During Gamestop’s Q4 2020 earnings conference call on Tuesday, CEO George Sherman announced plans for the company to expand into new markets. Sherman reportedly said the business is going to be expanding into the markets of PC gaming, monitors, and gaming TVs.
This announcement comes as the company continues to restructure itself amidst the COVID-19 Pandemic and the “wallstreetbets” craze. Frank Hamlin, who serves as Executive Vice President and Chief Customer Officer for GameStop, is scheduled to be the second senior executive to leave the company in as many months.
GameStop experienced a recent surge in stock price after a group of amateur stock traders on Reddit began investing in the company. Since being labeled a “meme stock”, share prices have gone up by as much as 2500% since January.
The Profit‘s Take:
How will GameStop compete with other online retailers that have sold this product mix for many years? Amazon and Best Buy have greater buying power and therefore a cost advantage. They also have better selection and availability (unless GameStop starts converting stores into mini fulfillment centers) so it will be tough for GameStop to compete on that front as well. Superior customer service might be an option for them, but it’s not an obvious path.
(All information was provided by Reuters, GameStop, and Shack News)
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