Nearly half of Game stores to close

 

Almost half the stores run by collapsed retailer Game are to be closed this week, administrators said today, triggering 2,104 job losses.

Administrators at PwC said 277 stores in the UK and Ireland are to shut but the remaining 333 stores, which employ 2,814 staff, will continue to trade while they try to find a buyer for the remainder of the business.

The UK operations of the retailer, which trades as Game and Gamestation, collapsed into administration after it suffered dire trading in recent months, while some suppliers refused to stock the business.

Mike Jervis, joint administrator and partner at PwC, said: "The recent job losses are regrettable but will place the company in a stronger position while we explore opportunities to conclude a sale.

"My team and I will be doing all we can to help the affected employees at this difficult time."

The group's lenders were reportedly working on plans to buy a slimmed-down version of the retailer out of administration.

A consortium of existing banks led by state-backed Royal Bank of Scotland is understood to be among three potential bidders, along with American rival Gamestop and OpCapita, which recently acquired consumer electronics business Comet.

Mr Jervis said he believes that there is still room for a specialist video games retailer in the UK despite the difficult conditions it has suffered in recent months and remains hopeful the business can be sold as a going concern.

Game, which also employs about 385 staff at its headquarters in Basingstoke, Hampshire, last week said it planned to appoint an administrator, having admitted there was no value left in the company.

The chain's demise follows a string of profit warnings and the failure of nervous suppliers, including Electronic Arts and Nintendo, to go on providing new games.

The retailer had a £21 million rent bill due yesterday and faces a £12 million wage bill this weekend, although PwC is expected to honour any wages owed. There is also £10 million in VAT and £40 million owed to suppliers.

Game suffered a dismal Christmas and was later forced to ask suppliers for more generous trading terms.

But many stopped supplying it with new releases, such as Mass Effect 3 and Street Fighter X Tekken, leaving fans disappointed and adding to the group's trading woes.

Game agreed fresh lending facilities with banks last month and began seeking access to alternative sources of funding earlier this month.

The group has already signalled that losses for the year to the end of January are likely to be around £18 million.

PA

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