International video game retail giant GameStop has confirmed plans to shut down a "significant number" of its physical stores across the globe this year, marking a continued retreat from the high street.
A Strategy of Shrinking Footprint
This latest wave of closures follows a major restructuring effort in the 2024 fiscal year, which saw the chain close 590 stores as part of what it called an "optimisation review." The company operates in the United States, Europe, Canada, Australia, and New Zealand.
According to a filing made with the US Securities and Exchange Commission in December, a significant number of additional stores are scheduled to close before the end of January. As of early 2025, GameStop operated approximately 2,325 stores in the US and around 3,200 stores worldwide.
Financial Struggles and Market Exit
The decision comes against a backdrop of severe financial pressure. GameStop's annual revenue has fallen by more than 35% since 2022. Furthermore, its stock price has collapsed, now standing at 80% below the all-time high it reached in 2021.
The retailer has been steadily withdrawing from several international markets in recent years. It has already ceased operations in Ireland, Switzerland, Austria, and Germany. Additionally, the company has sold its Italian subsidiary and is actively seeking buyers for its French and Canadian business divisions.
Executive Incentives Amidst Contraction
Despite the ongoing contraction of its retail empire, GameStop's board made a notable move on January 7. It granted a performance-based stock option award to the company's Chief Executive Officer, Ryan Cohen.
To qualify for this award, Cohen must guide the company to a staggering market capitalisation of $100 billion. This target appears highly ambitious, given that the firm's current market value is approximately $9.52 billion at the time of writing.
The contrasting strategies of store closures and lofty executive performance goals highlight the challenging transition GameStop faces as it seeks a sustainable future in an increasingly digital marketplace.
