillment center now. Since these warehouses were announced Gamestop has pivoted to ship-from-store, where the fulfillment of e-commerce orders is down at the retail store level. Edit to add: The 500 person call center in Pembroke Pines, FL announced in 2nd half 2021 has also been closed. You can find all of the press releases about the expansion plans at https://investor.gamestop.com/newsroom None of the closures were announced so it is harder to track them down.
Thanks
Either he is expecting a war, a massive recession, or rolling this company into something/one. He cutting errrything!
Undoing furlongs spending spree and amazonification of GameStop.
This lease preceded Furlong. It was after RC became head of the "Strategy Committee" on March 8. https://investor.gamestop.com/news-releases/news-release-details/gamestop-provides-corporate-governance-update > GRAPEVINE, Texas, March 08, 2021 (GLOBE NEWSWIRE) -- GameStop Corp. (NYSE: GME) (“GameStop” or the “Company”) today announced that its Board of Directors (the “Board”) has formed a Strategic Planning and Capital Allocation Committee (the “Committee”) to identify initiatives that can further accelerate the Company’s transformation. The Committee is comprised of Alan Attal, Ryan Cohen, and Kurt Wolf, with Mr. Cohen serving as Chairperson. Since the Committee’s formation, the Company has taken steps that include: Alan Attal was one of the two directors that RC picked to join the board with him on Jan 11, 2021.
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Maybe it wasn't espionage. Maybe furlong wasn't great and amazon runs itself. AWS is their money maker anyways. Or maybe a really good plant. Nobody knows truly.
Yeah i spot this too. Many moves seem to undo Furlong moves
Most of the digital transformation program was started before Furlong was hired. His hiring, as well as the hiring of several others were part of the digital transformation program headed by RC in the first half of 2021. https://investor.gamestop.com/news-releases/news-release-details/gamestop-announces-additional-board-refreshment-accelerate It is interesting to look back at the flurry of press releases in first half of 2021 as RC took over Gamestop. https://investor.gamestop.com/newsroom?page=7 https://investor.gamestop.com/newsroom?page=6 https://investor.gamestop.com/newsroom?page=5 https://investor.gamestop.com/newsroom?page=4
All of those press releases were very bullish at the time. I remember being hyped. He was moving fast and seemed to have a plan. All of the energy from 2021 is completely missing from Gamestop and most notably RC. In so many ways, the share price reflects that.
Why do you post about meta?
Who do you think hired Furlong?
Berkshire Hathaway closed its textile business too. Maybe this is the beginning of the pivot into a more liquid, holding-style company with fewer tangible overheads.
Maybe RCs long term plan was to acquire Buy Buy Baby and when that didn’t materialize, there was no reason for the warehouse. Just my smooth brain speculation.
Average salary for warehouse worker in Pennsylvania is 16.24 an hour ~34k according to indeed and a range of 32k to 39k according to salary dot com. So on payroll alone we're saving ~5-6 million a year, more on HR, lease etc. Profitability imminent
Depends on if the warehouse was making money. Cutting costs by labor when the building generates isn’t the best press. Fire everyone cost savings galore. Pretty shifty mentality, these are average joes.
Warehouses dont make money, they cost money. It's a necessary cost of fulfillment but if that cost can be reduced by optimizing inventory turnover and shifting the burden of delivery to stores while also getting quicker delivery times then why not do it?
Incorrect my warehouse i help run makes 100k+ a month. I run a 3pl storage program. It’s all in how you run it
Thats different. 3PL is a service. GameStop sells apples directly to customers through their retail stores supplied by a warehouse they manage. Your warehouse manages the logistics of apples that are owned by other companies and those companies pay your warehouse for the service.
Yeah I love rc firing more and more employees and closing down stores and warehouses, doing great things for the balance sheets. Here's to hoping more people get fired and we're positive for the year!
You're trying to be flippant but it just makes you sound immature and not very business savvy. I'll take RC's track record of building and investing over your hyperbole anyday.
But it IS a bad thing people are losing their jobs, right?
It's sad for them but people get laid off all the time, it's an unfortunate and difficult part of being an adult.
More cost cutting lol It’s only so much you can cost cut!
Time to DRS some more GME
I absolutely love how Ryan Cohen has been leading them to make certain key decisions for the past years. Like adopting regulations and positioning themselves in the derivatives market which generally just insures they dig themselves deeper into the mess of lies they have been trying to create to shake investors. Closing the distribution center shows that dynamic strategy. It's a shame the rich and powerful don't use their power to actually make this world a better place... It's time for a change. I've been waiting my whole life for this.
When tendies?
This seems to be inline with their strategy of relying on 3rd party for distribution. Here is an article that was published in January 2023 on closure of Kentucky Distribution Center. [https://www.costar.com/article/2126390201/gamestop-gets-ready-to-close-one-of-its-us-distribution-hubs](https://www.costar.com/article/2126390201/gamestop-gets-ready-to-close-one-of-its-us-distribution-hubs) So why is this being discussed as a big change.. Gamestop is not turning off E-Commerce, they are optmizing costs of supporting E-Commerce.
I do not think that Gamestop ever engaged 3rd party distribution services. Gamestop has pivoted to using retail stores for fulfillment of online orders. I do not see this, by itself, as a big change, but if you look back at the many initiatives and personnel changes announced in 2021 you will find that almost every single one has been reversed. Shepherdsville, Reno, and York distribution and fulfillment center have all been closed. The 500 person call center announced for Pembroke Pines, FL has been closed. The Immutable and FTX collaborations appear to have ended. NFT marketplace and the wallet are dead. It is harder to determine the result of all of the personnel announcements that had press release issued in 2021, but it appears that almost all of those people are no longer at Gamestop. Individually none of these are a big deal. Cumulatively they make me wonder about the quality of management. Look for yourself at the flurry of press releases in 2021 and then look at the current status for each one: https://investor.gamestop.com/newsroom?page=4 https://investor.gamestop.com/newsroom?page=5 and continue back to the January 11, 2021 announcement that RC and two people of his choosing are being added to the board, then in March it was announced that he headed up a committee to revamp the company and drive its transformation. And there were many press releases about changes in key positions and new positions related to the transformation being created.
But what about the workers? People losing their jobs and their livelihood has to be a bad thing right? Like everyone here is saying GME has good fundamentals for long term investment besides MOREASS, and that cutting the “waste” is a good thing for profit. But can we at least admit that closing stores and warehouses is bad/wrong ethically here? And yes I know other companies are also “closing” departments and letting people go, but that’s not ethically right either.
Bullish?
Cost cutting is the reason that Gamestop will likely report a profit for 2023. Cost cutting is bullish in the short term. To the extent that these cost cutting measures hurt future growth they are bearish, as is the fact that almost every initiative started by the new team in 2021 has been canceled and reversed.
Yea
Nope
>On Monday I reported You posted an unsubstantiated claim. Something quite a lot of people do. >That was removed because it was speculative. If you had evidence at the time then it wouldn't have been removed.
So GME is transitioning into a finical fund? GameShire Stopaway? Well at least the warehouse didn't catch fire with sprinklers falling upwards.
RC keeps his plans secret, so both potential competitors and shareholders are left in the dark. All we know is that the many plans announced in 2021 after Ryan Cohen took control and started setting strategy have been reversed. So the company has reset to condition before January 2021, but with the closing of the worst performing stores and revised software for running the company more efficiently (the SAP conversion).
Bullish
Wouldn't it also be a tax write off? Thise are never bad for business.
GameStop has years of losses to offset taxes, even if they start making a small profit again, they won’t get value from write offs for ages
I would imagine the cost to run a business in TX vs NY is more favorable in Texas. Texas offers great tax incentives to new and expanding business. Also no state income tax in TX as well.
Huh… #payus