GameStop (GME) Is Acquiring At&t Stores For A Big Reason

Posted on

GameStop announced on Tuesday that the acquisition of more than 500 AT&T stores will push the company’s technology brands business toward $200 million in operating earnings by 2019.

It was in 2013 when GameStop acquired its first AT&T store and since has tacked on 507 AT&T stores to its portfolio with the acquisition of three national AT&T authorized retailers: Cellular World Corp., Midwest Cellular Inc. and Red Skye Wireless.

According to Bloomberg, the locations are spread across 26 states, with a majority in Texas, Missouri and Oklahoma.

With 1,421 AT&T mobile stores, GameStop is the mobile company’s largest authorized retailer.

GameStop said it will offer more information on the deals in its second quarter earnings call, to be held Aug. 25.

The company offered $475 million worth of senior notes earlier this year to fuel acquisitions, and the store purchases took up a bulk of that funding, Bloomberg added.

According to the company’s senior vice president of U.S. stores, Jason Cochran, partnering with AT&T (NYSE: T) is important not just to offer mobile products, but because it presents the opportunity to expand into other AT&T offerings like DirecTV, Connected Life and connected cars.

Cochran told the Dallas Business Journal back in June, “We can make those technologies affordable because of our buy/sale/trade model.”

GameStop is also the largest retail distributor for Cricket Wireless and offers Cricket products at roughly 3,400 of its U.S. stores and operates around 70 Cricket-branded stores. Cricket Wireless is owned by AT&T.

Disclaimer: We have no position in GameStop Corp. (NYSE: GME) nor AT&T Inc. (NYSE: T) and have not been compensated for this article.