GameStop to Close 300 More Stores This Year

GameStop will close another 300 stores after shutting down 321 retail locations in 2019. 

“In 2020, we will continue our work to de-densify our global store fleet and anticipate store closures to be equal to or more than 320 net closures we saw in fiscal 2019 on a global basis,” CFO Jim Bell said in an earnings call on Thursday. 

GameStop currently has 5,500 stores across 14 countries, but the retail locations have struggled to compete against digital video game purchases. For fiscal 2019,  the stores reported a year-over-year sales drop of 19 percent. As a result, the video game retailer last year began shutting down stores to save on costs. The same move in 2020 unfortunately means more layoffs for company employees. 

During the earnings call, no mention was made of which stores will close. But GameStop says it’s been winding down operations in Denmark, Finland, Norway, and Sweden and plans to exit these markets by late July, which the company projects will help it save more than $50 million. 

The cost-cutting comes as GameStop has been trying to rake in sales in the face of the coronavirus pandemic. Last week, the company sparked controversy for keeping its US stores open even as several major cities ordered lockdowns. In response, GameStop claimed it was an “essential” business and should remain open, despite the risks to employees and in-store customers.  

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The company has since reversed course and temporarily shut down GameStop stores in the US. “We have temporarily closed our storefronts moving to curbside pickup at stores to facilitate online and pick-up-in-store orders and e-commerce deliveries only,” GameStop CEO George Sherman said during the earnings call. 

To help improve earnings, the company plans on selling more “higher-margin” products, including PC gaming peripherals. “In 2019, we expanded our PC gaming business in the stores and we’ll continue to expand our offering in 2020 and beyond, as we cater to all the needs of our gaming customers,” Sherman added.

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