GameStop To Close Up To 225 Stores Worldwide
A sharp decline in sales prompts GameStop to close stores.
Next time you try to trade in a used console, you might run into clearance sales--or an empty storefront.
Following a year of lower-than-expected sales capped off by a disappointing holiday season, GameStop announced that it anticipates shuttering 2-3% of its stores worldwide in a recent earnings report. Based on this figure, up to 225 of the company’s 7,500 stores worldwide could be facing closure.
The retailer's fourth-quarter profits in 2016 had dipped by 13.6% since those from the prior year, prompting its stock to plunge by 31%. These losses were made in sales of both new games and new consoles, which GameStop attributed to "aggressive console promotions by other retailers on Thanksgiving Day and Black Friday," as well as "weak sales of certain AAA titles."
As a potential silver lining, GameStop also reported a 27.8% increase in its collectibles sales over the year, mostly thanks to strong sales of Pokemon merchandise and the success of affiliate brands such as the geek-culture merchandiser ThinkGeek and the AT&T technology retailer Spring Mobile. Accordingly, it plans to open roughly 35 new collectibles stores and 65 new technology stores.