GameStop reveals plans to close 450 stores
GRAVEVINE, Tex. — GameStop reveals in a recent investor call that they will be closing more stores than in their initial plan. Company executives did reveal that they will close an additional 100 stores than in their current restructuring plan. Per the restructuring plan, the company had plans to close 300 underperforming stores permanently. However, this number is increasing since the investor brief in March.
Store closures to continue through 2021
When asked regarding a timeframe for these additional store closures, GameStop CFO Jim Bell hinted that these closures would continue through 2021.
The company, as a result of the store closures, has been focusing more on online retail sales. In their report, they revealed that online sales would increase by 800%. Unfortunately, this was less than expectations from analysts.
Company woes may be linked to the pandemic and fiscal issues
A contributor to this could be attributed to the COVID-19 pandemic which would result in stores closing temporarily across the U.S. The company is pinning its financial recovery on next-gen console sales and online sales. Prior plans for themed stores were delayed by complications relating to the pandemic. The company did mention on the earnings call that they had much fiscal uncertainty due to the pandemic. However, the crisis has led to a 2 percent increase in sales in recent months.
Despite issues, the company earned a profit in the fourth quarter of 2019. Overall, its net loss for the 2019 fiscal year would decline from $673 million to $471 million.
The call would also mention the company’s media outlet, GameInformer, which did experience layoffs last year. The company is planning to build value through “interactive digital media,” but they did not go into specifics on those plans. It is unknown if there’s intentions to resume print publication.
Currently, the company decided to close its stores in accordance with CDC guidelines. This was after the company was under fire for deeming its outlets as an “essential” business and keeping the doors open during the pandemic.
The retailer currently has 5,500 operational stores across the U.S.
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