UK retailer GAME likely to close 40 stores as retail falters
UK retailer GAME likely to close 40 stores according to a new press release from the company. 2018 was a stronger year for the company than previous, with growth in revenue of around 4%, but that same period saw declining profit. Profit before tax fell 25.5% in the same period. A part of that tumbling profit was the shrinking of margins at various stores, which is partially due to rent costs.
2019 was far worse though for everyone, including GAME. Retail take across the UK was down across the board in the country in 2019, making it the worst year on record for the entire industry. sales overall fell for the first time in 24 years as premium and high-end retailers suffered worst of all, dragging down the entire sector. It appears that GAME was also negatively affected.
Total sales slipped by 0.1% in 2019, according to the British Retail Consortium (BRC) and advisory firm KPMG, the lowest since they began monitoring the sector in 1995. Every other previous year has seen an overall growth in retail sales.
Currently 27 of the 40 most unprofitable stores have already been marked and informed, meaning that they are very likely to close in the near future. The company is working to reduce the likelihood for some of these closures though, trying to reduce costs amid falling revenue at these locations. GAME has also said that the company is looking into a “store rationalization program” aimed at improving the quality of stores and displays that are unprofitable. Their aim is to help improve relationships with the community, and through increased traffic, bring about better relationships with landlords.
“We are working closely with landlords throughout the UK to ensure that we do not have to vacate the 40 locations which could lead to a number of job losses,” reads a company statement. “However, we are facing a challenging retail market and GAME with its extensive retail footprint, needs to restructure and landlords need to work with us in setting realistic, fair rents.”
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