Will Amazon’s Kindle Help Revive GameStop?

With many big-box retailers like Wal-Mart (NYSE:WMT) and Target (NYSE:TGT) declining to to carry Amazon’s (NASDAQ:AMZN) Kindle devices, industry experts have speculated whether the Internet retailer would open brick-and-mortar stores of its own. However, as CNET reported on Monday, that step will not be necessary; customers will be now able to try out and buy any one of the Kindle Fire tablets in person at GameStop (NYSE:GME).

Why Did Wal-Mart and Target Turn Down Amazon?

When Wal-Mart decided to not to carry Amazon’s Kindle tablets in September, the company told Reuters that the decision was “consistent with its overall merchandising strategy.” However, many analysts believe the decision was made for more tactical reasons. Because Amazon sells its Kindles at very low margins, retailers do not make significant profits from the devices’ sales. But margins were not the only reason for the retailers’ decision. “I think part of it could be margin, though the bigger point is that Wal-Mart and Target view Amazon as a competitor,” Caris & Company analyst Scott Tilghman told the publication.

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