GameStop Crop. agreed to buy 507 AT&T wireless stores, a move to expand its store base across United States and reduce its dependence on sales of video games.
The stores are located in 26 states. The video game giant will acquire the wireless stores from three companies, Cellular World Corp., Midwest Cellular Inc. and Red Skye Wireless Inc. Purchase of three chains boosts GameStop’s wireless unit to 1,421 stores
“Video games are cyclical,” GameStop’s chief operating officer Tony Barel said. “We said, ‘Let’s take our real estate experience and extra capital that we have and see if we can diversify.’”
GameStop has been struggling in recent years as more purchases of video games take place online. The largest independent video games retailer has been trying to diversify its business by entering the mobile space. In 2013 GameStop acquired an AT&T retailer, Spring Mobile, in a deal that included around 90 stores. Now the company already become the largest authorized AT&T Mobility retailer and the largest retail distributor of Cricket Wireless with Cricket products and services available in 3,400 of its U.S. GameStop locations.
“Today’s announcement showcases the strength of our relationship with AT&T and fortifies our diversification efforts,” GameStop CEO Paul Raines said. “With the continued investments in our Technology Brands business, we are on track to achieve our goal of generating $200m of operating earnings in this growing segment by the end of 2019.”