GameStop 2004 Annual Report Download - page 22

Download and view the complete annual report

Please find page 22 of the 2004 GameStop annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

twice a week. We purchased a new 420,000 square foot headquarters and distribution center in Grapevine,
Texas in 2004 and relocated certain of our distribution center operations to this facility. We intend to move our
remaining distribution center operations to that facility in the second quarter of Ñscal 2005.
Management Information Systems. Our proprietary inventory management system and point-of-sale
technology show daily sales and in-store stock by title by store. Systems in place use this data to automatically
generate replenishment shipments to each store from our distribution center in Grapevine, Texas, enabling
each store to carry a merchandise assortment uniquely tailored to its own sales mix and rate of sale. Our call
lists and reservation system also provide our centralized buying staÅ with information to determine order size
and inventory management for store-by-store inventory allocation. We constantly review and edit our
merchandise categories with the objective of ensuring that inventory is up-to-date and meets customer needs.
We use a centralized PC network-based information system based in our corporate oÇces, in order to
minimize initial outlay of capital while allowing for Öexibility and growth as operations expand.
Our in-store point-of-sale system enables us to eÇciently manage in-store transactions. This proprietary
point-of-sale system has been enhanced to facilitate trade-in transactions, including automatic look-up of
trade-in prices and printing of machine-readable bar codes to facilitate in-store restocking of used video
games. In addition, our central database of all used video game products allows us to actively manage the
pricing and product availability of our used video game products across our store base and re-allocate our used
video game products as necessary.
Field Management and StaÅ
Our United States, Puerto Rico and Guam store operations are managed by a centrally located vice
president of stores, four divisional vice presidents and 14 regional store operations directors. The regions are
divided into approximately 140 districts, each with a district manager covering an average of 13 stores. Our
stores in Ireland and Northern Ireland are managed by the founders of Gamesworld. Each store employs, on
average, one manager, one assistant manager and between two and ten sales associates, many of whom are
part-time employees. We have cultivated a work environment that attracts employees who are actively
interested in electronic games. We seek to hire and retain employees who know and enjoy working with our
products so that they are better able to assist customers. To encourage them to sell the full range of our
products, we provide our employees with targeted incentive programs to drive sales. We also provide our
employees with the opportunity to take home and try new video games, which enables them to better discuss
those games with our customers. In addition, employees are casually dressed to encourage customer access
and increase the ""game-oriented'' focus of the stores. We also employ 14 regional loss prevention managers
who assist the Ñeld in implementing security to prevent theft of our products.
Our stores communicate with our corporate oÇces via daily e-mail. This e-mail allows for better tracking
of trends in upcoming titles, competitor strategies and in-stock inventory positions. In addition, this
communication allows title selection in each store to be continuously updated and tailored to reÖect the tastes
and buying patterns of the store's local market. These communications also give Ñeld management access to
relevant inventory levels and loss prevention information. We also sponsor an annual store managers'
conference, which we invite all video game software publishers to attend, and operate an intense educational
training program to provide our employees with information about the video game products that will be
released by those publishers in the holiday season.
Customer Service
Our store personnel provide value-added services to each customer, such as maintaining lists of regular
customers, notifying each customer by phone when new titles are available, and reserving new releases for
customers with a down payment to ensure product availability. In addition, our store personnel readily provide
product reviews to ensure customers are making informed purchasing decisions and oÅer help-line numbers to
increase a customer's enjoyment of the product upon purchase.
15