Officials from UK based video games retailer GAME have released details of an interim financial report for the first 45 weeks of 2007, which show an 89.1 percent increase in sales overall sales across the company, with like-for-like sales up 44.1 percent in the same period.
Sales in the UK and Ireland, where the majority of the group’s stores are based, were up 92.3 percent and 46.1 percent like-for-like. International sales were up 80 percent with like-for-like sales increasing by 38.2 percent.
The company attributed the sharp sales growth to the Nintendo DS and Wii in particular, although indicated there had been strong consumer demand for all product formats. The company has increased its number of stores by 333 during the year-to-date, for a total of 1,150 stores active during the Christmas gift giving season.
Describing the UK trading environment as “very competitive”, chairman Peter Lewis warned that lower margins on hardware and from the recent acquired Gamestation chain would reduce the company’s overall gross margin for the full year. The gross margin figure is now estimated to be around 275 to 325 basis points lower than last year’s figure of 27.2 percent.
The cost of complying with the ongoing Competition Commission inquiry
into the purchase of Gamestation is put at around £4.5 million. Non-recurring charges of around £5 million will also be incurred in integrating the two companies, around £3.5 million of which will be spent in the first year. An extra £3 million is also expected to be spent on IT and distribution infrastructure integration.
“We are very pleased with our performance for the year to date and we look forward to the key Christmas trading season. There is an unprecedented range of products for our customers albeit we anticipate that demand will outstrip supply particularly for the Nintendo Wii format. However, the Board remains confident of a successful outcome to the year,” said Lewis.