Game chief executive quits as profits fall by more than a quarter
Thursday 22 April 2010
Lisa Morgan stepped down as chief executive of Game yesterday after the video game retailer reported a 28 per cent slump in full-year profits.
The news prompted a 12 per cent fall in Game shares, which closed down 12.1p at 89.3p. It also weighed on other computer game retailers, with the books and DVD seller HMV tumbling by 5.2 per cent, or 4.4p, to 80.6p and DSGi, the owner of Currys and PC World, down by 2.2 per cent.
Game said that Ms Morgan, who has been at the retailer for 14 years and has been Game's chief executive since 2006, had indicated her desire to step down earlier this year to "pursue other opportunities". She is leaving with immediate effect.
Terry Scicluna, the UK chief operating officer, is also stepping down but he will remain with the business through a handover period.
Game has appointed one of its non-executive directors, Chris Bell, who was previously the chief executive of the bookmaker Ladbrokes, as its interim chief executive while it searches for a replacement for Ms Morgan.
The departures follow a troubled year for the group that has included two profit warnings as the pipeline of blockbuster games has slowed down.
The retailer also announced plans yesterday to shut more than 100 of its 677 UK stores by the end of 2013 to save money.
For the year to 31 January, pre-tax profits at Game tumbled by 28 per cent to £84.1m, on group sales down by 10 per cent to £1.78bn. The retailer's group like-for-like sales on stores open more than one year plummeted by 15 per cent.
Given the migration of Game's revenues online, industry experts have expressed long-term concerns over the size of Game's high street presence. It has 703 stores outside the UK and currently gains 94 per cent of its revenues from its store base. But the retailer is also being squeezed by the supermarket muscling in on its categories.
In the UK and Ireland, underlying sales fell by 17.3 per cent, but this downward trend has accelerated since its year end. In the 11 weeks to 17 April, Game's UK and Ireland total and like-for-like sales tumbled by 20.8 per cent and 20.1 per cent, respectively.
However, Peter Lewis, the chairman of Game, pointed out that its pre-tax profits, before non-recurring costs, of £90.4m were the "second best trading performance in its history".
He said: "Our results were delivered against the backdrop of a very difficult trading environment, which saw the global PC and video games market decline by over 20 per cent. We outperformed the market."
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