GAME has released its trading update for the year-to-date in 2010 and it shows that the retailer continues to struggle in the face of what it describes as a continental High Street that “continues to be challenging”, though it does claim to have outperformed the wider market.
In the UK hardware revenues fell 33 per cent year-on-year for the 19 weeks ending June 12th, a number blamed on “lower Nintendo sales”. Software sales decreased 11 per cent, with total revenue declines hitting 19 per cent.
“The good range of software releases, such as Red Dead Redemption and Battlefield: Bad Company 2, have sold well, although not in sufficient volume to offset the year on year decline in hardware and software sales,” the statement admitted.
The retailer confirmed that by this Saturday (June 19th) 42 of the 43 stores identified as relying on an overlapping geographic footprint will have been closed. In addition, 25 new concept stores have now been rolled out.
New store openings are planned in the Czech Republic. Changes have been made to the management teams in France and Australia.
GAME added that its “leading trade-in and pre-owned programmes continue to give us a real point of differentiation in the market”.
“We are making good progress with the plans outlined in April to develop our unique combination of specialist brand attributes, value, range, service and loyalty, in all channels to market,” the statement continued.
“Stores are the main route to market for pc and video games, and our aim is to have a store footprint in each market that reflects its maturity and the specific demands of our customers.”
Total Group sales for the period fell 11.4 per cent with like-for-like sales dropping 12.3 per cent. UK and Ireland sales fell 18.5 per cent with like-for-likes down 17.2 per cent. Internationally, sales actually climbed by 1.2 per cent though like-for-likes fell 4.6 per cent.
Online sales continue to grow and now account for 17.6 per cent of the Group’s total income.
“The news flow from E3 has been positive for the specialist retailer with an exciting range of new software releases, and further details about new motion sensing technology that will transform the way people play PC and video games,” the statement added. “We will use our trade-in and pre-owned programmes in particular to maximise the opportunities of these launches.
“The new technology releases are unlikely to materially impact our trading performance until next year, with year on year market revenue declines still expected in 2010. Consequently, although we expect to outperform the market with the strength of our pre-owned offering, we anticipate negative full year like-for-likes.
"This revenue profile, coupled with our enhanced value proposition, will prompt a return to our traditional performance trends with losses in the first half and profits in the second half.”