GameStop's Silent Store Closures Spark Concern
GameStop is quietly shutting down numerous US stores, leaving customers and employees surprised and disheartened. This wave of closures highlights the retailer's ongoing struggles, with its physical footprint shrinking by nearly one-third. Social media platforms are buzzing with reports from affected customers and employees, painting a concerning picture of the company's future.
The once-dominant video game retailer, with a history spanning over 44 years (originally known as Babbage's), has seen a dramatic decline. Boasting over 6,000 global locations and $9 billion in annual sales at its peak in 2015, GameStop's fortunes have reversed. The shift to digital game sales has significantly impacted its business, resulting in a nearly 33% reduction in physical stores by February 2024, leaving approximately 3,000 locations in the US (according to ScrapeHero).
Following a December 2024 SEC filing hinting at further store closures, a surge of reports from both customers and employees on platforms like Twitter and Reddit has emerged. These reports detail unexpectedly closed stores, with some, like Twitter user @one-big-boss, expressing dismay over the loss of a previously thriving local store—a development perceived as a worrying omen for less profitable locations. Employee concerns are also surfacing, with one Canadian employee citing "unreasonable targets" imposed by management as stores face evaluation.
GameStop's Ongoing Decline
The recent store closures are a continuation of GameStop's downward trend. A March 2024 Reuters report predicted a grim outlook, citing a 287-store closure in the previous year following a nearly 20% (approximately $432 million) revenue drop in the fourth quarter of 2023 compared to 2022.
Over the years, numerous attempts have been made to revitalize GameStop. As its customer base migrated online, the company experimented with diverse strategies, including expanding into related merchandise like toys and apparel, and venturing into unrelated areas such as phone trade-ins and trading card grading. The company also experienced a temporary surge in 2021 thanks to a group of amateur investors on Reddit, a phenomenon documented in the Netflix documentary Eat the Rich: The GameStop Saga and the film Dumb Money.
