U.K. retailer Game Group Wednesday posted strong preliminary resu...
U.K. retailer Game Group Wednesday posted strong preliminary results for the year ended Jan. 31 and gave an optimistic forecast for the current year’s results. “The competitive landscape has changed,” CEO Lisa Morgan told analysts at a London briefing,…
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noting that retailers including Woolworths recently went out of business. Woolworths had been Game’s No. 1 rival, said Terry Scicluna, chief operating officer for Game’s U.K. and Ireland business. Revenue jumped 32 percent to about $2.9 billion and profit soared 67 percent to about $183 million before taxes and non- recurring costs, it said. Helping to drive the firm’s strong results were growth in its e-commerce and used product businesses, Morgan said. E-commerce sales soared 85 percent to about $154 million from the previous year, while used product revenue increased to about $512 million from about $373 million last year, she said. Unique visitors to the firm’s Web site jumped 39 percent from a year ago to 49.3 million, the company said. Game Group was able to boost inventories for its online and used businesses last year, said Deputy CEO David Thomas. The retailer also was able to maintain high inventories for videogame hardware, he said. Game opened 47 new stores in the U.K. and Ireland, and 134 new stores in other regions last year, boosting total square feet of retail space by 220,000 square feet to about 1.4 million, he said. It now has 1,335 stores, plus seven franchise locations in Australia, France and Iberia. The company plans to open 70-80 new stores this year, most in Australia, Portugal and Spain, he said. Sixty to 70 of the new stores will be outside the firm’s core U.K. region, Morgan said. More than 9 million current-generation game systems were sold in the U.K. last year, boosting the number of systems in the channel to more than 22 million, she said. About 2 million units of the PS3 were sold in the U.K. to date and the installed base should grow as Sony lowers its price, she said. The Wii continued to perform well last year, driven by strong demand for new game releases including Nintendo’s Wii Fit and Mario Kart Wii, she said. Game Group hasn’t seen any significant change in its France performance since U.S. rival GameStop moved into that market last year via the purchase of Micromania (CED Oct 2 p6), she said. The company recently started efforts to attract Woolworths customers, but it was too soon to gauge results, she also said.