Game’s overall group sales edged up by just 0.1 per cent last year, driven by an improved performance in its second half.
In its full-year fiscal period ending July 29, the video game retailer’s UK sales were down by 6.8 per cent, but this could’ve been worse had it not been for the 8.8 per cent uptick in sales it experiences in the second half.
The stronger second half was fuelled by the successful launch of the Nintendo Switch console, despite a kerfuffle in June which saw Game struggle with supplier problems that led to a low supply of it as well as a profit warning.
Game’s overall full-year sales rise, although minimal, was also boosted by growth of more than 22 per cent in its Spanish market.
Shares at the retailer were up by almost 20 per cent just minutes after the markets opened this morning, with investors feeling encouraged by its turnaround initiatives that were starting to bear fruit.
Earlier this year, Game announced plans to deliver £5 million of cost reductions over the year, though some of this will be offset by rising staff costs.
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Partnerships with other major retailers is part of its turnaround plan, with two concessions with WHSmith already in operation as well as trial concessions with four Maplin stores just announced this week.
The shop-in-shops could stave off potential store closures for Game, with opportunities “to gain or retain” high street locations – especially with 220 store lease renewals due by the end of 2018.
In addition, last year it launched its Belong gaming arenas, and now has 18 Belong sites where customers compete against each other on consoles within the store.
Meanwhile, Game said the development of its e-sports activities following a review have been given a higher priority.
“It is intended that the group will focus management and capital resources on the acceleration of the development of the e-sports and live gaming initiatives,” the company said in its trading update today.
Chief executive Martyn Gibbs added: “We have been encouraged by the recent growth in both the UK and Spanish markets overall and we expect that this momentum will continue into peak trading driven by the benefits of continued customer demand for the Nintendo Switch, the launch of Microsoft’s Xbox One X and a strong line up of new games releases.
“Game has now opened 18 Belong arenas, and we have seen encouraging early performance.
“We have reviewed our operations and are now accelerating development plans as we seek to fully capitalise on the strong growth potential in our exciting and growing esports activities.”
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