GameStop may be running out of credits.
Just two months after announcing sweeping changes to reinvent itself with new store concepts and experiences, the Texas-based retailer reported a dismal second quarter, which saw overall sales decline by 14.3%, with same-store sales dipping an average of 11.6%. New hardware sales dropped 41.1%, while new software and accessories dropped 5.3% and 9.3% respectively. Pre-owned and digital sales also posted double-digit decreases. The one bright spot: toys and collectibles. The category increased by 21.2% overall with strong sales in both domestic and international stores. GameStop was quick to update its strategic plan for reinventing the business, launching core tenets of its GameStop Reboot plan.
“We are committed to acting with a sense of urgency to address the areas of the business that are critical to achieving long-term success and value creation for all our stakeholders,” says George Sherman, GameStop CEO. “We will set GameStop on the correct strategic path and fully leverage our unique position and brand in the video game industry. Our strategic plan is anchored on four tenets which include, optimizing the core business by driving efficiency and effectiveness, creating the social and cultural hub of gaming within each GameStop, building compelling digital capabilities, and transforming our vendor and partner relationships for an evolving video game industry. This is a compelling new strategic vision for the company, and we’ve already started to execute against all four pillars. We also remain committed to returning capital to shareholders and balancing that opportunity against the need to maintain a strong balance sheet to properly run our business and invest in responsible growth.”
The company’s total net income loss was $415.3 million compared to a net income loss of $24.9 million in the same quarter last year.
George Sherman took the reigns as CEO at GameStop earlier this year, at the time promising to “expand the culture of gaming in new and exciting ways.” Most recently, GameStop shuttered the website for its ThinkGeek subsidiary, moving product in-house to GameStop, while keeping physical ThinkGeek locations open for business.
On a call with investors following this week’s earnings report, GameStop Chief Financial Officer James Bell said that the company could close up to 200 of its underperforming stores by the end of this year.