Hit hard by digital sales, GameStop is looking to close up to 150 stores this year
During its earnings report for the final fiscal quarter of 2016, retail chain GameStop announced declining sales in games and hardware, and that it could potentially close at least 150 of its 7,500 stores, according to The Wall Street Journal.
The company noted that that its total global sales declined 13.6 percent during the 2016 holiday season, because of “weak sales of certain AAA titles and aggressive console promotions by other retailers”. The chain announced that it “anticipates that it will close between two percent to three percent of its global store footprint” in 2017.
GameStop CEO Paul Raines pointed to digital sales as a reason for why video game and console sales have begun to slow for the company. New hardware sales fell 29.1 percent, while software sales fell by 19.3 percent. Despite those losses, Raines noted that “new hardware innovation in the video game category looks promising,” with consoles such as the Nintendo Switch selling out quickly. Nintendo plans to double their production this year due to high demand.
Despite the those losses, there were some bright points, and GameStop appears to be pivoting to adjust. The company saw its sales rise by 27.8 percent when it came to collectibles, particularly with Pokémon-related toys and apparel. According to Raines, GameStop’s “non-gaming businesses drove gross margin expansion and significantly contributed to our profits,” a trend that he anticipated would continue in the coming year. To that end, GameStop will be opening “approximately 35 new Collectibles stores globally, and approximately 65 new Technology Brand stores.”
via @The Verge