GameStop 2008 Annual Report Download - page 27

We distribute merchandise to our Canadian segment from two distribution centers in Brampton, Ontario. We
have a distribution center near Brisbane, Australia which supports our Australian operations and a small distribution
facility in New Zealand which supports the stores in New Zealand. European segment operations are supported by
six regionally-located distribution centers in Milan, Italy; Memmingen, Germany; Arlov, Sweden; Valencia, Spain;
Dublin, Ireland and Paris, France. All of our international distribution facilities support both new title distribution
and replenishment, which are sometimes supported by third-party distribution networks. These facilities are
designed to support the first-to-market distribution network and enable our stores to meet peak demand and
replenish stores at least twice a week. Our international distribution facilities also support refurbishment of used
products to be redistributed to stores.
Management Information Systems. Our proprietary inventory management system and point-of-sale tech-
nology show daily sales and in-store stock by title by store. Our systems use this data to automatically generate
replenishment shipments to each store from our distribution centers, 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 buying staff 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.
To support our U.S. operations, we use a large-scale, Intel-based computing environment with a state-of-the-
art storage area network and a wired and wireless corporate network installed at our U.S. headquarters, and a secure,
virtual private network to access and provide services to computing assets located in our stores, distribution centers
and satellite offices and to our mobile workforce. This strategy has proven to minimize initial outlay of capital while
allowing for flexibility and growth as operations expand. To support our international operations, we use a mid-
range, scalable computing environment and a state-of-the-art storage area network. Computing assets and our
mobile workforce around the globe access this environment via a secure, virtual private network. Regional
communication links exist to each of our distribution centers and offices in international locations with connectivity
to our U.S. data center as required by our international, distributed applications.
Our in-store point-of-sale system enables us to efficiently 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 reallocate our used video game products as necessary.
Field Management and Staff
GameStop’s U.S. store operations are managed by a centrally-located senior vice president of stores, three vice
presidents of stores and 30 regional store operations directors. The regions are further divided into districts, each
with a district manager covering an average of 14 stores. In total, there are approximately 300 districts. Our stores in
Europe are managed by two vice presidents and managing directors in each country. Our stores in Australia and
Canada are each managed by a vice president. Each store employs, on average, one manager, one assistant manager
and between two and ten sales associates, many of whom are part-time employees. Each store manager is
responsible for managing their personnel and the economic performance of their store. 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 and to maximize our profitability, we provide our employees
with targeted incentive programs to drive overall sales and sales of higher margin products. We also provide our
U.S. 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 regional loss prevention managers who assist the
stores in implementing security measures to prevent theft of our products.
Our stores communicate with our corporate offices daily via 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 reflect the tastes and buying patterns of
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