Retailer Gamestop have announced that they’re no longer looking for a buyer for the company. This news comes a while after rumors surrounding an imminent company purchase made their way around the internet. The rumors surrounded Apollo Global Management and Sycamore Partners, which it was said were in talks with Gamestop regarding the purchase of the company.
At the time of these discussions shares in Gamestop fell by nearly 10 percent to $14.91. Investors have been excited about the company’s acquisition before, but for now it looks like a sale isn’t going to happen.
In a statement to press a spokesperson for the games retailer said that the Gamestop company board have now terminated the efforts working on locating a buyer for the company. The reason for this decision is lack of financing that would make the acquisition of the company acceptable to prospective buyers.
When investors spoke out against Gamestop last year due to falling returns, a strategy was presented to them, which included the sale of the company as one possibility. It appears that now that avenue cannot be explored any further, so others will need to be.
Previously Gamestop sold their Spring Mobile business in an effort to raise funds for over $700 million. The chain of stores were part of Gamestop’s diversification process, which aimed to broaden the company’s business beyond games. In addition to Spring Mobile Gamestop also acquired retailers ThinkGeek, a collectibles retailer, and Simply Mac, which is a chain of Apple-certified stores.
When Spring was sold Gamestop said that their main focus would be video games and collectibles once more. However it seems as though this focus hasn’t paid the dividends that it was expected to.
As of yesterday Gamestop’s share price had fallen by over 25 percent, dropping to $11.59. Gamestop isn’t the first physical games retailer to feel the strain of the growing digital marketplace, but if the company doesn’t do something quick it could disappear completely. UK retailer GAME branched out with their Belong arenas, areas where gamers can come and play titles on high-end PCs. Whether a similar option exists for Gamestop, if they’re in a position to take advantage of it financially, it could be their saving grace.