In 1994, baseball pitcher Bill Lee told filmmaker Ken Burns about his baseball card collection as part of Burns’ sprawling documentary. “I could take all my Mickey Mantle and other Yankees, Moose Skowron, and I could put them on my bike, and I could ride down the hill and make me sound like I was going faster,” Spaceman recounted. That sound it made? “There’s goes $5,200, $5,200 burning down the highway.”
These days, if publicly traded retailer GameStop has its way, the young Bill Lees of today won’t be sticking cards on their bicycle spokes; instead, they’ll be riding down to their local GameStop, getting them graded by PSA and trading them in. The retailer, better known for selling new and used video games and for meme stock celebrity during the pandemic, announced last week during its annual meeting that it is expanding its collectibles business.
“The trading card market—whether it’s sports, Pokémon or collectibles—is aligned with our heritage. It fits our trade and model, it appeals to our core customer base and it’s deeply embedded in physical retail,” CEO Ryan Cohen said in prepared remarks at the meeting. “Unlike software it’s tactile. Unlike hardware, it has high margin potential. It’s a logical expansion.”
It’s hard to say what a greater emphasis on collectibles will look like for GameStop. Cohen didn’t take questions at the annual meeting, and the company hasn’t held calls public calls or investor presentations in 18 months, according to data compiled by S&P Global Market Intelligence.
Since last fall, GameStop has been a partner with PSA, the Steve Cohen-owned trading card grader, accepting cards at 1,360 of its 3,200 stores and shipping them to PSA for scoring. A recent visit to a typical GameStop—located in a strip mall storefront in Topsham, Maine—found plenty of collectibles that probably have a future in landfills instead of auction houses: mass produced Funko Pop! figurines, other movie and athlete action figures and a selection of t-shirts. There were no card-grading services or trading cards displayed.
Still, one GameStop executive who requested anonymity because they weren’t authorized to speak publicly on collectibles said stores will start adding dedicated space for sports cards, trading card games and trade-and-play events for collectors to gather. The company probably will do more “Power Packs” as well, which feature a surprise mix of cards, including one PSA-graded piece scoring 8 or higher. The company debuted them in April and they sold out opening weekend. GameStop is also adding PSA services to another 280 stores after taking its one millionth PSA grade order in early May, according to the executive. Collectibles, it seems, are the one bright spot in GameStop’s business.
“GameStop’s foray into the trading card business appears to be the only recent business venture to see modest success. We see no potential for a rebound in GameStop’s core business,” Michael Pachter, an analyst at Wedbush Securities, said in a June 11 research note. Collectibles—broadly defined by the store as including cards, toys, apparel and homewares—saw a 55% jump in sales in the first quarter to $211.5 million. GameStop’s other two business lines of hardware and software fell 30% to $520.9 million.
Still, the chain isn’t firmly focused on collectibles, with management seeming intent on recapturing its meme stock mojo. Its more recent business expansion: buying bitcoin. This spring, the company began amassing the digital currency, owning 4,710 as of the end of May, according to Pachter, who rates the stock “underperform,” the equivalent of a sell rating. “GameStop has consistently capitalized on the existence of ‘greater fools’ willing to pay more than twice its asset value for its shares—and so far, they’ve been correct.”
But collectibles could be an avenue for the chain to reinvent itself, says Sam Holland, the chief operations officer at Culture Kicks, a social-media focused seller of collectible sneakers unaffiliated with GameStop. “What I have found as a collector in general is that with cards you’re either going to card shows or you’re buying something off eBay,” he said on a phone call.
The retail location aspect could provide the chain with a crucial edge: a place for collectors to meet up regularly. “Fanatics has their clothing pop-ups, but nothing dedicated to cards, and CardVault by Tom Brady has [just] six locations.” Potentially a closer business tie-in with PSA or Fanatics could capitalize on having so many storefronts, said Holland, a possibility given the company now has about $8 billion in cash on hand after raising $2.25 billion in a debt offering last week.
Still, for now it doesn’t seem GameStop is using its cash heft to become a force in high-end cards. Its online appraisal system, in which collectors enter their PSA serial number and get a cash offer on their cards, rejected a number of pricey cards entered, including a 1987 Michael Jordan Fanatics Collect that is selling for $50,000, or any of the coveted Mickey Mantles that eluded Bill Lee’s spokes.
The company also wouldn’t be a buyer of a Honus Wagner card that closed at auction Saturday. Ostensibly that’s because the card, known as the Connecticut Wagner, is scored under 8 by PSA, the minimum condition GameStop considers. But it too would probably be too expensive for the video game chain. The latest Wagner to go to auction quickly gathered 27 bids that raised the price to $3.7 million on its first day of bidding on May 28. But enthusiasm, or perhaps just deep pockets, ran short. The card didn’t meet its undisclosed reserve price and didn’t sell, according to the Goldin website.
“Goldin is appreciative of the opportunity to offer such a historic card,” founder Ken Goldin said in an email. “Our consignor had very high requirements in order to let it go, and unfortunately those requirements were not met despite bids that were placed by our clients that would have placed this as the highest priced PSA 1 ever sold.”
