GameStop has revealed during their recent Q2 earnings call that they're closing between 180 and 200 stores that are "underperforming", as reported by GamesIndustry.biz, with this taking place before the end of the year.
CFO James Bell said that 95% of stores are profitable, but that these closures would be followed by more over the next two years as part of an ongoing plan.
"While that [95%] is an impressive statistic, we have a clear opportunity to improve our overall profitability by de-densifying our chain," he said. "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."
This ongoing "reboot" plan comes after 50 employees lost jobs at the start of August, with another 120 gone later in the month, including Game Informer employees. Looking ahead, GameStop plans new stores with a retro focus and attention to esports.
"We expect our year-over-year sales to be down over the next three to four quarters reflecting the end of [the console] cycle," Bell adds. "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.
"As a result, at this time we expect a percentage decline of comparable same-store sales for 2019 to be in the low teens, which includes a difficult comparable sales challenge from last year, as we're up against blockbuster titles like Red Dead Redemption 2, 2018's number one volume title, without a comparable launch in 2019."
What does GameStop need to do?
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