GameStop is in talks with private firms about a potential buyout, the retailer confirmed in a news release.
In spite of being the largest brick-and-mortar games retailer in the U.S., GameStop has struggled to remain relevant in the wake of digital game sales and popular online retailers such as Amazon offering more competitive pricing and direct shipment to consumers.
“There can be no assurance any agreement will result from these discussions,” the news release stated. “GameStop does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so.”
While it is not yet certain if GameStop will follow through with a sale, the company’s stocks rose 11% on Monday, after rumors of a buyout started.
GameStop reported a net loss of $105.9 million for the 2017 fiscal year, and with profits continuing to dwindle the company is in need of new direction to turn it around.
GameStop’s push for pre-owned trade-ins and subsequent sales have kept the company afloat, and the retailer even expanded into used electronics sales, such as tablets. However, the options for consumers continue to grow, even when it comes to older titles with streaming services such as PlayStation Now and Microsoft’s upcoming service.
The leadership of GameStop has also been in flux over the past year after J. Paul Raines resigned in November 2017 for health reasons, before his death in March. The next appointed CEO Michael Mauler resigned after only three months in May. Current interim CEO and former Microsoft exec, Shane Kim, took over June 1.
Source: Read Full Article