GameStop Acquires 507 AT&T Stores in Diversification Planby
Purchase of three chains boosts wireless unit to 1,421 stores
COO Bartel sees profit of up to $100 million from mobile
GameStop Corp. acquired 507 AT&T wireless stores as part of a drive to diversify and reduce its dependence on sales of video games.
The stores are located in 26 states, with the biggest share in Texas, Missouri and Oklahoma, Tony Bartel, GameStop’s chief operating officer, said in an interview. He declined to reveal the purchase price but said it amounted to the bulk of the $475 million the Grapevine, Texas-based company raised in a debt offering this year.
“Video games are cyclical,” he added. “We said, ‘Let’s take our real estate experience and extra capital that we have and see if we can diversify.’ ”
GameStop, the largest independent retailer of video games, has been trying to add new businesses as more purchases of video games take place online. The company’s wireless retailing is on pace to produce $1 billion in annualized sales this year and profit of $85 million to $100 million, Bartel said.
The stores were acquired from three companies, Cellular World Corp., Midwest Cellular Inc. and Red Skye Wireless Inc. The deal expands the company’s AT&T wireless stores to 1,421, making GameStop the largest authorized AT&T Mobility retailer.
In the first quarter, mobile and consumer electronics sales contributed 9.8 percent of GameStop’s revenue.
GameStop fell 3.3 percent to $29.36 at 11:19 a.m. in New York. The shares had climbed 8.2 percent this year through Monday.