GameStop has announced that it will be permanently closing down over 300 stores this year in an effort to clean up a overly dense amount of brick and mortar locations. The news arrived by way of the company’s latest earnings call where it was also revealed that 321 stores were closed last fiscal year and they plan to meet or exceed those closure numbers this year. Currently GameStop has 5,500 retail locations operating across the US.
Easily the worst thing to come from the closures is that thousands of employees will find themselves without a job during one of the most difficult economic periods the US has ever faced. The company has already been hit with significant backlash for deeming its 5,500 retail locations as essential business during a global pandemic, putting both its employees and customers at risk. Thankfully GameStop eventually did the right thing and closed its doors, but only after news outlets and social media campaigns called for closures.
Somehow, despite the ever worsening COVID-19 crisis, GameStop’s sales have jumped by 2%, but it’s entirely possible that’s due to the recent release of the highly popular games DOOM Eternal and Animal Crossing: New Horizons. The last several years have been filled with bad news for the company, despite GameStop actually managing to turn a profit in the year’s final fiscal quarter, posting a net incoming of $21 million. Though its important to note that revenue for the fiscal year dropped 22% to $6.47 billion, with a net loss of $407.9 million for the full fiscal year.
While hardware and software sales continue to drop for the company, collectibles is a bit of a bright spot, jumping 4% to $737.5 million, representing a 11% of the GameStop’s total business. Given the state of global manufacturing, the unemployment rate, and the uncertainty over when the COVID-19 crisis will be resolved, it’s unlikely that GameStop can count on a boost from Xbox Series X and PS5 sales this holiday season.
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