What you need to know
- GameStop is having a hard time sustaining its business lately.
- This is due to the rise in digital distribution.
- GameStop is planning to close another 300 stores this year.
- This strategy is called "de-densifying" and the company hopes will turn its fortunes around.
It seems like GameStop still hasn't been able to turn its business around and in a recent earnings call, said that it was going to shut down another 300 stores this year. According to a report by Comic Book, the company closed 321 stores last fiscal year but it still has 5,500 locations. That's more than what many clothing retailers have if you wanted a comparison.
The outlet said the following about the situation.
GameStop has announced that it will be closing over 300 stores this year as part of its ongoing effort to 'de-densify.' The news comes way of GameStop's newest earnings call, which also featured a comment from the retailer about a possible PlayStation 5 (PS5) and Xbox Series X delay. According to GameStop, it closed 321 stores last fiscal year, bringing its store count to 5,500 locations. That said, according to... George Sherman, there are plans to meet or possibly exceed this number during this fiscal year, which means there will soon be many GameStop employees out of a job... Looking ahead, GameStop notes it's currently difficult to provide financial guidance to its investors for this fiscal year given the coronavirus. However, the retailer does note it expects a challenging first three quarters, but hopes this will be made up for in the final quarter, courtesy of the PS5 and Xbox Series X.
Hopefully, GameStop will be able to recover, but I think it'll have to cut thousands of stores before it reaches a point where it's sustainable. It's no secret that game sales are going towards the digital space, and with expansive cloud game streaming around the corner, GameStop may only be the place you buy consoles and collector's edition, as well as other gaming-related merchandise.
Let's hope that those who will be laid are able to find jobs soon. The global economy isn't doing so well and in the United States alone, over 3 million people have lost their jobs as of now.