GameStop 2009 Annual Report Download - page 20

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Business and Growth Strategy
Our goal is to continue to be the world’s largest retailer of new and used video game products and PC
entertainment software and strengthen that position by executing the following strategies:
Continuing to Execute our Proven Growth Strategies. We intend to continue to execute our proven growth
strategies, including:
•Open New Stores. Because of the continued success of our new store performance over the past three years,
we intend to continue opening new stores in our targeted markets. We opened 388 new stores in fiscal 2009.
We opened 674 new stores in fiscal 2008 and acquired 328 stores in France, a new market for us. On average,
our new stores opened in the past three years have had a cash payback of less than two years. We plan to open
approximately 400 new stores in the 52 weeks ending January 29, 2011 (“fiscal 2010”). Our primary growth
vehicles will be the expansion of our strip center store base in the United States and the expansion of our
international store base. Our strategy within the U.S. is to open strip center stores in targeted major
metropolitan markets and in regional shopping centers in other markets. Our international strategy is to
continue our expansion in Europe and the opening of new stores in advantageous markets and locations in
Canada and Australia. We analyze each market relative to target population and other demographic indices,
real estate availability, competitive factors and past operating history, if available. In some cases, these new
stores may adversely impact sales at existing stores, but our goal is to minimize the impact.
•Increase Comparable Store Sales. We plan to increase our comparable store sales by capitalizing on the
growth in demand, expanding our sales of used video game products, increasing market share and awareness
of the GameStop brand.
•Increase Sales of Used Video Game Products. We believe we are the largest retailer of used video game
products in the world and carry the broadest selection of used video game products for both current and
previous generation platforms, giving us a unique advantage in the video game retail industry. The
opportunity to trade in and purchase used video game products offers our customers a unique value
proposition generally unavailable at most mass merchants, toy stores and consumer electronics retailers.
We obtain most of our used video game products from trade-ins made in our stores by our customers. We
will continue to expand the selection and availability of used video game products in our stores. Used
video game products generate significantly higher gross margins than new video game products. Our
strategy consists of increasing consumer awareness of the benefits of trading in and buying used video
game products at our stores through increased marketing activities. We expect the continued growth of
new platform technology to drive trade-ins of previous generation products, as well as trade-ins of next
generation platform products, thereby expanding the supply of used video game products.
•Increase GameStop Brand Awareness. Substantially all of GameStop’s U.S. and European stores are
operated under the GameStop name, with the exception of the Micromania stores acquired in France. In
2007, GameStop introduced its new brand tagline “Power to the Players” and launched a television, radio
and newspaper advertising campaign to increase awareness of the GameStop brand. Building the
GameStop brand has enabled us to leverage brand awareness and to capture advertising and marketing
efficiencies. Our branding strategy is further supported by the GameStop “Edge” loyalty card and our Web
site. The “Edge” card, which is obtained as a bonus with a paid subscription to our Game Informer
Magazine, offers customers discounts on selected merchandise in our stores. Our Web sites allow our
customers to buy games online and to learn about the latest video game products and PC entertainment
software and their availability in our stores. We intend to increase customer awareness of the GameStop
brand. In connection with our brand-building efforts, in each of the last three fiscal years, we increased the
amount of media advertising in targeted markets. In fiscal 2010, we plan to continue to increase media
advertising to increase brand awareness over a broader demographic area, to expand our GameStop
loyalty card program, to aggressively promote trade-ins of used video game products in our stores and to
leverage our Web sites at www.gamestop.com, www.ebgames.com.au, www.gamestop.ca,
www.gamestop.it, and www.micromania.fr.
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