GameStop is restructuring the ThinkGeek business — combining the collectibles chain’s ecommerce business with its own — and weighing options for the brand, company executives said in releasing Q1 earnings

The restructuring shifts buying responsibility for ThinkGeek.com and 42 U.S. stores to GameStop personnel, eliminating what CEO George Sherman called “redundant teams and redundant web properties.” The standalone ThinkGeek.com web is shutting down effective July 2 as it is folded into the main GameStop.com site. About a dozen ThinkGeek jobs were cut in the restructuring.

“We’ll be leveraging off the GameStop platform to still have a presence for ThinkGeek, and still have that brand, at least initially, while we consolidate the backend operations. There’s redundancy between [GameStop’s] collectibles and ThinkGeek that we can run more efficiently,” Sherman said. The restructuring is among the first moves Sherman has made since being hired as CEO in April.  ThinkGeek last year moved its offices from Virginia to Gamestop’s headquarters in Grapevine, TX.

While there was some overlap between ThinkGeek and GameStop stores, ThinkGeek also carries niche properties and had separate DTR deals. It also has has private label brands such as Modern Icons (figures), Geeknet and Geeklabs. It launched as an ecommerce business in 1999 and opened its first physical store in Orlando, FL in 2015, shortly after being acquired by GameStop.

As of Jan. 31, GameStop operated 103 collectibles stores, including 41 ThinkGeek locations and 62 under the Zing Pop Culture banner outside the U.S.

Sherman said GameStop will “declutter” its stores to focus on “key SKUs that drive our business.” The chain also needs to ensure “we have the proper inventory levels and merchandising behind those SKUs.”

Q1 net income fell 75% to $6.8 million as revenue declined 13.7% to $1.54 billion on a 10.3% drop in same-stores. A 10.4% gain in sales of collectibles to $157.3 million was offset by a 34.9% decline in videogames hardware revenue to $233.5 million.

Contact:

GameStop, CFO, Jim Bell, CFO,  817-424-2000