GameStop 2004 Annual Report Download - page 9

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PART I
Item 1. Business
General
GameStop Corp. (""GameStop'' or the ""Company'') is the largest video game and PC entertainment
software specialty retailer in the United States, based on the number of U.S. stores we operate and our total
U.S. revenues. We carry one of the largest assortments of new and used video game hardware, video game
software and accessories, PC entertainment software, and related products, including action Ñgures, trading
cards and strategy guides. As of January 29, 2005, we operated 1,826 stores in the United States, Puerto Rico,
Ireland, Northern Ireland and Guam. We operate most of our stores under the GameStop name. We carry a
constantly changing selection of more than 5,000 stock keeping units (""SKUs'') of electronic game
merchandise in most stores. In addition, we operate a web site at www.gamestop.com and publish Game
Informer, the industry's largest circulation multi-platform video game magazine, with over 2,000,000
subscribers.
Of our 1,826 stores, 1,310 stores are located in strip centers and 516 stores are located in shopping malls
and other locations. Our strip center stores, which average approximately 1,600 square feet, carry a balanced
mix of new and used video game hardware, video game software and accessories, which we refer to as video
game products, and PC entertainment software. Our mall stores, which average approximately 1,200 square
feet, carry primarily new video game products and PC entertainment software, as well as used video game
products. Our used video game products provide a unique value proposition to our customers, and our
purchasing of used video game products provides our customers with an opportunity to trade in their used
video game products for store credits and apply those credits towards other merchandise, which, in turn,
increases sales.
Our corporate oÇce and distribution facilities are housed in a 250,000 square foot headquarters and
distribution center in Grapevine, Texas. In March 2004, we purchased a new 420,000 square foot facility in
Grapevine, Texas. We relocated some of our distribution operations to this facility in Ñscal 2004 (the 52 weeks
ending January 29, 2005), and intend to relocate our headquarters and remaining distribution center
operations to this facility in the second quarter of Ñscal 2005 (the 52 weeks ending January 28, 2006).
Prior to February 12, 2002, we were a wholly-owned subsidiary of Barnes & Noble, Inc. (""Barnes &
Noble''). On February 12, 2002, we completed an initial public oÅering of shares of our Class A common
stock raising net proceeds of approximately $347.3 million. A portion of those proceeds was used to repay
$250.0 million of our $400 million indebtedness to Barnes & Noble, with Barnes & Noble contributing the
remaining $150.0 million of indebtedness to us as additional paid-in-capital. Barnes & Noble owned
approximately 63% of the outstanding shares of our capital stock through its ownership of 100% of our Class B
common stock until October 2004. On October 1, 2004, we repurchased approximately 6.1 million shares of
our Class B common stock at a price equal to $18.26 per share for aggregate consideration of approximately
$111.5 million. On November 12, 2004, Barnes & Noble distributed to its shareholders its remaining
29.9 million shares of our Class B common stock in a tax-free dividend. Our Class A common stock and our
Class B common stock are traded on the New York Stock Exchange under the symbols GME and GME.B,
respectively.
Disclosure Regarding Forward-looking Statements
This report on Form 10-K/A and other oral and written statements made by the Company to the public
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the ""Securities Act''), and Section 21E of the Securities Exchange Act of 1934, as amended (the
""Exchange Act''). The forward-looking statements involve a number of risks and uncertainties. A number of
factors could cause our actual results, performance, achievements or industry results to be materially diÅerent
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