GAMESTOP SAYS GAME OVER FOR 150 STORES
Company reports 13.6% drop in global sales for 4th quarter
Shares of GameStop slid almost 13% Friday after the video game retailer reported a drop in fourth- quarter sales and announced plans to close at least 150 of its 7,500 stores worldwide.
GameStop faces increased competition from retailers such as Amazon, Best Buy and Walmart while more players purchase games digitally — whether on gaming consoles or on their smartphones or tablets.
GameStop reported a 13.6% drop in global sales, to $ 3.05 billion, from a year ago. GameStop blamed weak sales of certain blockbuster video games released during the holiday season and “aggressive console promotions” by other retailers.
New hardware sales plunged 29% and new software sales dropped nearly 20%.
Larry Perkins, CEO and founder of Sierra Constellation Partners, said the gaming market follows the path of other specialty retailers in moving toward more diversified offerings.
“Not only are they getting hammered by the online retailers and big boxes that have an inherent cost advantage through no retail real estate footprint or a much larger footprint that they can leverage with other products, but the movement to mobilebased games is creeping up mightily,” Perkins said.
GameStop said its Technology Brands business, which includes cellphone retailers such as Spring Mobile, posted a 44% fourth- quarter increase in sales. GameStop’s Collectibles business rose 28%.
This year, GameStop plans to open 65 Technology Brand stores and 35 Collectibles stores.