Gamestop has plans to close over 100 retail locations. Earlier in the week, the video game retailer announced it will be closing up to 3% of its stores. This means they may close down up to 190 stores.
In the United States, GameStop operates 4,400 stores. Globally, they operate over 6,500. What's not clear is how many stores the Texas-based company will close in the United States.
GameStop has been on shaky grounds
GameStop has been experiencing a rough path for a while. Over the last year, the retailer's stock has dropped by more than 31%, and its overall sales have fell the last quarter. The company said sales fell 13.6% last quarter compared to the year before.
As for what's the main issue affecting GameStop, it comes down to video game sales. The retailer isn't selling enough games. Paul Raines, CEO of GameStop, released a statement last week saying the video game category was not strong. He said it was particularly weak in the later half of 2016.
Raines said one of the reasons why video game sales have weakened is because some of the biggest brands in gaming have not provided any recent updates to their consoles.
He said this included Sony and Microsoft. This has resulted in a slump in business for GameStop and similar retailers.
Part of an annual strategy
The video game retailer said the closure of GameStop stores was part of an annual strategy. The strategy involves closing stores that are not productive. GameStop's strategy was announced over three years ago, and the closures will take place throughout the rest of his year.
GameStop may be closing over a hundred stores, but it has plans on opening over 60 new Technology Brand stores. It also plans on opening 35 Collectibles stores. The retailer not only cited weak video game sales for the reason for the upcoming closures, but also because of competition using aggressive promotional techniques.
The video game retailer is just another brick-and-mortar company struggling to compete with online retailers like Amazon. Over the last year, other stores have announced they will be closing locations. This includes Macy's, Staples and JCPenney. Sears recently announced that they doubt the company would survive.