GameStop has announced plans to shut down stores across the country after closing 300 locations just last year.
The popular gaming retailer says net sales have fallen 20 percent, now sitting at $860 million – a drastic change from its $1.08 billion in 2023.
Despite generating income, the company’s operations have continued to decline, according to Wedbush analysts, a financial services firm that represents the retailer.
‘GameStop has virtually no chance of returning to profitability in its core business,’ Wedbush analysts said.
The store revealed in a filing with the Securities and Exchange Commission that the retailer has not yet decided exactly what locations will close its doors as its comprehensive store portfolio optimization review is still underway.
‘While a specific set of stores has not been identified for closure, we anticipate that it [the review] may result in the closure of a larger number of stores than we have closed in the past few years,’ the company said.
The company – founded in 1984 – has notably struggled to sell new and used video game discs in-store as Americans shift toward digital downloads, streaming and online shopping.
GameStop was also at the center of the ‘meme stock’ trading frenzy during the Covid-19 pandemic which sent its stock to dizzying levels – but it has been struggling with sales and profitability.
GameStop plans to shut down more locations soon after closing 300 stores just last year
In March, GameStop announced it had closed 287 stores worldwide over the previous 12 months, leaving it with just over 4,000 physical locations.
At the time, shares in GameStop tumbled 15 percent, and were down more than seven seven percent in September.
With news of more stores set to collapse, GameStop said it might introduce new services and products to increase the size of its market.
In October, the gaming store announced its collaboration with Collectors Holdings through its Professional Sports Authenticator division, which opened the door for the retailer to become an authorized Professional Sports Authenticator (PSA) dealer.
Through PSA, GameStop can provide trading card autograph authentication and grading services at select stores across the nation.
Although the company has introduced the new addition, Wedbush analysts are skeptical it will help the retailer stay afloat.
On Wednesday, the popular gaming retailer announced that its net sales fell 20 percent, now sitting at $860 million – a drastic change from its $1.08 billion in 2023
‘Its entry into the trading card business follows failed attempts at an omnichannel strategy and at NFT trading,’ they said, referring to non-fungible tokens, or digital assets on blockchains, used for digital collectibles, game items, art, and more, according to the website.
Analysts also noted how much revenue has dropped annually as hardware and accessory sales have plummeted 28 percent, while software fell 15 percent.
Collectible sales have also declined by 3.7 percent, according to Retail Dive.
‘Revenue continues to fall dramatically year-over-year as GameStop closes stores and more games are sold digitally,’ the analysts explained.
On top of weeding out stores in the U.S., the retailer announced it will also shutter operations in Germany by the end of this fiscal year.
GameStop also plans to start slowing operations down in Italy after completely leaving Ireland, Austria and Switzerland in 2023.
The store has notably struggled to sell new and used video game discs in-store as Americans shift toward digital downloads, streaming and online shopping
GameStop is not alone in announcing mass store closures, as the US faces a growing ‘retail apocalypse’ which is seeing stores struggle with consumer pullback and increasingly tight margins.
There were almost 2,600 store closures in the first four months of 2024. If that trend continues, almost 8,000 will have been lost by the end of the year.
It emerged in October that Walgreens will shutter more than 1,200 stores in bid to turn around the struggling chain.
In the same month, Big Lots said it was shutting 500 stores across multiple states as its financial woes worsen.
Meanwhile, Badcock Home Furniture & More said at the end of July it is closing all its 380 stores dotted around the South after it fell into bankruptcy earlier this year.
The well-known party and craft retailer Party City has recently been faced with the possibility of mass closures just a little over a year after the company surfaced from Chapter 11 bankruptcy.
