GameStop has announced plans to close stores across the country after closing another 300 locations last year.
The popular gaming retailer says net sales are down 20 percent and are now at $860 million – a drastic change from $1.08 billion in 2023.
Despite generating revenue, the company’s business has continued to decline, according to analysts at Wedbush, a financial services firm representing the retailer.
“GameStop has virtually no chance of returning to profitability in its core businesses,” Wedbush analysts said.
The store revealed in a filing with the Securities and Exchange Commission that the retailer has not yet decided exactly which locations will close its doors as its comprehensive store portfolio optimization review is still ongoing.
“While a specific set of stores has not yet been identified for closure, we expect that this (the review) may result in the closure of a greater number of stores than we have closed in recent years,” the company said.
The company – founded in 1984 – has had particular difficulty making sales new and used video game discs hitting stores as Americans turn to digital downloads, streaming and online shopping.
GameStop was also at the center of the ‘meme stock’ trading frenzy during the Covid-19 pandemic, which sent its shares to staggering levels – but it struggled with sales and profitability.
GameStop plans to close more locations soon after closing another 300 stores last year
In March, GameStop announced that it had closed 287 stores worldwide over the past 12 months, leaving just over 4,000 physical locations.
At the time, shares in GameStop fell 15 percent, and in September they fell more than seven seven percent.
With news of more stores on the verge of collapse, GameStop said it could introduce new services and products to increase the size of its market.
In October, the gaming retailer announced its partnership with Collectors Holdings through its Professional Sports Authenticator division, opening the door for the retailer to become an authorized Professional Sports Authenticator (PSA) dealer.
Through PSA, GameStop can offer trading card signature authentication and grading services at select stores nationwide.
Although the company has introduced the new addition, Wedbush analysts are skeptical that it will help the retailer stay afloat.
On Wednesday, the popular gaming retailer announced that net sales fell 20 percent to $860 million – a drastic change from $1.08 billion in 2023.
“The entry into the trading card market follows failed attempts at an omnichannel strategy and at NFT trading,” they said, referring to non-fungible tokens, or digital assets on blockchains, used for digital collectibles, gaming items , art and more. according to the website.
Analysts also noted how much revenue has fallen year over year, as hardware and accessories sales are down 28 percent, while software sales are down 15 percent.
Sales of collectibles also fell 3.7 percent, according to the report Retail dive.
“Sales continue to decline dramatically year after year as GameStop closes stores and more and more games are sold digitally,” the analysts explain.
In addition to cutting stores in the US, the retailer announced it will also shut down its operations in Germany by the end of this fiscal year.
GameStop also plans to slow down operations in Italy after completely exiting Ireland, Austria and Switzerland in 2023.
The store has particularly struggled to sell new and used video game discs in-store as Americans turn to digital downloads, streaming and online shopping
GameStop isn’t alone in announcing mass store closures as the U.S. faces a growing “retail apocalypse,” with stores struggling with consumer withdrawal and increasingly tight margins.
In the first four months of 2024, there were almost 2,600 store closures. If this trend continues, nearly 8,000 people will be lost by the end of the year.
In October, it emerged that Walgreens will close more than 1,200 stores in an effort to get the struggling chain back on its feet.
The same month, Big Lots said it would close 500 stores in multiple states as its financial problems worsen.
Meanwhile, Badcock Home Furniture & More said in late July that it is closing all of its 380 stores across the South after filing for bankruptcy earlier this year.
Well-known party and craft store Party City recently faced the possibility of mass closures, just over a year after the company emerged from Chapter 11 bankruptcy.