Video game retailer GameStop confirms plans to close several of its stores in Europe as it aims to turnaround its finances. The retailer hasblamed its financial woes on the PS5 and Xbox Project Scarlett, saying that sales of the PS4 and Xbox One have fallen as gamers wait for the new consoles.
In an earnings call, GameStop CEO George Sherman said that the retailer has begun to “wind down” its business in the Nordic countries of Denmark, Finland, Sweden, and Norway. A date for all of these store closures wasn’t given, but GameStop CFO Jim Bell said that the company expects the closures to have been completed by the end of 2020. The closures of these Nordic GameStop stores will take “several months to complete,” said Sherman, but that it would add around $15 million to GameStop’s bottom line. This may seem like a small number for an international business, but withGameStop’s major financial issues, the retailer will be looking to cut costs in any way that it can.
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The retailer may have confirmed plans to closeGameStoplocations in Europe, but there are also likely to be many more closures in North America. Bell revealed that GameStop is “on track” to have closed between 230 and 250 stores around the world by the end of the 2019 fiscal year, which ends in March 2020. 140 GameStop stores have been closed this year, but this means that there are between 90 and 110 more store closures to go.
GameStop also spoke about some of its other plans to fix its finances, such as its decision tochange the layouts of several of its stores. The retailer has only changed the layout of 12 stores in Tulsa, OK., which is just 0.2% of its total stores in North America, Oceania, and Europe. However, GameStop is “very encouraged” by what it’s seeing in these stores suggesting that many more stores could also be getting a layout change.
There are also plans for its PowerUp Rewards membership program. Sherman said that the company is “rolling out enhancements” to the loyalty program such as reward certificates, which have been offered since November. Things are “early,” said Sherman, but customers have responded positively. PowerUp Rewards members had been upset when GameStop made its loyalty program more expensive but it seems that they aren’t as upset any more.
