Hard times in the high street
GameStop continues to struggle to find its place in a digital gaming world. Between the shift to online sales and the ongoing COVID-19 pandemic, GamesIndustry.biz reports that the retailer continues to see a year-on-year loss in profit, which has forced the closure of hundreds of stores within the past 24 months.
In a recent investor’s presentation, GameStop announced that for the quarter ending October 31, 2020, the retailer posted net sales of $1 billion USD. While that figure is certainly not to be sniffed at, it represents a 30% drop in profit for the same period in 2019. Overall, the loss still remains a morbidly positive step for the company’s ongoing debt struggles, as the figure is offset by the cost-cutting closure of some 462 stores that shuttered over the course of 2020.
GameStop CEO George Sherman spoke of his confidence that the new generation of gaming would help to boost GameStop and its profit margin into 2021 and beyond.
“We begin the fourth quarter with unprecedented demand in new video game consoles that launched in November, which drove a 16.5% increase in comparable store sales for the month, despite being closed on Thanksgiving Day and the impact of COVID-19 related store closures, which affected most of our European footprint,” said Sherman in the presentation.
“We anticipate, for the first time in many quarters, that the fourth quarter will include positive year-on-year sales growth and profitability, reflecting the introduction of new gaming consoles, our elevated omni-channel capabilities and continued benefits from our cost and efficiency initiatives, even with the potential further negative impacts on our operations due to the global COVID-19 pandemic.”
These recent closures join the 321 GameStop stores that ceased operation in 2019, with many more expected to close in the coming months. All in, GameStop predicts to have closed around 1000 retail stores by the end of March 2021, a move that will positively affect the company’s outgoings, but will also leave hundreds of workers unemployed during one of the worst economic periods in recent history.
GameStop has closed 462 stores this year, 783 in the last two years [GamesIndustry.biz]