More than 2,000 UK jobs were axed yesterday, as Game Group closed hundreds of shops after the company collapsed into administration.
The beleaguered video games retailer, which had 610 UK stores, was unable to meet a £21m second-quarter rental payment due on Sunday and appointed the accountancy firm PwC as administrator.
It is the biggest failure of a UK-listed retailer since Woolworths collapsed in November 2008.
PwC moved quickly to close 277 unprofitable stores, which will result in 2,089 redundancies among Game's 5,303 UK employees this week.
The games retailer employs a further 4,000 people overseas, where it has 663 stores in countries including Australia and France.
Mike Jervis, the joint administrator at PwC, blamed "serious cashflow and profit issues over the recent past" for Game's demise. He added it had also "suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements".
While PwC will continue to operate the remaining 333 UK stores, the accountancy firm is thought to be working to a timetable of days, rather than weeks, to find a buyer for parts of Game.
This is the preferred option, but the retailer's syndicate of six lenders, including taxpayer-owned Royal Bank of Scotland, HSBC and Barclays, are also discussing a debt-for-equity swap.
This would involve the lenders buying parts of the UK business and hiring a management team to run a much smaller version of the chain until it can be sold.
GameStop, the world's biggest video games retailer, is interested in bidding for the rump of Game's troubled UK business. The US giant has also been eyeing its better-performing operation in Spain, as is the retail restructuring firm Hilco.
Game's fortunes of Game have unravelled rapidly this year, as its sales plummeted and major suppliers have withheld their latest games.
Ian Shepherd, Game's chief executive, who has now ceded control to PwC, has always maintained that the group was not "structurally challenged" but merely battling a slow pipeline of blockbuster releases and a downturn in consumer spending.
But the widely held view is that Game could not keep up with the surge in digital downloading. It also failed to combat the onslaught from online specialists, such as Amazon, as well as the big supermarkets.
Game filed a notice of intention to appoint PwC as administrator last week and suspended trading in its shares at 2.39p.
The retailer had posted profits of £84.21m two years ago, while its share price had been above £1 in March 2010.
Three big suppliers – Electronic Arts, Capcom and Nintendo – have withheld their latest products from the retailer in recent weeks, driven by deep concerns about Game's credit worthiness.
Game made an estimated loss of £18m in the year to 31 January, following two profit warnings either side of Christmas. Its like-for-like sales in the UK and Ireland plummeted 15.2 per cent for the eight weeks to 7 January.
The retailer's banking syndicate turned down a rescue bid for the UK business from the distressed investor OpCapita last week.