Can retail be rescued? Why so many U.S. stores are closing
After reporting a dismal second quarter, GameStop CFO James Bell said the company is looking to close between 180 to 200 of its stores by the end of its fiscal year with the possibility of more in the future.
The statement came in Tuesday’s quarterly earnings call where the company also reported an overall 14.3% decrease in sales, representing a loss of $32 million for the second quarter. By Monday morning, shares of GameStop stock were trading for $4.49.
During the call, Bell said the company’s strategy in store closures would consider factors beyond underperforming sales, including whether areas are oversaturated with stores and the feasibility of transferring or merging existing stores.
“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.”
The announcement of closures comes one month after the GameStop announced it would lay off 120 employees, about 14 percent of the workforce in its corporate office.
GameStop has been struggling for the past five years, facing the same problems that face all brick-and-mortar stores. Earlier this year the company announced major partnerships with e-sports organizations in an effort to make a footprint in the growing e-sports arena. It’s not yet clear if this strategy has paid off.