GameStop to Close More Than 300 North American Stores in 2020
GRAPEVINE, TEXAS — Video game retailer GameStop Corp. (NYSE: GME) plans to close more than 300 North American stores in 2020, the Grapevine, Texas-based company recently announced during its fourth-quarter earnings call.
GameStop did not specify which stores and markets would be affected by the closures, but said that it anticipates the total number of shuttered stores to be equal to or greater than the 320 stores that it closed in 2019.
GameStop saw its total comparable stores sales across the globe decrease 26.1 percent in the fourth quarter of 2019 relative to that period a year earlier.
Although the company reported a 2 percent increase in global comparable sales in March 2020 relative to March 2019, GameStop executives said that the market disruption caused by the outbreak of COVID-19 has prompted it to move forward with its “global de-densification” plan.
In fielding questions from analysts on the call, GameStop CEO George Sherman noted that although “every day brings a new challenge and new information as we navigate this very dynamic environment brought on by COVID-19,” the de-densification plan had been in effect prior to the healthcare crisis.
In particular, he said, the plan centered on the transference of revenue from underperforming stores to more profitable ones via footprint consolidation.
“We want to emphasize that these store closures are a very specific and proactive part of our de-densification plan and they are not related to recent business trends,” Sherman said. “Following several years of both organic and inorganic growth, this process is yielding profit synergies not heretofore realized. In that light, we expect these closures to positively impact both sales and for our EBITDA growth as we transfer sales to nearby stores.”
GameStop’s stock price opened at $4.94 per share on Monday, March 30, down from $10.37 per share a year ago. The company’s stores are currently closed to customer traffic as nonessential retail during the COVID-19 pandemic, but it has pivoted to offer deliver-at-the-door services.
— Taylor Williams