Game Group finds play on the high street challenging
For the first 22 weeks to 2 July 2005, total group sales were up by 6.3%. Lfl group sales for the same period were down by 2.6%.
In the UK and Ireland total sales were up by 0.5% and lfl sales were down by 5.4%. In Continental Europe total sales and lfl sales were up by 37.2% and 12.0% respectively.
The successful launch of the Nintendo DS in March mitigated an otherwise tough retail environment. As reported in April gross margins have reduced reflecting a higher proportion of lower margin hardware sales and cyclical deflation in software selling prices, which is consistent with the previous cycle. Consequently the group anticipate that first half gross margin will be 100 to 125 basis points lower than the corresponding period last year.
Trading conditions continue to be challenging with ongoing price deflation and a continued lack of strong software releases.
The planned September launch of Sony’s new handheld ‘PSP’ should benefit the groups second half combined with a Europe wide store opening programme which aims for bring the the total number of stores to over 700 by the key Christmas trading period.
The 2006 launches of Xbox 360 and PlayStation 3, are expected to make significant contribution to sales in 2006 and beyond.
