Operating losses at Irish arm of Gamestop hit €3.5m
OPERATING losses at the Irish arm of Gamestop – the video game retailer – widened substantially to nearly €3.5m in the 12 months to the end of last January, from €2m a year earlier.
The deterioration in its performance came as it incurred a €3.3m cost related to a "fundamental restructuring", consumers cutting back on spending and the impact of a lack of any new gaming consoles being brought to market.
New accounts for the business show that revenue fell 7.5pc to €57.3m. Directors at the company said they considered the full-year performance to be satisfactory given the economic climate. The pre-tax loss amounted to €8.3m for the financial period, up from €3.3m the previous year when the company incurred a €556,000 restructuring charge.
The firm, which employs close to 400 people, had accumulated losses of €15.6m at the end of the financial year. It operates around 50 stores here.
The Irish operation was founded by Kevin Neary and Michael Finucane in 1994. They sold a 51pc stake in 2003 to US-based Gamestop and later a further 16pc for an accumulated €20m.
Mr Neary resigned as a director of the Irish business in December 2011 and Mr Finucane in May last year. The company said that between 2012 and 2013 it will review the development of its store network.
"We will open new stores where we can identify a profitable opportunity and we will consider closing any stores that are not performing to expectations," the current directors state.
"We also plan to expand our offering of complimentary digital gaming products."
The directors note the accounts has been prepared on an on-going concern basis because of the support of the US parent.
"The gaming business moves in cycles in line with the launch of new consoles," they add.
"We are near the bottom of the current cycle and independent analysts see a recovery in the market over the medium term."