GameStop Expects to Close Over 300 Stores Throughout 2020
In a financial call, GameStop revealed that over 300 stores are expected to close to "de-densify" the company's roster of locations.
Within the past few years, GameStop has notably found itself in a difficult business situation on multiple fronts. From facing heavy competition from other retailers like Amazon to an increasing push in the games industry towards digital games purchases, GameStop has faced huge challenges to diversify its business and retain sales of physical games and hardware, with more store closures from the company expected in the coming year to help sustain growth and healthy business.
In a report from Gamasutra, a recent earnings and financial call from GameStop’s executive vice president and CFO Jim Bell detailed that the company expects to close at least 320 store locations throughout 2020. If more than 320 locations are closed by the end of the year, it would surpass the amount of stores that were closed by the company in 2019.
According to Bell, the store closures in 2020 are part of an effort to “de-densify our store base” and “[focus] on maximizing product productivity of the entire fleet.” Bell stated that he expects the number of store closures in 2020 to at least match those of 2019, but emphasized 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.” So far, the closures seem to have aided GameStop’s restructuring efforts and are helping to “positively impact both sales and earnings growth” by reducing the number of stores and consolidating sales among fewer locations.
Importantly, Bell noted that these initial closures don’t seem to be tied to any economic impact from the coronavirus pandemic, which may remain to be seen what effect it will have on the company in the coming months and weeks. GameStop recently drew heavy criticism for its business practices in the midst of the coronavirus pandemic, including claiming to be an “essential” business and putting both its employees and customers at risk of infection. Following these claims, GameStop stores across the country have begun to close until further notice by government mandate, including in California and other parts of the US.