Gamestop Closing 400-450 Stores This Year as It Gears up for Next Gen

GameStop has revealed that it will close down about 100 more stores globally than it had originally planned, bringing the total of expected closures to 400-450 in 2020 alone. The retailer also told investors to expect more closures next year.

This development comes amid the news that GameStop’s net sales were down by 26.7 percent compared to the second quarter of FY2019, partly due to the pandemic. Although online sales increased by 800 percent, the revenue generated during Q2 2020 was below expectations.

“We believe the actions we are taking to optimize the core operations of our business by increasing efficiencies and creating a frictionless digital ecosystem to serve our customers, wherever and whenever they choose to shop, are enabling us to navigate the COVID-19 environment while positioning us well for the launch of the next generation of consoles,” said Chief Executive Officer, George Sherman.

Chief Financial Officer, Jim Bell, added that the impending closures will “allow us to more efficiently and profitably service our customers” and that there are more closures coming.

Elsewhere, Venture Beat got hold of an internal GameStop memo, which reveals that the retailer is mulling over offering various installment plans for next-gen consoles to prospective customers. There are also reports of GameStop teaming up with third-party payment processors to offer interest-free installment plans.

The memo separately mentions a “rent-to-own” option, which is described as follows:

The merchandising team is working with a reputable third-party partner that offers rent-to-own options for most items in your stores. This plan allows the customer to walk out the door with minimal up-front money and to pay their purchase off between 30 days and 12 months.

While we can’t verify the memo, it’s evident that GameStop is banking on next-gen sales.

[Source: GameStop, CNN, Venture Beat]