GameStop plans mass store closures after closing 300 stores last year

GameStop has announced plans to close more stores due to falling sales.

The retailer said it is struggling to sell new and used video game discs in stores as Americans shift to digital downloads, streaming and online shopping.

After announcing its second-quarter financial results this week, executives said they were identifying stores to close.

Worryingly, they reported that more branches would be closing than they have in the past few years.

In March, GameStop announced that it had closed 287 stores worldwide over the past 12 months, bringing its total physical locations to just over 4,000.

GameStop has been at the centre of a trading frenzy in “meme stocks” during the Covid-19 pandemic that has sent its shares to skyrocketing levels – but the company is struggling with sales and profitability.

GameStop announced it plans to close more stores due to falling sales

GameStop shares fell 15 percent after its earnings report on Wednesday and have lost more than 7 percent over the past month.

The video game retailer reported a 31 percent drop in quarterly revenue, prompting investor concerns that the company would not be able to turn around despite store closures.

GameStop has already closed all of its brick-and-mortar stores in Ireland, Switzerland and Austria.

Revenue for the quarter ended Aug. 3 was $798.3 million, compared with $1.16 billion a year earlier.

Although it managed to achieve a rare profit – $ 14.8 million, while a year earlier the company suffered a loss of $ 2.8 million.

GameStop shares have seen significant volatility this year after online stock influencer Keith Gill, also known as “Roaring Kitty,” returned to social media after a three-year hiatus, sending the stock up 119 percent.

Reuters reported that the company’s shares later collapsed 40 percent as Gill’s live broadcast failed to generate any investor interest.

GameStop isn’t the only company announcing mass store closures as the U.S. faces an escalating “retail apocalypse” that has stores grappling with declining customer traffic and shrinking margins.

Earlier this week, major retail chain Big Lots filed for bankruptcy, raising questions about the future of its 1,400 stores.

GameStop shares fell 15 percent after its earnings report on Wednesday and have fallen more than 7 percent over the past month

GameStop, which was at the center of a trading frenzy in “meme stocks” during the Covid-19 pandemic that sent shares skyrocketing, is struggling with sales and profitability

GameStop has already closed all of its brick-and-mortar stores in Ireland, Switzerland, and Austria (pictured: store in Dublin, Ireland)

Household goods retailer Big Lots filed for bankruptcy after years of declining sales and store closures (pictured: store closure in Manassas, Virginia)

The United States faces a growing ‘retail apocalypse’ as stores grapple with consumer withdrawals and shrinking margins

Nearly 2,600 stores closed in the first four months of 2024If this trend continues, we will lose almost 8,000 people by the end of the year.

Bargain stores like Big Lots idOllar stores were particularly hard hit.

For example, 99 Cents Only announced in April that it would close all 371 of its locations in California, Texas, Arizona and Nevada.

Meanwhile, 1,000 of the stores are owned by Family Dollar, and its sister company Dollar Tree will close within the next three years.

Walmart also closed three more underperforming locations in recent months. Best Buy closed ten in March.

Macy’s also closing 150 stores stores over the next three years – including the closure of 55 stores this year.

Pharmacy Rite Aid says it will close more than 800 stores after filing for bankruptcy. Most of these occurred in just two states – customers had to rush to find a new pharmacy in Michigan and Ohio.