Game has won early successes in its three-year strategy to transform itself into a truly multichannel retailer to fight falling sales, chief executive Ian Shepherd has claimed.
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He said the games specialist’s online market share had risen from 13% to 18% since it started its plan in February, when Game said it aimed to triple online sales to £300m by 2013. “There are early signs of delivery of strategy,” said Shepherd. “Online market share is up, footfall conversion is up and digital revenues are growing strongly.”
Game’s strategy involves aiming to drive sales by capitalising on new revenue streams, such as downloads and mobile gaming. Initiatives include re-engineering stores to become multichannel hubs as well as relaunching its websites.
In the year to January 31 digital revenues surged 27% to £41m. Since year end they have increased 28%. However, Game’s overall sales continue to drop in a tough market. Group turnover fell 8.3% to £1.6bn, while pre-tax profit slumped from £84.2m to £23.1m in the year.
Group like-for-likes fell 6.7%, but Shepherd said the performance beat the overall market, which reported a drop of 9.9% in the period.
Game’s like-for-likes in the UK and Ireland declined 9.8%. “The market is tough but I’m encouraged,” said Shepherd. “We’ve been outperforming the market.”
Current trading remains difficult, with group like-for-likes down 12.1% in the 12 weeks to April 23. But Shepherd insisted “all the action happens in the second half”, when the crucial Christmas period falls.
He expects Game to increase sales by between 2% and 5% in this financial year, backed by its new multichannel strategy, its loyalty programme and its pre-owned offer.
While Nintendo said sales of its 3DS console had disappointed, Shepherd insisted Game “did very well out of it”. He added: “We took a very high market share.” When new product was released, “customers want to talk to the specialist”.
Peel Hunt analyst John Stevenson said Game’s strategy was “credible”, adding that its falling sales did not mirror the long-term decline of rival HMV, which has issued a string of profit warnings.