GameStop Adds 507 AT&T Wireless Stores As Diversification Continues
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GameStop announced Monday that it’s acquiring three AT&T Wireless chains, adding 507 stores as it continues to expand beyond the video game business.
The stores — owned by Cellular World, Midwest Cellular and Red Skye Wireless — are located in 26 states, with the biggest share in Texas, Missouri and Oklahoma. Tony Bartel, GameStop’s chief operating officer, declined to reveal a purchase price but said it amounted to the bulk of $475 million raised by the Grapevine-based retailer in a debt offering this year.
“Video games are cyclical,” he added. “We said, ‘Let’s take our real estate experience and extra capital that we have and see if we can diversify.’”
GameStop, the largest independent retailer of video games, has been adding new businesses over the past three years under the umbrella of its Technology Brands unit. Spring Mobile, an AT&T Wireless chain it acquired in 2013, had about 200 stores two years ago. With the new acquisitions, it will operate 1,421 stores, or about 45 percent of AT&T’s authorized retail network, said spokesman Joey Mooring.
GameStop also operates Simply Mac, a antuorized retailer of Apple products, and sells collectibles like toys, t-shirts and statues online and through a new retail chain called ThinkGeek.
The company’s wireless retailing unit is on pace to produce $1 billion in annualized sales this year and profit of $85 million to $100 million, Bartel said. In the first quarter, mobile and consumer electronics sales contributed 9.8 percent of GameStop’s revenue.
At a meeting with analysts earlier this year, GameStop executives said they expect the collectibles business to also reach $1 billion in sales by 2019, and for its Technology Brands businesses to contribute 50 percent of corporate profits.
The consumer electronics retailer has been diversifying amid concerns that its core video game business will decline as more games are sold online. But company executives maintain that its video game business remains solid, if not as fast-growing, and that worries over the impact of digital downloads are overstated.
The stores — owned by Cellular World, Midwest Cellular and Red Skye Wireless — are located in 26 states, with the biggest share in Texas, Missouri and Oklahoma. Tony Bartel, GameStop’s chief operating officer, declined to reveal a purchase price but said it amounted to the bulk of $475 million raised by the Grapevine-based retailer in a debt offering this year.
“Video games are cyclical,” he added. “We said, ‘Let’s take our real estate experience and extra capital that we have and see if we can diversify.’”
GameStop, the largest independent retailer of video games, has been adding new businesses over the past three years under the umbrella of its Technology Brands unit. Spring Mobile, an AT&T Wireless chain it acquired in 2013, had about 200 stores two years ago. With the new acquisitions, it will operate 1,421 stores, or about 45 percent of AT&T’s authorized retail network, said spokesman Joey Mooring.
GameStop also operates Simply Mac, a antuorized retailer of Apple products, and sells collectibles like toys, t-shirts and statues online and through a new retail chain called ThinkGeek.
The company’s wireless retailing unit is on pace to produce $1 billion in annualized sales this year and profit of $85 million to $100 million, Bartel said. In the first quarter, mobile and consumer electronics sales contributed 9.8 percent of GameStop’s revenue.
At a meeting with analysts earlier this year, GameStop executives said they expect the collectibles business to also reach $1 billion in sales by 2019, and for its Technology Brands businesses to contribute 50 percent of corporate profits.
The consumer electronics retailer has been diversifying amid concerns that its core video game business will decline as more games are sold online. But company executives maintain that its video game business remains solid, if not as fast-growing, and that worries over the impact of digital downloads are overstated.
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Independent hunh...
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Guess that's why theyve been stuffing bags with Cricket coupons for months.
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they would be obsolete if the internet wasn't ? up in most places in north america, bandwidth caps and suppressed development of fiber means a lot of people will still benefit from going to a physical store.
