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GAME Group shares suspended from trading

GAME Group shares suspended from trading

GAME Group's Gamestation brand may be sacrificed to save the company, should investment not be forthcoming.

Beleaguered high-street retailer GAME has had its shares suspended from trading as it enters the final few days of a bid to save the company from going bankrupt.

GAME Group, which owns the GAME and Gamestation high-street brands, has been under increasing financial pressure of late. Poor Christmas sales led to an inability to pay debts, directly causing a loss of confidence which has led to major publishers refusing to provide stock on new-release titles.

The result: a spiralling problem where GAME Group misses out on sales because it has no stock of new-release games like Mass Effect 3, leading to further poor financial performance, leading to more publishers refusing to provide stock. It's an issue which has led to strongly denied rumours of wage payment delays and, most recently, the appointment of Rothschild to find a buyer.

Time is running out, however. The company is believed to have just days left to find the cash it needs to pay rent on its high-street properties as well as to meet repayment terms mandated by its creditors. Should it fail to find a buyer willing to stump up the cash in the next few days, GAME Group will be forced into insolvency - a move which would have a serious impact on the UK gaming market.

The news that GAME Group's shares have been suspending from trading, following a precipitous drop which saw the company's value almost wiped out as investors bailed in ever-increasing numbers, isn't good - despite the move coming from the GAME Group's board itself, following discussions with lenders. '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,' a GAME Group spokesperson explained in a statement to press.

'Therefore the company has requested that the listing of its securities on the Main Market of London Stock Exchange plc be suspended from trading with effect from 7:30am today.'

The suspension comes as GAME Group enters talks with what it describes as 'a potential third party provider of finance.' While it is naming no names, private investment partnership and Comet owner OpCapita has been suggested as a potential suitor.

Industry publication MCV, meanwhile, claims that GAME Group is looking to enter voluntary administration in the hopes of rising again as a 'phoenix company' under a new name and with fewer stores. Though strongly denied by GAME Group management, MCV's sources suggest that the renewed company would operate GAME-branded stores while closing Gamestation outlets in order to reduce operating costs.

That may not be a bad move: following GAME Group's acquisition of Gamestation from previous owner Blockbuster back in 2007 for £74 million, GAME Group has continued to operate the two brands side-by-side. As a result, many towns and cities across the UK have at least two GAME Group-owned stores - in some cases three or four. The additional overheads of running multiple stores a few doors down from each other are, it has been suggested, one of the reasons GAME Group has landed in the financial mire now.

Closing the Gamestation brand down, however, would have a very real human cost in the form of lost jobs. Should it save the entire GAME Group from closure, it may be a price the company is more than willing to pay.

UPDATE: GAME Group has formally announced its intention to appoint administrators, suggesting that MCV's claim of a phoenix rebirth plan is not a million miles away from the truth. Sadly, this scuttles any hope of external investment saving the company as it exists today.

'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,' the company explains in an updated statement. '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.'

19 Comments

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Farting Bob 21st March 2012, 11:11 Quote
As bit-tech has said in other articles, it will negatively impact the gaming market to lose what is easily the biggest gaming retailer. Most supermarkets and other stores that do sell games usually only carry the top selling ones, and only ever in 360,PS3 and wii (no love for PC). I went down to my GAME store last week and the mood in there was horrible. Everyone in a daze, waiting for the inevitable "your out of a job, and we cant afford to pay your wages this month" letter from HQ.

Having worked in a GAMe a few years back, i can see where they were going wrong in places, but at the end of the day, the fact that you could always get it cheaper online (amazon, play, xbox live, steam etc) meant tech savvy people had no need to buy stuff from GAME. The store i worked in ran a loss in 9 months, broke even for October and made a profit in November and december. A business with many expensive retail outlets cant survive on 2 profitable months a year.
Gareth Halfacree 21st March 2012, 11:14 Quote
Quote:
Originally Posted by Farting Bob
The store i worked in ran a loss in 9 months, broke even for October and made a profit in November and december. A business with many expensive retail outlets cant survive on 2 profitable months a year.
It can try, so long as it actually has those two profitable months. Sadly, last Christmas was slow - proving that GAME was literally one missed sales period from bankruptcy.

I still think it's due to the crazy decision to keep Gamestation open (or, arguably, acquire it in the first place.) Here in Bradford there are two GAMEs and a Gamestation, for a total of three GAME Group-owned stores serving a population of just 293,717. The biggest GAME store and the Gamestation store are even on the same street, a few hundred yards apart. The second, smaller GAME store is about two minutes walk away, next to an HMV.
Musicboffin 21st March 2012, 11:21 Quote
For once, I decided to buy BF3 brand new game from Game for the Physical Warfare pack. Not only did I have to go down to the store in person to pre-order it, I had to pay £5 deposit (which is fair enough) but they wouldn't tell me how much the game was going to cost on day of collection, you have to wait until day of release. The staff tell you you can always cancel your pre-order if you don't like the price, but if you have to wait until day of release, it's too late to get it elsewhere. Needless to say, it cost £10 more than anywhere else. I could have bought it on Origin and downloaded it for the same price without the ballache.

On the day of collection, they didn't have enough copies to meet all the pre-orders. I got the last copy of the limited edition in the store (the only version worth pre-ordering) at 12pm, so that the person behind me in the queue was screwed, even though they had paid their £5 to pre-order it. No wonder other games such as Mass Effect 3 weren't stocked (ignoring the finance issues) when they balls up the preorders so badly. Good riddance to shitty companies.
badders 21st March 2012, 11:32 Quote
Quote:
Originally Posted by Gareth Halfacree

I still think it's due to the crazy decision to keep Gamestation open (or, arguably, acquire it in the first place.) Here in Bradford there are two GAMEs and a Gamestation, for a total of three GAME Group-owned stores serving a population of just 293,717. The biggest GAME store and the Gamestation store are even on the same street, a few hundred yards apart. The second, smaller GAME store is about two minutes walk away, next to an HMV.

Exactly the same as in Basildon - they already had two GAME stores within 5 minutes walk of eachother, and once they acquired Gamestation, they kept that open too.

Because GAME and gamestation operated slightly differently, they could have kept one of each open, but instead chose to keep all three there? It may have been due to shop leases etc, but I'm sure that the period of time they kept all three open was longer than I'd expect leases to run?
Dave Lister 21st March 2012, 11:34 Quote
If I'd known Game group were involved with the rothschilds I'd have boycotted them years ago. And lets not forget all the small independent gaming shops that have been forced out of business because of game group !
proxymoron 21st March 2012, 11:37 Quote
Quote:
Originally Posted by Gareth Halfacree
It can try, so long as it actually has those two profitable months. Sadly, last Christmas was slow - proving that GAME was literally one missed sales period from bankruptcy.

I still think it's due to the crazy decision to keep Gamestation open (or, arguably, acquire it in the first place.) Here in Bradford there are two GAMEs and a Gamestation, for a total of three GAME Group-owned stores serving a population of just 293,717. The biggest GAME store and the Gamestation store are even on the same street, a few hundred yards apart. The second, smaller GAME store is about two minutes walk away, next to an HMV.

And there's little else in Bradford city centre, Gareth. I'd be amazed if any of the three survived a cull. The largest one used to have two floors, packed to the rafters with every format imaginable. They've closed off the top floor, and squeezed in the little stock they do have into one truncated room, usually only staffed by one - which is smaller than even the Halifax store.
Dave Lister 21st March 2012, 11:40 Quote
Just found out Game Group is now officially in administration.
whisperwolf 21st March 2012, 11:44 Quote
Quote:
Originally Posted by badders
Exactly the same as in Basildon - they already had two GAME stores within 5 minutes walk of eachother, and once they acquired Gamestation, they kept that open too.

Because GAME and gamestation operated slightly differently, they could have kept one of each open, but instead chose to keep all three there? It may have been due to shop leases etc, but I'm sure that the period of time they kept all three open was longer than I'd expect leases to run?

Trouble is that was only true for when they initialy got take over and about one year after that, in Edinburgh there's a Gamestation and game a couple hundred yards away, and the only difference now seems to be the colour of the carpet and price stickers. at least when game merged with EB they killed of some of the stores. In fact in Edinburgh they now have 6 stores in a about 5 mile radius. its a little much for a store that was apparently struggling so much.
Gareth Halfacree 21st March 2012, 11:49 Quote
Story updated: GAME has announced it is to appoint administrators. If I had a bugle, I'd play Taps.
October 21st March 2012, 12:09 Quote
In Belfast we had two Games and two Gamestations up until a few months ago. You could visit all four in no more than ten minutes of walking, the two Gamestations were literally at either end of one shopping centre. One of those closed a while back but that still leaves three...madness.
greigaitken 21st March 2012, 13:35 Quote
i viewed GAME as 'old retail' where you always pay full rrp - like dixons
gamestation had £5 off rrp so at least it was trying(i know same owner)
While GAME was much older etc, in my eyes, the gamestation brand holds a value but GAME is worthless.
NethLyn 21st March 2012, 14:09 Quote
Quote:
Originally Posted by Dave Lister
If I'd known Game group were involved with the rothschilds I'd have boycotted them years ago. And lets not forget all the small independent gaming shops that have been forced out of business because of game group !

It's certainly a cycle. We'll just have to see what happens now over the next month, who comes in, who buys what, whether HMV changes its mind and comes back to games but only online, etc. I'll have to look up the Rothschilds to see what that was all about.

At least it's happened and out in the open now, the fact that staff were learning more about what was going on from MCV/Gamesindustry.biz/news websites in general is disgusting treatment.
Lethal 21st March 2012, 15:57 Quote
I'm so glad I didn't buy those Game shares 4-5 years ago.
Paulg1971 21st March 2012, 16:53 Quote
In stockport, game and gamestation are next door to each other,now there's a good idea.
Woodspoon 21st March 2012, 16:57 Quote
I feel really sorry for the staff that are probably going to lose their jobs, but the GAME group have had this coming for a long time, the whole group seems to have been run like it was somebody's hobby, with some seriously bad decisions made along the way.
AcidJiles 21st March 2012, 18:02 Quote
So when do you think the larger discounts in store and stock sell off will happen?
Nanu 21st March 2012, 20:43 Quote
Quote:
Originally Posted by Musicboffin
For once, I decided to buy BF3 brand new game from Game for the Physical Warfare pack. Not only did I have to go down to the store in person to pre-order it, I had to pay £5 deposit (which is fair enough) but they wouldn't tell me how much the game was going to cost on day of collection, you have to wait until day of release. The staff tell you you can always cancel your pre-order if you don't like the price, but if you have to wait until day of release, it's too late to get it elsewhere. Needless to say, it cost £10 more than anywhere else. I could have bought it on Origin and downloaded it for the same price without the ballache.

On the day of collection, they didn't have enough copies to meet all the pre-orders. I got the last copy of the limited edition in the store (the only version worth pre-ordering) at 12pm, so that the person behind me in the queue was screwed, even though they had paid their £5 to pre-order it. No wonder other games such as Mass Effect 3 weren't stocked (ignoring the finance issues) when they balls up the preorders so badly. Good riddance to shitty companies.

This is the tip of a large ice-berg, I don't understand wtf bit-tech is doing screaming 'Game going out of business is bad for the games industry'

GAME was bad for the way the handled there business, and business is business, it will always evolve and develop.

In this case, the delivery platform may change, but the markets and products continue to EXPAND,not decline, as a result.

http://4.bp.blogspot.com/_I2uQkGxIykM/S5SK1p0LgJI/AAAAAAAAJb8/Jk2nNnzJl-s/s400/mega+fp+9gag.jpg
SexyHyde 22nd March 2012, 00:13 Quote
Quote:
Originally Posted by Nanu
I don't understand wtf bit-tech is doing screaming 'Game going out of business is bad for the games industry'

+1
Gradius 22nd March 2012, 01:30 Quote
G-GOD LIKE!
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