The future for GameStop is looking bleaker than ever before.
As has been the case for retail commerce in general this year, COVID-19 has struck a catastrophic blow to business, with those companies that were already struggling to maintain relevance on the high street prior to the pandemic either going under or just barely managing to make ends meet. The latter camp is where GameStop currently resides, and, if recent developments are anything to go by, the situation isn’t about to change anytime soon.
As part of the retailer’s Q2 earnings call with investors earlier this week, CFO Jim Bell addressed the huge wave of store closures that have already occurred over the last 10 months, how they’ve affected business and, perhaps most importantly, what’s going to happen next. Unfortunately, it appears as if job security for potentially hundreds of employees is under threat, as Bell confirms that the current figure of closures, 388, is only going to keep growing for the remainder of 2020, with 400-450 more stores set to close.
As of writing, 5,122 GameStop stores continue to operate worldwide, a fall of 602 compared to 2019 and a result of what the company has previously referred to as a “de-densification” strategy – i.e. cutting loose those stores deemed to be the least profitable. And if you thought these desperate measures would be enough to trigger a fresh start, so to speak, in 2021, that’s not going to happen, as the shutters will continue to come down on more locations into the New Year.
Whether this is truly the beginning of the end for one of the world’s biggest video game retailers remains to be seen, then, though considering how long GameStop has been battling to stay afloat, it’s likely only a matter of time until administrators come knocking. Watch this space for more.
