Gamestop Corporation (GME)

[Prudent Capitalist]

That sounds good in theory, but just last week Ryan Cohen made it known that he had gone undercover ala the show Undercover Boss and visited many of GME's locations (GME still has 3,000 brick and Mortar locations) and announced his intention to use much of the $1.7 Billion raised in share sales to upgrade the brick and mortar stores. How do you reconcile this with the notion that GME will move into on-line gaming at the same time that Netflix has announced in the last week that it will enter the on-line gaming space in a very big way?

Ryan Cohen Pulls 'Undercover Boss' On GameStop Stores, Wants To Invest In Physical Locations

5:15 pm ET July 22, 2021 (Benzinga)

Since 2010, the show “Undercover Boss” has aired on CBS. Ryan Cohen has yet to appear on the Emmy-award-winning show, but staged his own version of the plot deep inside GameStop Corp (NASDAQ: GME) stores.

What Happened: Cohen, the company's largest shareholder, became a member of GameStop's Board of Directors earlier this year and was named chairman in June.

Many GameStop investors see Cohen turning the struggling video game retailer into an e-commerce player thanks to his guidance of leading Chewy Inc (NYSE: CHWY) before selling the pet e-commerce giant for $3.4 billion.

Cohen is part of the efforts to turn around GameStop and part of the move has been to close underperforming stores. In the last 15 months, over 800 stores have closed, leaving GameStop with around 3,000 stores in the U.S.

A new report from Reuters says Cohen would like to use some of the $1.7 billion the company raised from selling shares and improve physical store locations.

Cohen’s Tours: Cohen made unannounced visits to dozens of GameStop locations. The chairman wasn't recognized during many of the visits, wearing a casual disguise and not announcing who he was while in stores.
Dusty shelves, empty product shelves and customer service were the problems Cohen saw while in select stores, according to the Reuters report.

Capital could be used to redesigning stores, restocking shelves and staff training, customers said. Other plans from Cohen include extending store hours into the later part of the night due to gamer demand and adding products from additional categories.

The report suggests GameStop will try to improve both its physical stores and boost its e-commerce presence simultaneously. Many investors and analysts believed the company would continue to close stores and pivot to a majority e-commerce model.