UK specialist retailer The Game Group has today admitted it is heading for administration after failing to secure financing during weeks of uncertainty.
Earlier today it voluntarily suspended trading on the London Stock Exchange, and as it seeks out an administration partner hopes that it can continue to trade in the short term.
"Further to this morning's announcement of the suspension of trading in shares of GAME Group plc, the board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business," said the company.
Discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business.
The Game Group
"The board has therefore today filed a notice of intention to appoint an administrator. In the short term the Board's intention is that the business will continue to trade and discussions with lenders and third parties will continue under the protection of the interim moratorium."
Earlier in the day it admitted that the company no longer has value. It is saddled with over £180 million worth of debt with rent and wage payments due this month.
"The Board now considers itself to be unable to assess the business's financial position, and is of the opinion that there is no equity value left in the Group," said the company.
The company has over 600 stories in the UK alone, trading under the GAME and Gamestation brands, and it's now expected that at least half of those are to close. There has been talk of multiple rescue packages, with Hilco showing interest in the group's international stores in Spain and Australia, and Rothschild being appointed to seek a buyer for the whole company.
US retailer GameStop has also been seen as a likely candidate for the business as it lacks a High Street presence in the UK, although recent reports by the FT suggest it has not show any recent interest in the business.
Since Christmas suppliers have been unwilling to commit stock to the retail chain, with major publishers such as Electronic Arts pulling support forcing the retailer to cancel pre-orders and refund customers.
While the traditional publishing community has tried to help the struggling retailer, many in the digital space have been less sympathetic to the crisis, with some even suggesting the group has brought problems on itself by putting an emphasis on selling pre-owned stock and using its size to bully the market.
The fate of the business will now be put in the hands of an administrator, thought to be PriceWaterHouse Coopers, with The Game Group hoping for a pre-pack administration deal.