GameStop Corp. GME, which launched its new Technology Brands segment in 2013, reached an important landmark with the opening of its 1,000th technology brand store. GameStop is now not only the biggest game retailer in the world but is also a major AT&T, Inc. T as well as Apple Inc. AAPL authorized specialist in the country.
The company launched its technology brands after purchasing the biggest certified reseller of Apple products, Simply Mac and AT&T’s Spring Mobile. In 2013, the company also signed a deal with AT&T to sell its Cricket Wireless service. This deal is helping the company to enhance its presence in the mobile services arena by providing Cricket Wireless a stable platform to widen its country-wide reach.
Ever since GameStop’s acquisitions in 2013, the Technology Brands segment has grown by a whopping 588%.
GameStop Technology Brands senior vice president, Jason Ellis said: “Each new store opening reinforces our goal of expanding our national footprint to address the insatiable demand for value, variety and convenience to customers in markets that previously have been underserviced.”
Collaboration with AT&T and Apple has proved to be lucrative for GameStop. Spring Mobile is now AT&T’s biggest dealer in the U.S. In the third quarter of fiscal 2015, revenues from Technology Brands increased 64.2% year over year. Further, the segment is expected to sustain its growth momentum as the company is keen on rapidly expanding its footprint.
The company expects profits from the tech brand to increase significantly in the fourth quarter. Management projected Technology Brands to generate over $1.4 billion in revenues and nearly $170 million in operating income by the end of 2019.
Zacks Rank
GameStop currently has a Zacks Rank #3 (Hold). The Kroger Co. KR is a better-ranked stock worth considering in the retail sector, holding a Zacks Rank #2 (Buy).
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