Today during its new earnings call, GameStop announced that it will be closing between 180 and 200 “under-performing” stores around the world between now and the end of 2019. Despite a struggling year, GameStop claims that of its 5,700 stores worldwide, 95 percent of them were profitable this past quarter. In other words, it’s trimming the fat and closing the doors of stores that haven’t been as profitable. And these 180 to 200 closures are just the beginning of the much larger plan that will see even more closures over the next two years.
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“While that is an impressive statistic, we have a clear opportunity to improve our overall profitability by de-densifying our chain,” said a GameStop representative. “That work is well underway. We are on track to close between 180 and 200 underperforming stores globally by the end of this fiscal year. And while these closures were more opportunistic, we are applying a more definitive, analytic approach, including profit levels and sales transferability, that we expect will yield a much larger tranche of closures over the coming 12 to 24 months.”
During its last quarter, GameStop posted a net loss of $415 million, continuing its decline and its decreasing market value. However, despite this, GameStop has some bullish plans apart of its “Reboot,” which includes partially shifting to a focus on esports and retro gaming. That said, GameStop isn’t expecting profits anytime soon, however, this could change with the new console generation coming next holiday season.
“We expect our year-over-year sales to be down over the next three to four quarters reflecting the end of [the console] cycle,” added the rep. “Compounding this negative impact on sales is the fact that console makers have confirmed the launch earlier than they have in the past. We anticipate that this will lead to much lighter title slate through the rest of 2019 and early 2020 given the end of the cycle timing for current consoles.”
GameStop also pointed at a weak holiday line-up this year, which doesn’t feature a huge game like last year’s holiday line-up did with Red Dead Redemption 2. According to the games company, this will impact its performance as well.
Thanks, Games Industry.
