(Reuters) - The world’s largest video game and gaming console retailer GameStop Corp said on Wednesday it will sell its Spring Mobile business to Prime Communications LP for $700 million.

A GameStop Inc. store is shown in Encinitas, California, U.S., May 24, 2017. REUTERS/Mike Blake

GameStop shares were up 11.5 pct at $13.69 in afternoon trade.

Spring Mobile owns and operates 1,289 AT&T wireless stores.

GameStop said proceeds from the sale may be used to reduce debt, fund share repurchases and reinvest in core video game and collectibles businesses.

The Grapevine, Texas-based company had said in September it continues to engage with third parties regarding a possible deal, that may include a sale of the company.

Like most brick-and-mortar retailers, GameStop has suffered from heightened competition from online companies including Amazon.com Inc.

Game retailers have also had to cope with a decline in physical video game sales.

Perella Weinberg Partners LP was acting as financial adviser and Pepper Hamilton LLP as legal counsel to GameStop for the Spring Mobile deal.

J.P. Morgan Securities LLC and SunTrust Robinson Humphrey Inc were acting as financial advisers and Gibson, Dunn & Crutcher LLP as legal counsel to Prime Communications.

The deal is expected to close in the fourth quarter of fiscal 2018, GameStop said.