Fortune magazine recently paid a visit to GameStop’s sprawling Refurbishment Operations Center located off William D. Tate Avenue in Grapevine, and apparently was impressed by what they saw.
In an interview with GameStop’s CFO Rob Lloyd posted online at Fortune.com, the business magazine called the R.O.C. — where the video game retailer repairs, refurbishes and repackages used video games, consoles, iPhones and iPods for resale at its 4,000 U.S. stores — the company’s “secret weapon” in fending off Walmart’s recent incursion into used video games.
“The profit margins on pre-owned items are in the 42-48 percent range — compared to about 29 percent overall for the retailer — so the business is key to GameStop,” wrote Fortune’s Phil Wahba.
Said Lloyd: “You have to be able to refurbish the goods because 15 percent, maybe 20 percent, of what you get in trade in a store needs to be buffed if it’s a disc, or repaired if it’s a hardware system. To not do that, or hand that to a third party means you are giving away a big chunk of that margin that’s important to the business. The refurb center is also one of those barriers to [other’s] success.”
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You may recall that we took readers inside The R.O.C. back in August. Here is our video.
-- Steve Kaskovich