GameStop 2005 Annual Report Download - page 30

Item 2. Properties
All of our stores are leased. Store leases typically provide for an initial lease term of three to ten years, plus
renewal options. This arrangement gives us the flexibility to pursue extension or relocation opportunities that arise
from changing market conditions. We believe that, as current leases expire, we will be able to obtain either renewals
at present locations or leases for equivalent locations in the same area.
The terms of the store leases for the 4,490 leased stores open as of January 28, 2006 expire as follows:
Lease Terms to Expire During
Number
of Stores
(12 Months Ending on or About January 31)
Expired and in negotiations ................................................ 299
2007................................................................. 320
2008................................................................. 585
2009................................................................. 899
2010................................................................. 975
2011 and later .......................................................... 1,412
4,490
In March 2004, we purchased a 480,000 square foot facility in Grapevine, Texas, which houses our
headquarters operations and certain of our distribution operations. We also own the following distribution facilities:
an 80,000 square foot distribution facility in Arlov, Sweden; a 120,000 square foot distribution facility in Brampton,
Ontario, Canada; a 107,500 square foot distribution facility in Milan, Italy; a 67,000 square foot distribution facility
in Memmingen, Germany; and a 70,000 square foot distribution facility in Pinkenba, Queensland, Australia.
In addition to our stores, we lease the following distribution or office facilities: a 200,000 square foot
distribution center in Louisville, Kentucky under a lease which expires in April 2010; a 13,000 square foot
distribution facility in New Zealand under a lease which expires in April 2010; a 22,000 square foot distribution
facility in Valencia, Spain under a lease which expires in March 2009; a 15,000 square foot office facility in
Valencia, Spain under a lease which expires in August 2006; a 7,300 square foot office facility in Minneapolis,
Minnesota which houses the operations of Game Informer magazine, under a lease which expires in February 2007;
a 15,000 square foot facility in Dublin, Ireland under a lease which expires in January 2013.
We lease a 12,000 square foot call center in Las Vegas, Nevada. This lease expires in June 2009. We intend to
close this facility in early fiscal 2006. We also lease a 27,000 square foot distribution center in Betzigau, Germany
under a lease which expires in September 2011. This facility is no longer in use and we are actively seeking a tenant
to sublease this facility.
We own EB’s 140,000 square foot corporate office building in West Chester, Pennsylvania and EB’s
315,000 square foot distribution facility in Sadsbury Township, Pennsylvania. These facilities are currently
available for sale and we intend to close them in the first half of fiscal 2006. The distribution facility is collateral
on a 10-year mortgage agreement. As of January 28, 2006, the outstanding principal balance under the mortgage
was approximately $9.3 million. Under the terms of the mortgage agreement, we could be liable for an early-
termination payment of approximately $0.8 million when we sell the facility and retire the mortgage. This early-
termination payment is recorded in accrued liabilities in the consolidated balance sheet as of January 28, 2006, as
the Company intends to retire the mortgage if the building is sold in fiscal 2006 and expects to be liable for the early-
termination penalty.
Item 3. Legal Proceedings
On October 19, 2004, Milton Diaz filed a complaint against a subsidiary of EB in the U.S. District Court for the
Western District of New York. Mr. Diaz claims to represent a group of current and former employees to whom
Electronics Boutique of America Inc. (“EBOA”) allegedly failed to pay minimum wages and overtime compen-
sation in violation of the Fair Labor Standards Act (“FLSA”) and New York law. The plaintiff, joined by another
former employee, moved to conditionally certify a group of similarly situated individuals under the FLSA and in
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