Entertainment retailer Game Group is holding a strategic update meeting for analysts today to set out the company’s strategy for turning around falling sales.
In a statement issued this morning the retailer confirmed that it will be investing the £15 million it expect to make through cost cutting over the next year in improving its interaction with customers both online and in-store.
Game hopes customer relations management initiatives and improvements to its multichannel offering will help it improve on recent performance, with a Christmas period like-for-like trading decline of 7.9 per cent following a first half total sales drop of 10.9 per cent year-on-year.
Ian Shepherd, Group CEO, commented: “Today is an important day for Game as we set out our strategic direction for the business. Importantly we will set out how we will invest behind our strategy and give clarity about how we will track delivery of our plans.
“Over the next three years we are confident that the delivery of our strategic goals will be profit enhancing. The activities announced today will increase our revenues from new and existing channels, which will improve overall profitability.”
In an evolving marketplace fellow entertainment retailers such as HMV Group have been hit by an increase in online sales through sites like Amazon and the increasing popularity of downloading media.
Game announced a store closure plan in April 2010 and although no details of further cost-cutting were announced today, Shepherd confirmed that it will continue to tighten its belt.
“The gross margin percentage will decrease as online and digital revenues become a larger part of our sales mix,” Shepherd added.
“In 2011/12 we anticipate there will be a margin impact of around 100 base points as we reposition our business to be truly multichannel.”