GameStop can’t be too thrilled with a new move by Walmart.
The retail giant (NYSE: WMT) said this week it’s introducing in-store collectibles sections that will feature items such as Marvel’s Thanos villain, Dallas Cowboys players and a character from Netflix's Stranger Things. The areas will feature exclusive items designed for casual and hard-core collectors alike.
That’s likely tough news for GameStop (NYSE: GME), which sees the area of collectibles as a key growth driver. Already, the Grapevine-based company is grappling with a gradual shift to online purchases that’s eating into its traditional hard-cased games.
GameStop is "pursuing the many opportunities available to us in the collectibles business,” Shane Kim, interim CEO, said on a call with analysts last month. “Already a $12 billion market in North America alone, we continue to grow that business and take market share in what is a very fragmented market.”
During the quarter ended Aug. 4, GameStop's collectibles sales increased 16 percent to $142 million, driven by continued expansion of licensed merchandise offerings, improved product offerings and notable growth in apparel, the company said. That’s in sharp contrast to overall sales dropping by 2.4 percent.
Walmart sells traditional video games as well, though GameStop also offers used versions at a discount. More than 3,500 Walmart stores will add the dedicated collectibles areas starting later this month. Among the choices for shoppers there will be merchandise like Harry Potter collector boxes, video games like Fallout, and PlayStation consoles. Products will be provided by CultureFly.
“I am confident that consumers will fall in love with the assortment and feel like they are walking a mini comic-con at their local Walmart," Edward Erani, CultureFly's co-founder, said in a prepared statement.
Kim expressed optimism about his company’s prospects during the quarterly call last month, saying his company is uniquely positioned. He also said the company is exploring ways to interact with customers beyond the physical stores, including digitally.
Still, shareholders are watching GameStop closely after it announced last month that it continues to engage with third parties around a potential transaction. The board is conducting a “comprehensive review of strategic and financial alternatives, including, but not limited to, a potential sale of the company,” Dan DeMatteo, executive chairman, said in a statement.
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