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Game hails early multichannel results, but sales still down

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Game is seeing early results from its new strategic focus on multichannel, the video games retailer said today.

The company, which earlier this year announced a strategy to grow its market share by joining up its ecommerce and high street operations, said in an interim management statement issued today that although its sales had fallen by almost 10% like-for-like in the 19 weeks to June 11 it had continued to see its share of the market widen. It now claims 19% of sales in the sector, compared to 13% at the same time last year.

Chief executive Ian Shepherd said: “We are seeing early results from the strategic initiatives we outlined in February, even though the video games market has been more challenging than anticipated. Our strategy is designed to strengthen our leading position and drive growth as the market transitions and evolves over the next five years.”

Its refocused strategy is aimed at increasing sales in a declining market for video games. Game said today that its sector had seen revenue fall further than forecast by 12.8% in the last 19 weeks. Software sales fell by 14.1% and hardware by 10.3%.

In that period Game group sales fell by 11.3%, or 9.4% on a like-for-like basis, compared to the same time last year. UK and Ireland store sales were down by 11.5%, or 9.1% like-for-like while online sales were up by 2.4%.

In the last seven weeks, said the company, like-for-like sales had improved to the point where they were 4% down on a like-for-like basis. The company forecast revenues staying flat or falling by up to 3% in its 2011 financial year, better than the 10% fall expected across its market. It said it aimed to reduce operating costs by as much as £8m “as we adapt our operations to fit the lower revenue profile.”

Other strategic priorities include selling more products digitally while increasing its range of products “that customers cannot buy elsewhere.” In the last seven weeks, it said, its digital sales have risen by 33%, compared to the same time last year. It is set to move its website, game.co.uk, to a new platform in the summer.

Its loyalty programme is being used to strengthen customer relationships. In the last seven weeks, said Game, 300,000 new customers have joined, taking its total membership to 17.3m. Personalised campaigns are to be launched in order to increase its 'super user' count.

The chain is also right-sizing its store network through a series of closures – it has already closed 20 shops – while aiming to increase footfall by 1%. Priorities also include developing new payment methods and driving new ways to buy, such as preowned and trade-in.

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