Slide 1: Driving Value for All Stockholders May 2020
Driving Value for All Stockholders May 2020Driving Value for All Stockholders May 2020
Slide 2: Safe Harbor Statement
SAFE HARBOR Safe Harbor Statement This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as to the Company’s industry,
Slide 3: Table of Contents
TABLE OF CONTENTS Executive Summary 1 Business Overview 2 3 GameStop Reboot Executing Strategy 4 Hestia-Permit Focused on Short-Term 5 Financial Engineering 3 Highly Qualified and Recently Refreshed Board & 6 Management Team 3TABLE OF CONTENTS Executive Summary 1 Business Overview 2 3 GameStop Reboo
Slide 4: Executive Summary
Executive SummaryExecutive Summary
Slide 5: Executive Summary
EXECUTIVE SUMMARY § GameStop has a new management team and a newly refreshed Board, with 7 out of 10 directors having joined in the last 19 months § The Board undertook an extensive review of strategic alternatives, sold non-core assets, and recruited a new leadership team including CEO, George Sher
Slide 6: Timeline of GameStop's Engagement & Strategic Efforts
TIMELINE OF GAMESTOP’S ENGAGEMENT & STRATEGIC EFFORTS New leadership appointments of Jim Hestia-Permit filed a Bell as EVP and CFO, Hestia-Permit contacted preliminary proxy statement Appointment of Carrie Chris Homeister as EVP Announcement of Ms. Dunn to join its nominating Mr. Wolf of Hestia Teff
Slide 7: We Attempted to Avoid a Proxy Fight with a Settlement
WE ATTEMPTED TO AVOID A PROXY FIGHT WITH A SETTLEMENT § On April 19, 2019, GameStop entered into a Cooperation Agreement with Hestia-Permit § GameStop agreed to appoint a new independent director from among the group of candidates identified by Hestia-Permit, as well as an additional independent nom
Slide 8: Business Overview
Business OverviewBusiness Overview
Slide 9: Industry Leading Omni-Channel Gaming Platform with Global Reach
INDUSTRY LEADING OMNI-CHANNEL GAMING PLATFORM WITH GLOBAL REACH IN A GROWING INDUSTRY GameStop has an established gaming and collectibles business across geographies and is a market share leader in the physical video game industry Total Stores: 5,509 5,421 Video Game Stores 88 Collectibles Stores 1,
Slide 10: Industry Leading Omni-Channel Gaming Platform
…AND IS THE INDUSTRY LEADING OMNI-CHANNEL GAMING PLATFORM • 50K+ associates / expert gamers • The largest distributed sales force • Experiential / Try before you buy • More games sold per console than any other • 260M people within 15 minutes of a GameStop retailer store • Market leading share of ga
Slide 11: GameStop Is in Prime Position to Capitalize on Growth Trends
GAMESTOP IS IN PRIME POSITION TO CAPITALIZE ON THESE GROWTH TRENDS… GameStop is seeing strong demand even with GameStop will be the premier destination for gaming closed stores in most geographies during Holiday 2020 GameStop retained over 90% of our planned GameStop captures significant market shar
Slide 12: GameStop Reboot Plan
GameStop Reboot PlanGameStop Reboot Plan
Slide 13: GameStop Reboot Strategy Stabilized and Optimized Business
GAMESTOP REBOOT STRATEGY STABILIZED AND OPTIMIZED BUSINESS FOR NEAR-TERM AND TRANSFORMS LONG-TERM OUTLOOK Prepared for a new console cycle ü GameStop remains the market share leader ü A clear strategy, strong balance Progress achieved in 2019 sheet, and ability to generate cash ü Reorganized the bus
Slide 14: Continued Successful Execution of Reboot Turnaround Plan
CONTINUED SUCCESSFUL EXECUTION OF STRATEGIC TURNAROUND PLAN, REBOOT Optimize core business Build frictionless digital Establish GameStop as Transform vendor & to drive efficiency ecosystem for content and social and cultural partner relationships for and effectiveness commerce hub of gaming future o
Slide 15: Executing Strategy to Drive Stockholder Value
Executing Strategy to Drive Stockholder ValueExecuting Strategy to Drive Stockholder Value
Slide 16: Strategic Action Taken to Optimize the Core Business
STRATEGIC ACTION TAKEN TO OPTIMIZE THE CORE BUSINESS AND DRIVE EFFICIENCY AND EFFECTIVENESS Action Impact Operational Discipline New Leadership & clear strategy: GameStop Reboot § Corporate re-organization & expense control ü FY 2019 adjusted SG&A reduction of $130M § Pricing & promotion strategyü F
Slide 17: Strategic Plan Beginning to Deliver Tangible Results
STRATEGIC PLAN BEGINNING TO DELIVER TANGIBLE RESULTS The Board and management team’s execution of its strategic plan are beginning to deliver tangible results in a short period. The Company expects the continued execution of the GameStop Reboot will continue to deliver long-term value to stockholder
Slide 18: Total Shareholder Return Since Announcement of GameStop Reboot
STRATEGIC PLAN BEGINNING TO DELIVER TANGIBLE RESULTS Total Shareholder Return Since Announcement of GameStop Reboot 0.6 0.4 0.2 0 9/12/2019 10/12/2019 11/12/2019 12/12/2019 1/12/2020 2/12/2020 3/12/2020 4/12/2020 5/12/2020 -0.2 -0.4 -0.6 -0.8 GameStop Russell 2000 Peer Median Source: Factset From Se
Slide 19: Balanced Approach to Capital Allocation
BALANCED APPROACH TO CAPITAL ALLOCATION § The Board formed a sub-committee to discuss capital Proceeds from Sping Mobile Sale structure approach ($ in millions) § Retired $350M in unsecured senior notes in Spring 2019 $199 § Eliminated annual dividend ($155M) in June 2019 § Completed ~$200M share re
Slide 20: Equity Research Supports Management's Execution
EQUITY RESEARCH SUPPORTS MANAGEMENT’S EXECUTION “GameStop is taking the necessary steps to “Multi-Year Transformation Process Underway: “Additionally, the two-thirds of stores open for preserve liquidity in a challenging GME laid out the four pillars of their strategic curbside/omnichannel sales ret
Slide 21: Executive Compensation Summary
EXECUTIVE COMPENSATION SUMMARY § The Compensation Committee structures executive compensation to incentivize management to achieve profitability and a high level of performance in order to generate sustainable value for GameStop stockholders § Management Say On Pay averaged over 90% stockholder supp
Slide 22: Hestia-Permit Focused on Short-Term Financial Engineering
Hestia-Permit Focused on Short-Term Financial EngineeringHestia-Permit Focused on Short-Term Financial Engineering
Slide 23: Hestia-Permit Focused on Short Term Financial Engineering
HESTIA-PERMIT FOCUSED ON SHORT TERM FINANCIAL ENGINEERING Hestia Capital Management sent a public letter to the Board demanding that “the Board should immediately pursue a tender offer of between $500M and $700M, and continue to buy back as much as $100M in stock per year” completely ignoring the $3
Slide 24: Hestia-Permit Nominees Would Not Be Additive to Our Board
HESTIA-PERMIT ARE FOCUSED ON SHORT-TERM FINANCIAL ENGINEERING AND ITS NOMINEES WOULD NOT BE ADDITIVE TO OUR BOARD No retail experience X No business transformation experience X No video game experience X No omni-channel experience X No public company management experience X 24 Portfolio manager alon
Slide 25: Highly Qualified and Recently Refreshed Board & Management Team
Highly Qualified and Recently Refreshed Board & Management Team and Strong Corporate GovernanceHighly Qualified and Recently Refreshed Board & Management Team and Strong Corporate Governance
Slide 26: Strong Corporate Governance
STRONG CORPORATE GOVERNANCE § Class-leading stockholder engagement program: our Board engaged with stockholders representing 87% of outstanding shares as of April 20, 2020, over the last year § Governance Provisions Protecting Stockholder Rights – Declassified Board to allow stockholders to vote on
Slide 27: Board and Management Refreshment Process
BOARD AND MANAGEMENT REFRESHMENT PROCESS 1. Thoughtfully evaluated and updated management team and Board skillset matrix 2. Retained independent, leading executive search firm Spencer Stuart in connection with hiring a Chief Executive Officer in April 2019 3. Appointed new Chief Financial Officer, C
Slide 28: Board Refreshment & Management Succession
BOARD REFRESHMENT & MANAGEMENT SUCCESSION ü Leading up to our Annual Meeting, our Board engaged with stockholders representing 87% of our outstanding shares as of April 20, 2020, including Hestia-Permit, demonstrating our proactive and robust stockholder outreach program through which we directly he
Slide 29: Refreshed Leadership Team Driving Strategic Evolution
REFRESHED LEADERSHIP TEAM DRIVING STRATEGIC EVOLUTION George Sherman – CEO (Started April 2019) § Previously CEO of Victra, largest exclusive authorized retailer for Verizon Wireless § President and Interim CEO of Advance Auto Parts § Senior leadership roles at Best Buy, Home Depot and Target Jim Be
Slide 30: Highly Qualified and Experienced Directors
HIGHLY QUALIFIED AND EXPERIENCED DIRECTORS ü Mr. Kelly brings to the Board extensive board experience as well as more than 25 years of leadership in the communications and wireless industries. His broad business knowledge brings valuable insight in supporting our strategic initiatives. ü Mr. Kelly s
Slide 31: Highly Qualified and Experienced Directors
HIGHLY QUALIFIED AND EXPERIENCED DIRECTORS ü Mr. Sherman brings to the Board more than 25 years of experience in the retail industry, having served in senior management positions overseeing merchandising, marketing, supply chain, store operations, e-commerce and business development. ü Mr. Sherman j
Slide 32: Highly Qualified and Experienced Directors
HIGHLY QUALIFIED AND EXPERIENCED DIRECTORS ü Ms. Teffner brings to the Board more than 30 years of financial and operational leadership experience in the consumer goods and retail industries, which provides valuable insight in support of our strategies. ü Ms. Teffner serves as Chair of the Audit Com
Slide 33: Highly Qualified and Experienced Directors
HIGHLY QUALIFIED AND EXPERIENCED DIRECTORS ü Mr. Simon brings to the Board more than 30 years of operational and strategic advisory experience in the retail, consumer and food and beverage industries. ü Mr. Simon serves on the Audit Committee. William Simon ü Mr. Symancyk brings to the Board more th
Slide 34: Director Qualifications and Experience
DIRECTOR QUALIFICATIONS AND EXPERIENCE George Jerome Lizabeth Raul Reginald Thomas William James Carrie Kathy Qualifications and Experience Sherman Davis Dunn Fernandez Fils-Aimé Kelly Simon Symancyk Teffner Vrabeck Business experience in a senior leadership position provides the üüüüüüüüüü perspect
Slide 35: Conclusion
GameStop POWER TO THE PLAYERS® Conclusion
Slide 36: Vote FOR All of the Board's Nominees on the Blue Proxy Card
VOTE FOR ALL OF THE BOARD’S 10 NOMINEES ON THE BLUE PROXY CARD ü GameStop has a new management team and a newly refreshed Board, with the majority of directors added since April 2019 ü The Board undertook an extensive review of strategic alternatives, sold non-core assets, and recruited a new leader
Slide 37: Appendix
APPENDIX 37 37APPENDIX 37 37
Slide 38: Director Bios
DIRECTOR BIOS George E. Sherman is the chief executive officer of GameStop. He was appointed to this role in April 2019. George is a member of GameStop’s Board of Directors, a seat he has held since April 2019. George brings to GameStop more than 25 years of senior management experience serving in a
Slide 39: Director Bios
DIRECTOR BIOS Carrie Teffner is a director and was appointed to the board in 2018. Carrie is chair of the Audit Committee and brings 30 years of financial leadership and experience in the consumer products and retail industries. Carrie has served as Executive Vice President and Chief Financial Offic
Slide 40: Director Bios
DIRECTOR BIOS Bill Simon has more than 30 years of operational and strategic advisory experience in the retail, consumer and food and beverage industries. Since 2014, he has served as a Senior Advisor at KKR & Co. Mr. Simon previously served in multiple leadership roles at Walmart Inc. from 2006 to
Slide 41: Non-GAAP Measures
NON-GAAP MEASURES The following table reconciles the Company’s adjusted SG&A and adjusted operating income to its nearest GAAP measure (in millions): Fiscal Year Fiscal Year 2019 2018 Adjusted SG&A SG&A $1,922.7 $1,994.2 Transformation costs -37.9 — Business divestitures -10.8 — Severance and other
Slide 42: GameStop
GameStop POWER TO THE PLAYERS®