GameStop Shuttering 200 Stores This Year, “Much Larger” Slate of Closures to Come
For better or worse, it may be time to say goodbye to your neighborhood GameStop. The ubiquitous video game retailer has struggled to find its footing following years of sliding sales and a failed buyout, and their Q2 2019 earnings report offered no respite. GameSpot’s Q2 sales were down 14 percent year-on-year, contributing to a loss of $415 million for the quarter. As a result, the company announced they’ll be closing 180 to 200 underperforming stores before the end of this year, with the possibility of many more closures in the next 24 months. Here’s what GameStop CFO James Bell had to say about the company’s “reboot”…
We have a clear opportunity to improve our overall profitability by de-densifying our chain. 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.
GameStop insists 95 percent of their stores are still profitable, so perhaps things aren’t as dire as they seem, but it’s hard to ignore the Blockbuster Video vibes coming from the company at the moment. Video games and the ways they’re purchased and consumed are changing rapidly, and I just don’t see GameStop being able to keep up unless they radically change their business model. They’ll likely get a boost when the next Xbox and PlayStation are released in 2020, but I don’t expect that to last.
What do you think the future holds for GameStop? Can the company find a way to survive? Will you miss the GameStop experience or will you be happy to see them go?