GameStop Moves to Expand Its Store Base Significantly
GameStop Corp. (NYSE: GME) has benefited from the Pokémon Go craze that has taken the world by storm in the past few weeks. But now that this trend is somewhat subsiding, this video game retailing giant has its sights set on expanding its base store base across the United States.
The company announced that it has completed the acquisition of three national AT&T authorized retailers: Cellular World, Midwest Cellular and Red Skye Wireless. Ultimately, GameStop is adding about 507 stores to its Technology Brands business.
In 2013, the company entered the mobile space by acquiring Spring Mobile, an AT&T authorized retailer with roughly 90 stores. Now, GameStop is AT&T’s largest authorized retailer, with over 1,400 AT&T Mobility stores. GameStop is also the largest retail distributor of Cricket Wireless with Cricket products and services available in 3,400 of its U.S. GameStop locations.
As of January 30, 2016, the company operated approximately 7,117 stores in the United States, Australia, Canada and Europe.
Paul Raines, chief executive of GameStop, commented:
Today’s announcement showcases the strength of our relationship with AT&T and fortifies our diversification efforts. With the continued investments in our Technology Brands business, we are on track to achieve our goal of generating $200 million of operating earnings in this growing segment by the end of 2019.
Excluding Tuesday’s move, GameStop has performed more or less in line with the broad markets, with the stock up about 11% year to date. Over the past 52 weeks, the stock is actually down about 31%.
Shares of GameStop were trading down nearly 3% at $29.49 on Tuesday, with a consensus analyst price target of $34.90 and a 52-week trading range of $24.33 to $47.83.