GameStop will close as many 200 stores before the end of 2019 following another quarter of sharply declining sales and a $32 million loss, the company stated.
In a statement yesterday, the company’s chief financial officer attributed the drop in sales to trends “consistent with what we have historically observed towards the end of a hardware cycle.”
That said, it’s yet another quarter with a double-digit decline, down 14.3 percent over the same one last year. For the quarter ending March 2019, GameStop reported a 13.3 sales decline and the company’s stock price plunged 40 percent in one day, recovering only slightly since then.
James Bell, GameStop’s chief financial officer, told investors that the closures will affect between 180 and 200 “underperforming” stores between now and the end of 2019. The company’s most recent annual report listed 5,830 locations worldwide, with more than 4,000 of them in the United States and Canada. In yesterday’s earnings call, Bell said that the vast majority — 95 percent — of stores were profitable. But more closures, in larger numbers than today’s news, are expected over the next one to two years, he added.
GameStop, despite being the largest dedicated video games retailer for most of the western world, has been in a prolonged decline broadly attributed to the rise of online sale and distribution of video games — which not only takes sales of new games out of brick-and-mortar stores, it eliminates the circulation of used games, GameStop’s longtime stock-in-trade. In April, Sony announced that it would no longer allow retail partners to sell download codes for PlayStation 4 games, further hurting GameStop’s position.
Last month, GameStop laid off more than 100 employees, including almost half the staff of Game Informer magazine, which GameStop has owned since 2000.