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GameStop Acquires AT&T Cellular Retail Chains

2 Aug, 2016 By: Erik Gruenwedel

Video game retailer becomes largest authorized AT&T wireless retailer

With packaged-media video game sales slowing, GameStop, the nation’s largest video game retailer, has mandated diversifying revenue sources, including generating 50% of operating income from disc sales by 2019 — up from 25% in 2015.

GameStop Aug. 2 announced the acquisition of three national AT&T authorized retailers: Cellular World Corp., Midwest Cellular, and Red Skye Wireless, adding 507 stores to its technology brands business.

The acquisition makes GameStop AT&T's largest authorized retailer with 1,421 mobility stores. GameStop is also the largest retail distributor of Cricket Wireless, with Cricket products and services available in 3,400 of its domestic GameStop locations.

"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," CEO Paul Raines said in a statement.

In addition to cellular, GameStop has aggressively entered the trend business, targeting consumers of collectibles such as action figures, T-shirts, posters, buttons, pins and related souvenirs.

A year ago, GameStop began downsizing in-store space devoted to physical games as it upped collectibles and trend.

Dubbed “Loot,” the business unit started as an experiment in Australia in 2013 and now represents GameStop’s fastest-growing segment. The retailer plans to incorporate recently acquired e-commerce site ThinkGeek into the merchandise fold as well, selling collectibles related to Marvel, “Game of Thrones,” “The Big Bang Theory,” “Star Trek,” “Star Wars” and “Doctor Who,” among other brands.

“As we see opportunities, we will continue to remodel GameStop stores to give more linear footage to Loot merchandise and less to video games,” Raines said last year.

It should also have a larger share of the market. Erstwhile subsidiary MovieStop (which GameStop spun off in 2012) and Hastings Entertainment are shuddering operations despite allocating significant resources on trend.

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