GameStop has announced plans to close more stores in the face of declining sales.
The retailer said it is having a hard time selling new and used video game discs in stores as Americans turn to digital downloads, streaming and online shopping.
Following the announcement of its second-quarter earnings this week, bosses said they are identifying stores to close.
It is worrying that they said they would close more outlets than they have closed in recent years.
In March, GameStop announced it had closed 287 stores worldwide over the previous 12 months, leaving it with just over 4,000 physical locations.
GameStop was at the center of the “meme stock” trading frenzy during the Covid-19 pandemic, which sent its shares to dizzying highs, but it has been struggling with sales and profitability.
GameStop has announced plans to close more stores due to declining sales
GameStop shares fell 15 percent after its earnings report on Wednesday and are down more than 7 percent over the past month.
The video game retailer reported a 31 percent drop in quarterly revenue, sparking fears among investors that the company will not be able to turn things around despite store closures.
GameStop has already closed all its physical stores in Ireland, Switzerland and Austria.
Revenue for the quarter ended Aug. 3 was $798.3 million, compared with $1.16 billion a year earlier.
However, it did make a rare profit: $14.8 million compared with a loss of $2.8 million the year before.
GameStop shares have seen significant volatility this year after online stock influencer Keith Gill, also known as “Roaring Kitty,” returned to social media after a three-year hiatus, sending the stock up 119 percent.
It later plunged 40 percent after Gill’s livestream failed to spark investor interest. Reuters reported.
GameStop isn’t alone in announcing mass store closures as the U.S. faces a growing “retail apocalypse” that sees stores struggle with consumer pushback and ever-tightening margins.
Earlier this week, major retailer Big Lots filed for bankruptcy, raising questions about the future of its 1,400 stores.
GameStop shares fell 15 percent after its earnings report on Wednesday and are down more than 7 percent over the past month.
GameStop, which was at the center of the “meme stock” trading frenzy during the Covid-19 pandemic that sent its shares to dizzying levels, has been struggling with sales and profitability.
GameStop has already closed all of its physical stores in Ireland, Switzerland and Austria (pictured: a store in Dublin, Ireland)
Discount home goods retailer Big Lots has filed for bankruptcy after years of declining sales and store closures (pictured: store closing in Manassas, Virginia)
The United States is facing a growing “retail apocalypse” that is seeing stores struggle with consumer pushback and ever-tightening margins.
There were almost 2,600 store closures in the first four months of 2024If this trend continues, almost 8,000 people will have been lost by the end of the year.
Deal stores like Big Lots and also dRetail stores have been particularly hard hit.
For example, 99 Cents Only announced in April that it would close its 371 locations in California, Texas, Arizona and Nevada.
Meanwhile, 1,000 stores owned by Family Dollar and its sister company Dollar Tree will close over the next three years.
In recent months, Walmart has also closed three of its underperforming branches. Best Buy closed ten in March.
In addition, Macy’s will close 150 stores over the next three years, including the closure of 55 this year.
Pharmacy Rite Aid has said it will close more than 800 stores after filing for bankruptcy. Most of these cases have occurred in just two states, and customers are rushing to find a new pharmacy in Michigan and Ohio.
