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Retailer to shutter York-area warehouse

Workers at a York-area distribution center are the latest casualties in GameStop‘s effort to cut costs and rebuild profits.

  • The Texas-based video-game retailer is planning to shutter its 700,000 square-foot warehouse at 20 Leo Lane in Manchester Township and lay off the 155 people who work there, according to a notice sent this week to state officials.
  • “This closure is expected to be permanent,” the company said, noting that employees will be laid off starting around March 15.

 

Why is this happening: Efforts to reach the company were not successful. But securities filings and news reports indicate GameStop has been working to slash expenses and retool its business.

  • In a memo last fall, GameStop chairman and CEO Ryan Cohen reportedly told employees that “extreme frugality” is needed for the company to survive, according to the Wall Street Journal.
  • Cohen — co-founder of online pet-products retailer Chewy — was named GameStop’s CEO last fall after taking over as chairman in 2021.
  • The company has struggled to adjust to the changing ways people play video games — using online streaming services and mobile devices instead of hard copies of games and fancy consoles plugged into televisions.
  • For nine months ending Oct. 28, the company saw an 18.1% decline in the sale of video-game accessories, according to its most recent earnings report.

 

What about the other numbers: GameStop narrowed its losses for the first nine months of its most recent fiscal year but it also saw sales shrink.

 

Remember the meme: Shares in GameStop were the focus of a pitched battle between mass-market investors and hedge fund traders in 2021.

  • Hedge funds were betting on an expected drop in the company’s stock price, known as short selling.
  • But people in the online community reddit rallied in an effort to drive up the price instead.
  • As a result, GameStop became known as one of the first so-called meme stocks — stocks that generate a devoted following on social media.

Workers at a York-area distribution center are the latest casualties in GameStop‘s effort to cut costs and rebuild profits.

  • The Texas-based video-game retailer is planning to shutter its 700,000 square-foot warehouse at 20 Leo Lane in Manchester Township and lay off the 155 people who work there, according to a notice sent this week to state officials.
  • “This closure is expected to be permanent,” the company said, noting that employees will be laid off starting around March 15.

 

Why is this happening: Efforts to reach the company were not successful. But securities filings and news reports indicate GameStop has been working to slash expenses and retool its business.

  • In a memo last fall, GameStop chairman and CEO Ryan Cohen reportedly told employees that “extreme frugality” is needed for the company to survive, according to the Wall Street Journal.
  • Cohen — co-founder of online pet-products retailer Chewy — was named GameStop’s CEO last fall after taking over as chairman in 2021.
  • The company has struggled to adjust to the changing ways people play video games — using online streaming services and mobile devices instead of hard copies of games and fancy consoles plugged into televisions.
  • For nine months ending Oct. 28, the company saw an 18.1% decline in the sale of video-game accessories, according to its most recent earnings report.

 

What about the other numbers: GameStop narrowed its losses for the first nine months of its most recent fiscal year but it also saw sales shrink.

 

Remember the meme: Shares in GameStop were the focus of a pitched battle between mass-market investors and hedge fund traders in 2021.

  • Hedge funds were betting on an expected drop in the company’s stock price, known as short selling.
  • But people in the online community reddit rallied in an effort to drive up the price instead.
  • As a result, GameStop became known as one of the first so-called meme stocks — stocks that generate a devoted following on social media.

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