Shares in Game Digital dropped by more than 50 per cent this morning after the video games shop chain admitted that Black Friday had been a disaster.
After the markets closed last night, the company revealed it had made too many bargains available on the 28 November one-off discount day which has come under fire from a host of major retailers including Next and John Lewis.
Game admitted it had offered so many discounted bundles of PlayStation 4 and Xbox One consoles with games on Black Friday that shoppers stocked up then rather than buy at full price in the run-up to Christmas.
Consoles were regularly being sold in packages with three games thrown in.
The Black Friday effect exacerbated what was already "unprecedented" discounting from rivals, the company said. That led to concerns about profit margins at stores such as Argos.
As a result, Game’s margins took a hammering and annual profits that were expected to come in at £63.8m are now expected to be flat on 2013's £51.3m.
The company's share fell as low as 153p, having closed at 348p on Tuesday night.
Game said its strategy was to chase as big a share of the new PS4 and Xbox One consoles market as it could to win future games customers.
Game’s chief executive, Martyn Gibbs, said: "We now have a huge customer base within the new formats, to sell both mint and pre-owned physical and digital content and accessories to over the long term."
But that strategy came at a heavy price: while it sold 25.1 per cent more consoles during the six months to 10 January, turnover in pounds and pence fell 5.4 per cent.
The biggest loser from today’s share price fall will be Elliott Management, the vulture fund famed for being one of the "holdout" creditors who refused to accept Argentina’s debt forgiveness deal. Elliott owns nearly half of Game, having bought it out of administration. It is still sitting on a £273m profit from the takeover.Reuse content