GameStop has announced that it plans to close more stores due to declining sales.
The retailer says it is struggling to sell new and used video game DVDs in stores as Americans increasingly opt for digital downloads, streaming and online shopping.
After announcing second-quarter results this week, bosses said they are looking for stores to close.
What is worrying is that they will close more outlets than has been the case in recent years.
In March, GameStop announced that it had closed 287 stores worldwide in the past 12 months, leaving the company with just over 4,000 physical stores.
GameStop has been at the center of the “meme stock” trading frenzy during the Covid-19 pandemic, sending shares to dizzying heights. Yet the company has struggled with revenue and profitability.
GameStop has announced that it plans to close more stores due to declining sales
GameStop shares fell 15 percent after Wednesday’s earnings report and are down more than 7 percent over the past month.
The video game retailer reported a 31 percent drop in quarterly revenue, raising concerns among investors that the company will not be able to turn its business around despite store closures.
GameStop has closed all of its physical locations in Ireland, Switzerland and Austria.
Revenue for the quarter ended Aug. 3 was $798.3 million, compared with $1.16 billion a year earlier.
A rare profit was made: $14.8 million, compared to a loss of $2.8 million a year earlier.
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 soaring 119 percent.
Later, the share price plummeted 40 percent after Gill’s livestream failed to capture investor interest. Reuters reported.
GameStop isn’t alone in announcing mass store closures. The U.S. is facing a growing “retail apocalypse,” with stores struggling with declining consumer traffic and shrinking 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 Wednesday’s earnings report and are down more than 7 percent over the past month.
GameStop, which has been at the center of the “meme stock” trading frenzy during the Covid-19 pandemic that sent shares soaring to dizzying heights, is struggling with sales and profitability
GameStop has closed all of its physical locations in Ireland, Switzerland and Austria (Pictured: a store in Dublin, Ireland)
Home goods discounter Big Lots has filed for bankruptcy after years of declining sales and store closures (Pictured: A store closing in Manassas, Virginia)
The US is facing a growing “retail apocalypse,” with stores grappling with declining consumer engagement and ever-tightening margins.
In the first four months of 2024, there were almost 2,600 store closuresIf this trend continues, nearly 8,000 people will have died by the end of the year.
Bargain stores like Big Lots and dSupermarkets in particular have been hit hard.
For example, in April, 99 Cents Only announced that it would close all 371 of its locations in California, Texas, Arizona and Nevada.
Meanwhile, there are 1,000 Family Dollar stores and sister company Dollar Tree will close over the next three years.
In recent months, Walmart has also closed three of its underperforming locations, while Best Buy closed ten in march.
Additionally, Macy’s is closing 150 stores over the next three years – including the closure of 55 stores this year.
Drugstore Rite Aid has said it will close more than 800 stores after declaring bankruptcy. Most of these cases occurred in just two states, with customers in Michigan and Ohio flocking to find a new pharmacy.