Only two months since Gamestop announced plans to reinvigorate its stores, the company has announced the upcoming closure of 180 to 200 stores around the world. In fact these stores will be closed before the end of the year, with more to come afterwards.
UPDATE – After talking with various Gamestop people, they have indicated to me that most of the 200 stores are located over seas. While there are a few stores located in the United States, they are stores located in close proximity to each other. For example two Gamestops in one mall. That is a very small number of the 200 though.
The company’s balance sheet has not looked healthy in recent times — its second quarter global sales decreased 14.3 percent, marking an adjusted net loss of $32 million. As such, GameStop CFO James Bell announced that up to 200 “underperforming” stores will be closed between now and the end of the year. In the company’s recent earnings call, Bell added that, “While these closures were more opportunistic, we are applying a more definitive, analytic approach, including profit levels and sales transferability, that we expect will yield a much larger tranche of closures over the coming 12 to 24 months.”
The outlook for the future of the coming isn’t good either. With the end of the current console generation near, and less than stellar title launches, Gamestop will be hurting for the foreseeable future.
One of the reason’s I am even writing about this is the fact that collectibles sales have been the lone bright spot for the company this year. In the first quarter of the year, collectibles sales were up 10.5% to $157 million. Top sellers in the collectibles category for Gamestop include Funko POP! figures, statues, and t-shirts.
Earlier this year Gamestop began expense reductions; tests of experiential retailing in a number of areas, including collectibles; focusing on decluttering stores to give more attention to the best sellers; and expanding its exclusive collectibles. All of this in an effort to help the troubled company stay profitable.
The sad thing is, local Gamestop stores are some of the only places in small rural towns to actually find Marvel Legends, Star Wars: The Black Series and other “collector’s grade” action figures. The closure of these stores leaves some of us with nothing left, but the dreaded Walmart to hang our hopes on.
Of course online retailers are always at our fingertips, but there is nothing like going into an actual store and putting hands on the figures before buying them. This gives you the opportunity to look through their inventory and cherry pick the figures with the best paint applications, ensuring that you are getting the figure that you want.
I have two local Gamestops, which really makes no sense thinking about the size of the community (roughly 16,000 people). Each one has its advantages over the other, in terms of me finding figures that I want. I now have to come to the realization that one or both will not be there in the near future.
Hopefully Gamestop can stop the bleeding, and the leadership at the company can devise a plan to pull out of this money pit before the whole company is gone.