GameStop closes 180-200 "underperforming" stores globally this year
Several planned store closures over the next 12-24 months as part of ongoing business restructuring
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During today's GameStop Q2 revenue call, the company announced it would close between 180 and 200 "underperforming" stores globally between now and the end of the year.
During the conversation, GameStop CFO James Bell famously praised the company's over 5700 stores worldwide and stated that 95% of them were profitable. Nevertheless, the company is beginning to draw up an ongoing plan that will also result in even more store closures over the next two years.
"Although it is an impressive statistic, we have a clear opportunity to improve our overall profitability by -densifying our chain," he said. "This work is well underway. We are well on our way to closing between 1[ads1]80 and 200 underperforming stores globally by the end of this financial year. And although these closures were more opportunistic, we use a more definitive, analytical approach, including profit levels and "
Bell also said that the company would look at alternatives to unprofitable business segments, especially internationally, even if it did not specify which segments it was.
This comes as part of GameStop's "Reboot" plan, which was a main focus of the Q2 results report (where it had a net loss of $ 415 million and an adjusted net loss of $ 32 million) then the company struggles to regain momentum after a challenging year of financial losses, unsuccessful corporate sales and consolidation. As part of the same plan, 50 employees lost their jobs in early August, and another 120 were laid off later this month, including seven members of the Game Informer staff. The company has also recently moved ThinkGeek in with GameStop properly and announced several new plans for stores including back-focused and esports-driven locations.
Despite all of these changes, GameStop is unlikely to see any gain increases for some time to come, with Bell blaming this at the time of the end of the current console generation.
"We expect our year-over-year sales to be down over the next three to four quarters, reflecting the end of the [the console] cycle," he said. "Compounding this negative effect on sales is the fact that console manufacturers have confirmed the launch earlier than they have previously. We expect this will lead to a much easier title list throughout the rest of 2019 and early 2020 given the end of the cycle timing for current consoles .
"As a result, we expect at this time that a percentage decline of comparable sales in the same store for 2019 will be in the low teens, which includes a difficult comparable sales challenge from last year when we & # 39; up against blockbuster titles like Red Dead Redemption 2, 2018's number one volume title, without a comparable launch in 2019. "
For the record: We have changed the article above to specify that the speaker at the call was CFO James Bell .
