Struggling video game retailer and infamous meme stock GameStop has announced that it intends to close a significant number of its stores across the United States, after closing 300 stores the previous year. “GameStop has virtually no chance of returning to profitability in its core business,” said one analyst.
of daily mail report GameStop, the famous video game retailer, is facing a difficult time as it faces declining sales and profitability. The company recently announced plans to close a significant number of its stores across the United States, following the closure of 300 stores last year. The number of stores that will close is not yet known. The move was made as part of GameStop's comprehensive store portfolio optimization review aimed at streamlining operations and adapting to the changing retail landscape.
Net sales decreased 20% and are now $860 million compared to $1.08 billion in 2023, according to the company's SEC filings. As Wedbush analysts note, GameStop's core business continues to decline, even though it still generates revenue. They said there is “virtually no prospect that GameStop will return to profitability in its core businesses.”
The exact location of the planned closure has not yet been determined as the company's review process is still ongoing. However, GameStop expects the number of store closures may be higher than usual. The retailer, founded in 1984, has struggled to maintain its foothold in the market as consumers increasingly shift their gaming needs to digital downloads, streaming services and online shopping.
In March, GameStop reported that it had closed 287 stores worldwide over the past 12 months, reducing its physical store count to just over 4,000. The announcement sent the company's shares down 15%, and they fell another 7% in September. With more stores expected to close, GameStop is considering introducing new services and products to expand its market reach.
One such initiative is a collaboration with Collector's Holdings through its Pro Sports Authenticators (PSA) division, which allows GameStop to become an authorized PSA dealer. The partnership will allow the retailer to offer trading card authentication and grading services in select stores nationwide. However, Wedbush analysts remain skeptical about the impact this new addition will have on the company's overall performance, following “failed attempts at omnichannel strategy and NFT trading.” points out.
Analysts also highlighted a significant drop in annual revenue, with hardware and accessories sales down 28% and software sales down 15%. Additionally, collectibles sales were down 3.7%, according to Retail Dive.
Outside of the United States, GameStop also announced plans to cease operations in Germany by the end of this year. The company has also slowed down its activity in Italy, after completely withdrawing from Ireland, Austria and Switzerland in 2023.
GameStop was the epicenter of the 2021 meme stock boom, resulting in severe losses for financial firms that had bet on the company's future. In June of this year, the company's stock skyrocketed based on meme stock trading.
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Lucas Nolan is a reporter for Breitbart News, covering free speech and online censorship issues.
