History
GameStop traces its roots to Babbage's, a small software retailer that started in Dallas, Texas in 1984. The movements that made Babbage's into GameStop started in 1994 with a series of mergers between Babbage's and several other software retailers. A merger with FuncoLand stores (who owned Game Informer magazine) followed in 2000, as well as one with Electronics Boutique in 2005. Internationally, there was a merger with the Gamesworld franchise in Ireland and in the United Kingdom in 2008, and a merger with French-based Micromania.
When Babbage's first merged with Software Etc. in 1994 the combined company was named NeoStar Retail, but the two halves continued to operate as if they were separate entities.
The combined management of the newly formed entity developed a classic case of the right hand not knowing what the left was doing. This ultimately caused NeoStar to go into Chapter 11 reorganization in early fall of 1996. At this point the company had approximately 800 stores in the United States. Several potential buyers of NeoStar's assets emerged.
On the last day of the manager's conference there was a special guest during the meeting. Leonard Riggio, the head of Barnes & Noble, announced that he and a group of investors were going to put in place the financing to keep the company afloat, and get new merchandise into the stores in time for Christmas (at this point, the company's creditors were owed so much back revenue that they were no longer shipping anything to NeoStar).
In a personal comment during the address, Riggio stated that he "hated" the name NeoStar Retail, and thought that the merged Babbage's/Software Etc. should have been called Babbage's Etc. He said should his buyout bid be successful that the company would be renamed.
From the potential buyers, the judge desired to accept the offer from the one that would keep the most people working, preserve the most competition and consumer choice, and be the most stable. Ultimately, Riggio's offer was accepted on the day before Thanksgiving. Barnes & Noble, through B. Dalton, was the original owner of Software Etc. A new management team largely composed of former Software Etc. executives and longtime associates of Len Riggio was put in place to run Babbage's.
On November 12, 2004, GameStop spun off from Barnes & Noble; at that point the company had approximately 800 stores in the United States. Due to Riggio's involvement, GameStop and Barnes & Noble employees still received employee discounts at each others' stores, despite the companies being completely separate; both companies chose to terminate this arrangement on September 1, 2010.
In October 2009 Leonard Riggio, chairman of the board at Barnes & Noble and director at GameStop sold 2.3 million shares of GameStop for $60.2 million. Riggio still retains 9.1 million shares in the game retailer.
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