During today’s GameStop Q2 earnings call, the company announced it would be closing between 180 and 200 “underperforming” stores globally between now and the end of the year. GameStop CFO James Bell praised the company’s over 5700 stores worldwide, stating that 95% of them were profitable. Nonetheless, the company is beginning to roll out an ongoing plan that will also result in even more store closures into the next two years.
Some layoffs have already been implemented. So far about 170 positions have been eliminated in the last month or so. The Game Informer magazine has seen some layoffs too.
Retail, generally, has been closing stores. The magazine industry has been in a downturn for decades. The move to eliminate unprofitable stores has been growing over the last 18 to 24 months as the overall outlook is poor.
Gamestop will likely see some improvement once the new console generation is released next year. The industry tends to follow the console cycle quite closely.
In 2018, the blockbuster game Red Dead Redemption 2 helped the company profits. In 2019 there was no big blockbuster which hurt profits considerably. The firm console release dates has also impacted game sales.
Looking at the “reboot” the CEO believes it may be some time before the consolidation and weak sales are rectified. The CEO has a loss of $415 million to contend with over the next 4-5 quarters.