The video gaming juggernaut GameStop took a huge hit in the stock market today. The Texas-based company announced that it expects to close 2-3 percent of its stores following lackluster fourth quarter sales in 2016. After a 13 percent drop in stock shares, the retailer had no other choice but to announce the upcoming closures. According to a statement from CNBC, GameStop reported Thursday that hardware sales declined 29.1 percent, and new software sales fell by 19.3 percent during the quarter.
GameStop says the closures are expected to come in 2017, but gave no specific answer to which ones will be closed. A spokesperson from GameStop told Fortune that the closures are a part of its “annual strategy” to close up non-productive stores that was announced more than three years ago.
“We encountered stiff headwinds as we completed the third year of the console cycle,” GameStop CEO Paul Raines said.
Even though 150 stores sound like a lot, they are but a few compared to the 7,500 stores they have worldwide. Reluctantly, GameStop did announce that it plans to open 65 Technology Brand stores and 35 Collectibles stores. One of their acquired cellphone companies Spring Mobile saw a 44 percent increase in sales. ThinkGeek also saw a 28 percent increase in sales due to the strong demand in Pokemon toys and gear.
On a lighter note, GameStop may see better days after multiple replenishments of the Nintendo Switch console have sold out. Microsoft is also waiting to unveil their new upgraded Xbox One console dubbed Project Scorpio. The official announcement is expected to be announced at E3 2017 (Electronic Entertainment Expo).
Be sure and check out our anticiapted coverage of the E3 2017 event starting June 12th, 2017.
Article sourced USA Today