200 GameStop closures planned ahead of “a much larger tranche” coming

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Major gaming retailer GameStop says it will be closing "between 180 and 200 underperforming stores" in the next six months. That statement comes following 195 store closures in the last 12 months and what the company says it expects will be "a much larger tranche of closures over the coming 12 months to 24 months."

While that might seem like drastic news at first glance, even hundreds of store closures could have a relatively small impact on a chain that still has 5,700 locations worldwide. And GameStop CFO Jim Bell said in a recent earnings call that 95 percent of those stores still show positive earnings, suggesting the bottom hasn't totally fallen out of the chain's locations across the board.

GameStop is spinning the current set of closures as an effort to "optimiz[e] the store portfolio" through "de-densification" in certain markets that have multiple stores serving "overlapping trade areas." That said, it's always a bad sign when a retailer is planning on closing stores instead of opening new ones. And for GameStop, it's a sign that comes after months of bad news, including major layoffs, executive departures, a failed corporate sale attempt, cratering earnings reports, and a stock price that continues to tumble.

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