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Suburban and strip-mall GameStop stores may be first on the chopping block this year

Up to 190 stores to be shuttered in 2017
Suburban and strip-mall GameStop stores may be first on the chopping block this year
Posted at 7:56 AM, Apr 14, 2017
and last updated 2017-04-14 07:56:20-04

GameStop Corp. has not yet identified which of its stores will be closing in 2017, but those in suburban areas may be the most likely locations to be affected, according to one local expert.

The company announced during its quarterly earnings announcement last week that it will be closing up to 2 percent to 3 percent of its stores. That could mean as many as 190 of the 6,600 stores the retailer operates globally.

The cuts are part of an annual business strategy the company announced in 2011, Joey Mooring, director of corporate communications for GameStop Corp., wrote in an email.

"It is a normal business practice we have implemented each year ever since to rationalize our global store portfolio (not just GameStop branded stores) by closing up to 2 - 3 percent of those stores that are non-productive," he wrote.

In addition to GameStop-branded video-game stores, the company's retail brands include EB Games, Micromania, Spring Mobile, Simply Mac and ThinkGeek. Of the company's 6,600 global retail stores, 4,400 are in the United States.

If any Greater Cincinnati GameStop locations are among the stores to close, those in suburban malls and strip malls would probably be the ones to go, speculated Michael Jones, an assistant professor of economics for the University of Cincinnati.

The stores in more urban locations, like Calhoun Street Marketplace in Clifton Heights, are less likely to see that fate, he added.

Although GameStop Corp. CEO Paul Raines cited a lack of updates in gaming consoles for weak video-game sales, Jones thinks there's more to it.

"I don't think that's actually driving the decline in sales," he said. "I think it's part of a longer-term trend."

Although some consoles have seen some recent updates, a shift toward online content may be part of the reason those updates are fewer and farther between than in the past.

"Game console makers are pushing to put more of their content online," Jones said.

The ease of online ordering through sites like Amazon or directly downloading games through platforms such as Steam also has had a significant impact on brick-and-mortar stores, he said.

"Why would I take 10 minutes to go into a store … when I can just buy the game online?" he asked.

Specialty stores, like GameStop, aren't the only ones taking a hit.

"You're seeing it with Sears and Macy's," Jones said. They're really struggling to try to change."

Click here to see a gallery of 11 major retailers who are closing stores in 2017

When consumers can purchase the same products online that they can in the store -- and in some cases, get them in less than an hour -- change is necessary to stop the trend of declining sales.

"I do know they would need to try to change the retail experience," Jones said.

Retailers that have navigated the trend in recent years seem to be those that offer an experience or gathering place, he said. One possible way of creating that atmosphere in the video-game industry could be hosting gaming nights or tournaments.

That change may also be realized through focusing more on brands outside the video-game realm.

Despite GameStop Corp.'s declining video-game sales and plans to close some stores, the company plans to open 35 new collectibles stores and 65 new technology brand stores in 2017.