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Retail

GAME administrator "hopeful" of sale as a going concern

GAME administrator "hopeful" of sale as a going concern

Mon 26 Mar 2012 6:57am GMT / 2:57am EDT / 11:57pm PDT
Retail

Update: PwC believes there's room for a specialist game retailer in Europe

Update 2: GAME administrator PwC has said it is hopeful that the retail business can be sold as a going concern, and it believes there is room for a specialist games retailer on the UK High Street

"The group has faced serious cashflow and profit issues over the recent past. It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements," said Mike Jervis, joint administrator at PriceWaterhouseCoopers.

"Despite these challenges, we believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK. As a result we are hopeful that a going concern sale of the business is achievable."

The company officially went into administration today after failing to find a buyer despite numerous reports of interest.

As of January 31 this year, the business had a turnover of 1,625 million with 609 stores in the UK and Ireland employing 5,136 staff. A further 385 are employed at head office in Basingstoke.

Update 1: The Game Group has confirmed today that PwC is acting as administrator for the business.

"This decision is taken after careful consideration and ceaseless interrogation of every possible alternative," said the company.

"The Board would like to thank the teams of GAME and Gamestation colleagues around the world for their exemplary dedication, passion and professionalism."

Original story: The Royal Bank of Scotland is leading a group of lenders hoping to buy out The GAME Group after is goes into administration.

According to a report by This Is Money, the group intends to buy a slimmed-down business with administrators PwC likely to announce the closing down of a number of stores in the UK today.

The business has around 600 GAME and Gamestation shops, employing up to 6000 people.

The Game Group was delisted from the London Stock Exchange last week after the board admitted it no longer had any value.

Bids for the company are also expected from OpCapita and American rival GameStop.

Last week EA's UK boss Keith Ramsdale said that he expects the Game business to return to the High Street in some form, hoping it will take a more multiformat approach.

10 Comments

I am not sure a taxpayer led buyout of GAME is a sound idea. mayhaps it is like throwing in good money in with the bad. In addition, does RBS have the right expert help when deciding this matter

Posted:2 years ago

#1

Preet Basson Studying Mathematics with Statistics, University of Portsmouth

92 13 0.1
If this is true, to stock traders. Its time to buy.

Posted:2 years ago

#2

Preet Basson Studying Mathematics with Statistics, University of Portsmouth

92 13 0.1

Posted:2 years ago

#3

Fran Mulhern , Recruit3D

863 707 0.8
Buying a slimmed down Game is a very smart idea, if the price is right. I just hope publishers continue to refuse to allow it to sell stock while it continues to push preowned so aggressively, but I have a feeling the buyers will arrange that separately with publishers before they buy. Presumably they'll look to buy the assets rather than the company itself, then be able to negotiate new leases etc on cheaper rates.

Posted:2 years ago

#4

John Donnelly Quality Assurance

313 38 0.1
Dr Chee: RBS are Game's primary bank and are owed a chunk of the money that lead to this.
I say its likely they want to try and recover the debt and this might be a way to do it.

Preetpal: The stocks have been delisted so there is no legal way to trade them right now.

Posted:2 years ago

#5
@ John - thanks. I was thinking perhaps more along the line that RBS may be owed loads by GAME, however I doubt if they know too much of the gaming worlds ups and downs and as such a buyout does not necessarily translate to a NEO-game of any real worth. Far better to be bought out at a cut cost price by a rival competitor who will be better able to restructure it in a meaningful successful way. Lastly, dont you think its strange that as a bank, owned by the tax payer, the tax payer is not consulted on any of its good ,bad or mediocre deals. Its just in name really.

Posted:2 years ago

#6

John Donnelly Quality Assurance

313 38 0.1
I dont think its weird.

The government has tasked the directors and top staff with the goal to restructure RBS and they are doing a good job of meeting those goals on time.
There are very smart people within the RBS who have alot of experience with money and may see a way to recover their debit while working with a partner.

It could be a good combination but I still think a company like walmart might make a better go of it.

Posted:2 years ago

#7

Fran Mulhern , Recruit3D

863 707 0.8
Chee, the RBS won't run Game. They'll provide some of the financing and get people in to run it - but they won't run it themselves. I'd assume a new company will be set up, with RBS as one of the shareholders. They'll loan the company money and have a say in the directors, but that'll be it.

And the RBS can't go running to the taxpayer every time it wants to do something. We say it's owned by the taxpayer, but it's not, it's owned by an investment vehicle set up by the government. And either way, they're not going to ask for shareholder approval every time they want to do something - that's why companies have a distinction between directors and shareholders.

Edited 1 times. Last edit by Fran Mulhern on 26th March 2012 1:52pm

Posted:2 years ago

#8
@ Fran - thats probably a good outcome scenario. thank you for painting the final analysis in better light.

On a slightly positive note, lil indie game shops may be opening up all over

Posted:2 years ago

#9

Bruce Everiss Marketing Consultant

1,692 594 0.4
It is about instigating business mechanics to monetize footfall. It is difficult to compete with low overhead online retailers and supermarkets for boxed game sales. So where to next?
Secondhand hasn't worked and annoys the publishers. The whole product business is moving to digital distribution. The entire high street is dying.
It is very useful to the platform holders as a home for demo pods, but are they willing to pay for this?
Also they could generate their own products, especially merchandise, which is a high margin area they have previously not done well at.
But it will take someone with lots of imagination to implement a viable business model.

Posted:2 years ago

#10

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