The world’s biggest video game retailer, GameStop, has a major problem: It has way too many stores (GME)

The world’s largest video game retailer, GameStop, has a staggering number of stores around the world: Over 5,700 as of September 2019. While that massive number of retail locations might’ve made sense in a previous decade, it’s become a liability for the game retail giant as consumers increasingly buy digital games: Each of those over…

The world’s biggest video game retailer, GameStop, has a major problem: It has way too many stores (GME)

The world’s largest video game retailer, GameStop, has a staggering number of stores around the world: Over 5,700 as of September 2019. While that massive number of retail locations might’ve made sense in a previous decade, it’s become a liability for the game retail giant as consumers increasingly buy digital games: Each of those over 5,700 stores has a quarterly operating expense of approximately $100,000. That’s why, among many other reasons, GameStop is shutting down some of its many retail locations. “We are on track to close between 180 and 200 underperforming stores globally by the end of this fiscal year,” GameStop CFO Jim Bell said on the company’s Q2 earnings call last Tuesday. A Brooklyn-area GameStop store. Ben Gilbert/Business Insider It might sound like bad news, but it’s actually an important part of GameStop’s effort to reboot — the company is shoring up operating expenses and other needless expenditures as it attempts to stay afloat. “If they close 200 stores this year, operating expenses should drop by $20 million next year,” Wedbush analyst Michael Pachter told Business Insider in an email last week. But that’s not all: The company is expecting to close a “much larger” group of stores in the next one to two years, according to Bell.
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