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GameStop’s CFO, James Bell, claimed that 95 percent of the company’s 5,700 stores were profitable, but said that “we have a clear opportunity to improve our overall profitability by de-densifying our chain.” He added that more outlets would be closed down following this year’s shutterings.
"We are applying a more definitive, analytic approach, including profit levels and sales transferability, that we expect will yield a much larger tranche of closures over the coming 12 to 24 months,” said Bell.
The closures are part of GameStop’s Reboot initiative, which consists of addressing selling, general and administrative expenses, as well as optimizing the current business and developing new revenue streams.
The Reboot plan saw the chain lay off 170 workers last month, including several members of staff from its Game Informer subsidiary magazine. GameStop has also shut down geek culture retailer ThinkGeek’s online store, consolidating it with its parent company.
GameStop, which saw record losses last year, posted a net loss of $415 million for the last quarter and expects sales to be down over the next three to four quarters as the current console generation comes to an end. It added that unlike last year when Red Dead Redemption 2 helped boost game sales, the dearth of holiday blockbusters would also affect the company’s bottom line.