Summary
- GameStop is currently undergoing a comprehensive review meant to identify new locations for closure.
- The company anticipates this process could result in even more closures than those carried out “in the past few years.”
- GameStop closed over 700 stores since 2020.
GameStop will plausibly continue closing stores in the near future, the company revealed in a recent regulatory filing. Though the specifics of this cost-cutting measure haven’t yet been decided on, these potential closures could surpass those GameStop has already carried out in recent history.
Like many other video game retailers, GameStop’s brick-and-mortar operations began struggling with the rise of the digital age. In response to declining sales, the company has recently been trying to reimagine itself and diversify into other industries, ranging from NFTs to trading card grading. Although none of these bets have yet paid off and GameStop’s revenue has been on a steady decline since 2014, the retailer’s latest consolidated financial report did reveal an unexpected $17.4 million profit for Q3 2024.
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While the fact that GameStop ended its latest quarter in the green surprised some analysts, this result may not be an indicator that things are looking up. On the contrary, the retailer is now looking into even more store closures, having said as much in a December 10 filing with the Securities and Exchange Commission. The company’s latest Form 10-Q reveals it has recently kicked off “a comprehensive store portfolio optimization review” meant to identify new locations to shut down. “While this review is ongoing and a specific set of stores has not been identified for closure, we anticipate that it may result in the closure of a larger number of stores than we have closed in the past few years,” the filing reads.
GameStop’s SEC Filing Hints at Hundreds of Store Closures
GameStop reported in March 2024 that it had closed 287 stores in the U.S. and abroad over the previous 12-month period. The company had also closed over 100 U.S. locations in each of the years 2022 and 2021. For the fiscal year 2020, GameStop announced that it would close over 400 locations worldwide. Therefore, by stating that its ongoing store portfolio review could lead to even more reductions than those from “the past few years,” the retailer appears to be signaling the possibility of hundreds of additional closures in the near future.
While this review is ongoing and a specific set of stores has not been identified for closure, we anticipate that it may result in the closure of a larger number of stores than we have closed in the past few years.
GameStop Still Operates Thousands of Stores the World Over
Even after all of GameStop’s cost-cutting efforts, the retailer still operates over 4,000 physical locations around the world. Though in light of its latest SEC filing, there’s a plausible chance this won’t be the case for much longer. Aside from stateside closures, GameStop has also been reducing its global operations, most recently by deciding to permanently leave Germany. Prior to that, the company exited Austria, Switzerland, and Ireland in 2023. Its Italy branch has also been downsizing as of late.
Although its unexpected Q3 2024 profit suggests that the retailer’s cost-cutting measures are working, GameStop will inevitably reach a point where there are no more stores to close and costs to cut. If it hopes to survive in the long term, it will need to find new revenue streams before that happens. GameStop’s recent decisions to invest in retro games, NFTs, and even a Professional Sports Authenticator partnership are all attempts to do just that.
Sources: GameStop Closing List, Daily Mail
