GameStop Gaming Retailer Announces Around 200 Store Closures
GameStop, the gaming retailer has announced the closure of stores in the next six months.
The gaming retailer will be closing around 180 to 200 stores soon. The chain has around 5,700 stores located in many countries.
Around 195 stores have faced closures over the past months and many more are expected to come in one or two years, says the company.
The company calls the closure as “de-densification” by which the more profitable ones are kept open. Stores that overlapping in the same areas will be closed down so that the company can concentrate on the profitable stores. This will help the company to optimize its store portfolio.
The company has been going through trying times recently. There have been major executive departures which have hampered the performance of the company. Sales have deteriorated which have reduced profits. Stock prices have been crumbling and earnings report does not look good.
Stock prices of GameStop have dropped drastically trading at $4.65 currently. This is almost 70 percent down on a year-on-year basis. It is down from its 2013 high levels by 92 percent.
GameStop which was into selling games now wants to branch into other areas too. It is planning to introduce a “cultural and social hub of gaming” near each of its stores. Through this perspective, it intends to bring in-store gathering of people so that gamers can gather in a physical space together.
CEO George Sherman says that the GameStop locations will slowly remodel along these lines in key locations. A new sales model will be created, which will help in customer acquisition.
CFO Jim Bell of GameStop says that 95 percent of the retail stores are showing positive earnings and the chain will continue profitably. The bottom has not fallen from the chain store as yet, he says.
Sherman expects things to turn from next year when customers would start coming in for new consoles.