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GAME needs 180 million to avoid collapse - report

GAME needs 180 million to avoid collapse - report

Mon 19 Mar 2012 8:08am GMT / 4:08am EDT / 1:08am PDT
BusinessRetail

Wages, rent, VAT, suppliers and banks leave high-street retailer with a daunting task

The Game Group has one week to raise the 180 million necessary to avoid an imminent collapse.

According to a report from the Press Association, the embattled high-street retailer has a rent payment of 21 million due on Sunday March 25, and a 12 million wage bill at the end of the month.

In addition, it owes over 10 million in VAT and 40 million to various suppliers, while an investor would need 100 million to pay the company's banks.

If The Game Group cannot meet its rent and wage bills, or find an investor able to meet its mounting debts, 1300 stores face closure and 10,000 jobs will be at risk.

In recent weeks, the company has been unable to agree terms with a number of publishers to secure new stock, including Activision, Microsoft, EA and Capcom.

The situation has resulted in a number of key titles - Mass Effect 3, Resident Evil: Operation Raccoon City, Street Fighter X Tekken and Ninja Gaiden 3 among them - being absent from its shelves.

Both Gamestop and Wal-Mart are rumoured to be showing interest in acquiring parts of The Game Group, but the only official lifeline so far is OpCapita, the parent company of household electronics retailer Comet.

On Friday The Guardian reported that a proposed deal with OpCapita appears to have been shunned by lenders, with discussions stalled.

OpCapita had offered to take on debt for The Game Group and settle the 40 million worth of outstanding accounts with suppliers. A spokesperson for the Royal Bank of Scotland, which is owed 45 million, said talks were still ongoing, but the matter is complicated by other banks - Barclays, HSBC and La Caixa understood to be owed around 30 million each.

7 Comments

How the heck do you let it get in to such a state! this is a mess many months in the making. What were the board expecting to happen?

Side note, love the way the taxpayer picks up a hit again - with 25% of the entire debt owed to RBS! :(

Posted:2 years ago

#1

gi biz
;,pgc.eu

341 51 0.1
[...]
Among all the most ridiculous things on the planet, the VAT is at the top ranks. It's unbelievable they made such a debt just by doing their business... and guess where that money will come from, in the end? And, for many Countries, guess where it will end up?

Posted:2 years ago

#2

Steven Pick
Lead Graphic Designer

70 14 0.2
When I visited last weekend, they were still offering 75% trade in value of used games. Pretty crazy.

Posted:2 years ago

#3

Stephen McCarthy
Studying Games Technology

205 0 0.0
mario games (well the good ones) do not go down in cost.

it one of the laws of the game shops.

Posted:2 years ago

#4

Dominic Jakube
Student

92 13 0.1
The company had 1,275 stores worldwide as of 1 November 2011 according to wikipedia so thats 141,176 quid per store with an generous average of 20 quid a game each store would have to sell 700 games in a week or so.Add to this any hardware or accessories they might have and it could be possible.
Of course this would leave them no cashflow or stock if they have repay debts to escape administation.

Posted:2 years ago

#5

Preet D Bass
student

92 13 0.1
Today its GAME, tommorrow its Activision day after its EA. Basically being greedy always bites you hard in the ass.

Posted:2 years ago

#6

Matthew Bennett
3D Engine developer

20 15 0.8
@Basson
Unfortunately that's not always the case. The Game Group's board are ignorant, idiotic and greedy, yes. But their attitude has only a small impact on their performance. This nightmare is of their own making, for months they simply refused to adapt to a changing time, market and preference. It's survival of the fittest and Game has refused to adapt to a changing environment, so now they will probably perish and larger companies will just absorb the corpse of GAME in order to grow themselves.
The fact that they bit the hand that fed them didn't help at all with their current situation, the sheer number of publishers that have dropped them on their asses since EA refused to allow them to stock their new releases is, from a business perspective, catastrophic.

Posted:2 years ago

#7

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