Game Digital and The Works both published their latest figures today. Game is moving its emphasis towards in-store experiences, through its gaming arenas, while The Works says sales are growing both online and through stores.
Game Digital today said it had made “important strategic progress” during a year in which it repositioned and right sized its UK retail business, making a move from lower margin retail sales to higher margin gaming experiences through by expanding its Belong arenas.
It says its ongoing partnership with Sports Direct, to roll-out the Belong arenas, has the potential to take the concept to a “significant” number of new location, including Sports Direct stores. But despite the move towards experiences, Game said retail remained core to its sales and profitability, with retail sales improving where Game was next to a Belong arena. “Moving beyond retail to an experience and service offering will row our retail revenues, reduce the risks associated with the cyclical nature of the gaming industry and provide long-term sustainable returns for our shareholders,” it said. By way of context, the retailer made UK retail revenues of £471.9m (-3.9%) and Spanish retail revenues of £296.6m (+6.5%) during its latest financial year, while its events, esports and digital division, which includes Belong arenas, made revenues of £13.8m (+4.5%).
Chief executive Martyn Gibbs said: “Despite the challenges facing our core retail business and the difficult wider retail environment, we are making good progress on our strategic initiatives to ensure we continue to meet the needs of gamers, our customers and our supplier partners as we transform our business to become a leading provider of gaming experiences and services.”
He added: “Our core UK and Spain console markets have remained in growth this year, driving a strong sales performance and we are constantly improving our multichannel customer proposition in our stores and online to maximise on these opportunities.”
The update came as the company behind Game, a Top50 retailer in IRUK Top500 research, reported its full-year results to July 28. Full-year revenues came in at £782.3m, marginally down by 0.1% on the same time last year. Pre-tax losses narrowed by 26% to £7.4m.
In the second half alone, digital currency and console accessories associated with the rapid growth of Fortnite and other Battle Royale games performed strongly.
By the end of the year, it said, 2.1m shoppers had registered its app in the UK and Spain, while its loyalty scheme has 4.5m active customers, and the Game Elite membership scheme has 56,000 active members. Developments to its multichannel proposition over the year included an online trade-in service, extra delivery options and ecommerce and m-commerce updates. It also said it was pursuing a strategy of reducing fixed rental costs: currently its UK business has an average lease length of break of 0.9 years; as of the year end, 25 stores were on zero rent and 99 are on flexible arrangements, most often a three-month rolling break option. During the year it closed 29 stores where rent and savings could not mitigate projected future trading performance.
By the end of the year, it operated more than 540 stores in the UK and Spain. As of today, players could book to play at 21 Belong arenas via the Game website.
Value books-to-crafts retailer The Works said growth in-store and online had helped to lift revenues by 15% during the first half of its financial year, with like-for-like sales growth up by 3.8%.
The Works, a Top150 retailer in IRUK Top500 research, said the figures reflected strong sales across channels, and the popularity of Squishies mitigating sales from last year’s mega trend, Spinners.
Kevin Keaney, chief executive of The Works, said: “We’re pleased with our performance in the first half of the year, with good sales growth in our existing stores and in ecommerce, the continued execution of our store opening strategy and a successful IPO.
“As we enter the busy Christmas period, we remain focused on delivering for our customers through our unique multichannel offering, which continues to buck the trend in retail.”
By the end of the half-year, The Works operated 479 stores, including 32 opened during the period. It said that it continued to trade in line with expectations for the full year. During the full year it expects to open a total of 50 new stores.
Image courtesy of Game Digital