GameStop is getting out of the mobile phone business as it moves to sharpen its focus on videogames and collectibles.
GameStop Corp. has entered into an agreement to sell its Spring Mobile business to Prime Communications L.P. for $700 million. Spring Mobile owns and operates a network of 1,289 AT&T wireless stores. The transaction is expected to close in the fourth quarter.
The move is in line GameStop’s previously announced review of its strategic and financial alternatives.
“This transaction enables GameStop to enhance our performance with an increased focus on the video game industry and the rapidly-growing collectibles space,” said Dan DeMatteo, executive chairman of GameStop’s board of directors. “These are areas where we have considerable experience and where we are well positioned to capitalize on our competitive position.”
GameStop said proceeds from the sale will be used to reduce the company’s outstanding debt, fund share repurchases, reinvest in core video game and collectibles businesses to drive growth, or some combination of these options.
In September, the retailer reported mixed results for its second quarter and confirmed it is considering a potential sale of the company among other options.
GameStop operates over 7,100 stores across 14 countries.