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UK GAME Group Sales Soar Over Christmas
by David Jenkins [PC, Console/PC]
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January 13, 2009
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UK retailer GAME has reported sales up 16.6 percent in the six weeks ended January 10th, 2009 -- and in addition to the Christmas boost, the company saw revenues grow 24.2 percent over the last year, trumping market expectations.
The company says Call of Duty: World at War, FIFA 09, Fallout 3, Need for Speed: Undercover, Guitar Hero: World Tour were the best-selling multiplatform releases of the season.
However, GAME also described "exceptional consumer demand" for platform-exclusive titles such as Mario Kart Wii, Wii Fit, LittleBigPlanet, Gears of War 2, Fable II, Brain Training (aka Brain Age) and Professor Layton and the Curious Village.
Sales for the six weeks to Christmas were up by 5.4 percent year-over-year, with total sales for the UK and Ireland increasing by 16.3 percent in total revenue (10.0 percent like-for-like, comparing only stores that were owned by the company the previous year). Total sales for the group’s international outlets were up by 17.3 percent, although this actually represents a 3 percent decrease in comparable store sales.
Total sales for the entire 50 weeks to January 10th 2009 in the UK and Ireland were up by 22.7 percent (11.4 percent in comparable store sales), and overall international sales for that period rose by 28.1 percent (up 5.0 percent in comparable store sales).
As a result, the group’s gross margins are slightly ahead of guidance, with the integration of the Gamestation chain also expected to deliver synergies of £10 million ($15 million), rather than £9 million ($13 million), by the end of January. The company now expects pre-tax profits to be no less than £122 million ($179 million), again slightly ahead of expectations.
Although the collapse of Woolworths and distributor EUK caused serious financial and stock problems for UK games publishers in 2008, the company’s problems benefited GAME. Less severe financial and distribution issues at major retailer Zavvi also helped GAME during the period.
"The Group has delivered a strong Christmas sales performance in a very difficult trading environment," said chairman Peter Lewis. "The existence of five successful hardware formats throughout the year has, as anticipated, led to an increase in the proportion of higher margin software in the sales mix."
"The board is cautious about the outlook for 2009 and is aware that general economic conditions are likely to deteriorate further. Revenue growth for the group will be challenging and there will continue to be inflationary pressures on costs," he added.
In related news, the company also announced today that Terry Scicluna will join the GAME board as COO for UK and Ireland. Scicluna joined GAME in October 2008 and boasts 30 years experience in retail.
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