Safe In The Short Term
Breaking news: MCV reports that GAME have negotiated a new deal with their lending syndicate that should secure their financial position in the short term. GAME have promised to "operate within lower limits of its existing facilities than was previously available," while coming up with a new long-term strategy that will include input from their lenders.
This newfound security should also allow them to meet this year's covenant tests without incident. GAME are expecting an £18m for the next year before tax, which is actually better than what many analysts were expecting. It will be interesting to see whether the new strategic plan includes new cuts to their overseas operations as rumoured earlier today.
The short version? GAME is here to stay - for now - and we hope that the chain will evolve to meet the changing demands of the games market. We're convinced that there's still a place for traditional retail, not to mention its thousands of employees. The situation mirrors that of HMV last month, and it seems that bankers are still willing to back the high street despite a seriously rough downturn in boxed game sales.
