GameStop has recently shut down approximately 1,000 stores globally, including around a quarter of its locations over the past year. However, the company indicated that this is not the end of the closures. In a regulatory filing, GameStop revealed it plans to close “a significant number” of additional stores in the near future, although the specific locations have not yet been identified.
The majority of these closures took place in the United States, where 590 stores were shut down, leaving the company with 2,325 locations as of February 1. In addition, over 330 stores were closed across Europe, and nearly 50 locations in Canada and Australia were also affected.
Despite the ongoing closures, GameStop plans to reinvest its cash into cryptocurrencies as part of its strategy moving forward.
GameStop now operates 3,203 stores globally, a significant decline from its peak of around 6,000 locations a decade ago.
The company has been closing hundreds of stores in recent years as it struggles to adapt to shifting customer behavior, with more people opting to buy games online or stream them rather than purchase physical copies. GameStop also gained attention during the “meme stock” frenzy in 2021, which temporarily boosted its stock price.
GameStop is among several major retailers closing stores or shutting down entirely, including Joann, Forever 21, Kohl’s, and Macy’s. The ongoing store closures are driven by several factors, including inflationary pressures on consumers, the influence of private equity, and the failure of some retailers to quickly adapt to evolving shopping habits.
As part of its shift away from traditional retail, GameStop has announced that it plans to invest in bitcoin as a treasury reserve asset. The company revealed that a portion of its cash, or potential future debt and equity issuances, could be allocated toward digital currency investments.
Neil Saunders, an analyst at GlobalData Retail, commented that this move to bitcoin seems more like a defense against irrelevance than a strategic retail decision. He noted that it suggests GameStop is pivoting from retail to becoming a cryptocurrency investment vehicle.
Despite the unconventional strategy, the news of GameStop’s crypto investment sparked a surge in its stock, with shares rising 16% in premarket trading on Wednesday.