GameStop's downward curve has curled a little further down. This shouldn't come as a shock for those paying attention to the matter. The writing has been on the wall for a long time regarding the once-great retail giant, and as the company struggles to rebound and recreate itself for modern times, sacrifices are being made.
It was during an earnings call yesterday, where it was revealed that GameStop lost $400 million last quarter, that the company announced that it plans to close 180-200 underperforming stores by the end of its fiscal year in February 2020. That will still leave it with around 5,500 stores worldwide, making for a downscaling of no more than 3.5% of its total size. That said, GameStop expects a "much larger tranche of closures" to follow in the approaching year, though how much larger wasn't specified.
As for which stores could close, GameStop is weighing its options and considering ways to "de-densify" its store base, or closing stores that are close enough to others to affect business. It noted that, on average, a GameStop store has a land lease of just two years, suggesting that most individual stores are low-priority enough to at least be considered.
This is the latest purging of company assets and personnel, following the layoffs among GameStop stores and Game Informer branch just last month. The downsizing as a whole is part of the "GameStop Reboot," a wide-scale restructuring initiative designed to pull the company out of its downward spiral and make it into a smaller yet stronger money-maker.
Going into it further during the earnings call, it went into greater detail, specifying its goals of updating its business partnerships, building up its digital platform to better serve customers beyond its retail stores, and creating a "social and cultural hub of gaming." That’s mostly just business jargon, but it does reiterate the company's desire to revamp the experience of going into a GameStop store. To that end, it has been experimenting with a number of new gamer-centric store concepts, ranging from stores geared towards competitive gaming to stores with a retro gaming theme.
GameStop is thinking long-term for its Reboot initiative, and expects to see its current business continue to decrease for multiple quarters while it works to adjust and stabilize. Things are going to get worse before they can get better, in other words, and things are getting worse at an alarming rate. Whether it can successfully reboot itself before it's too late remains to be seen.