UK retailer Game runs out of game, but future of Australian chain unknown
Thursday, March 22, 2012/
British video game retailer Game has been placed in administration and delisted from the London Stock Exchange after running out of cash, but it’s unclear how the development will affect the company’s Australian stores.
The company operates over 1,300 stores worldwide, with most located in Europe and 94 in Australia. The administration comes after the company complained of financial woes, owing £180 million to creditors and suppliers.
The company said last week there was hope a third party would provide the cash, but the administration appears to confirm that deal fell through. In a statement released overnight, the board said they felt there was “no equity value left in the group”.
SmartCompany contacted the local division of Game this morning, but a reply was not available prior to publication. However, the company’s stores continue to trade.
The business employs 6,000 people in Britain.
In a statement overnight, the company said that following announcements made earlier this month, the board had decided to place the company in voluntary administration.
“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.
“Therefore the Company has requested that the listing of its securities on the Main Market of London Stock Exchange be suspended from trading with effect from 7.30am today.”
The board said an update would be issued soon.
According to the company’s latest interim report, for the six months ending July 2011, the Australian division recorded turnover of £26.2 million, or $AU33 million.
The UK business has been under pressure for some time. Sales have declined as more customers turn online and to digital distribution, while debts have kept mounting. The company also complained of poor sales at Christmas, with international division sales falling 11.4% on a like-for-like basis during the eight weeks to January 7.
This led to suppliers refusing to provide copies of new-release games, exacerbating financial woes.