Signage is displayed as a buyer browses at a GameStop Corp. retailer in West Hollywood, California.
Patrick T. Fallon | Bloomberg | Getty Pictures
GameStop is planning to shut between 180 and 200 underperforming shops by the tip of its fiscal yr.
The announcement Tuesday got here after the corporate posted dismal fiscal second quarter earnings after the bell that missed analysts’ expectations and slashed its same-store gross sales forecast for the yr.
It stated it now expects same-store gross sales to fall within the low teenagers, in contrast with earlier expectations of a lower between 5% and 10%. The corporate’s inventory was down 11.1% to $4.52 midafternoon Wednesday. The shares have fallen greater than 60% yr up to now.
“Optimizing our store base for an increasingly digital world is essential for the future and increasing the profit productivity,” CEO George Sherman stated in an earnings name with analysts Tuesday. “However, we know we have the opportunity to do even better and expand profitability by de-densifying our store footprint in some markets. We are committed to both closing loss-making locations, as well as maximizing profit productivity through capturing sales and profit transfer in stores with overlapping trade areas.”
Sherman famous that the typical lease lifetime of a GameStop retailer is just two years, and he stated the corporate will make selections to restrict value implications.
The corporate at the moment operates greater than 5,700 shops throughout 14 nations, in response to the earnings report. The ccompany’s CFO, Jim Bell, additionally stated GameStop has closed 195 shops because the second quarter of final yr.
Customers are more and more turning to digital avenues for gaming, akin to on cell or computer systems. They’re additionally utilizing e-commerce websites like Amazon to buy video games. However GameStop stated it plans to optimize its shops for the shift towards digital. Sherman stated it launched a brand new GameStop.com platform, and a brand new purchase on-line, choose up in retailer choice.