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Report: GAME Bosses Tempted To "Pull The Plug"

Author:
Jonathan Lester
Category:
News
Tags:
GAME, RBS, Report, UK retail

Report: GAME Bosses Tempted To "Pull The Plug"

RBS To Push For More Store Closures

Beleagured high street retailer GAME has taken another knock today thanks to a damning insider report that claims directors may be considering 'pulling the plug' on the operation rather than incurring more losses. After some sensational stock shortages (culminating with Mass Effect 3), GAME are apparently in crisis talks with lenders such as the Royal Bank Of Scotland - who will probably advise the company to facilitate "more store closures" in the near future. It's a worrying story, and we've got the full quotes below.

The Daily Express reports that GAME upper management may opt to "shut up shop rather than rack up more losses" in the face of gloomy projections for the next trading season, citing a number of anonymous insider sources.

There is a real risk that GAME’s directors will pull the plug because they can’t be sure that the company can survive through the next trading season, and then insolvency becomes inevitable.

They are in discussions with their legal advisers about whether to shut up shop rather than rack up more losses.

Another source claims that chief lender RBS will urge GAME to close more stores in order to cut overheads, and sadly, this will probably be inescapable regardless of the ultimate outcome. What's more, if GAME does go into administration, the resulting fallout is likely to be incredibly messy and difficult for other buyers to pick up the pieces.

The immediate response from RBS will be to push for more store closures, but the tipping point for the directors and the lending banks will come when the stores don’t have products to sell.

RBS will be looking for the best way to secure its position or improve it. Suppliers pulling their products is a stepping stone to administration, but the problem for RBS pulling the plug is that it will be an expensive and complex administration because Game has 1274 stores across Europe and Australia.

Lending banks will only want to consider a pre-pack administration, where there is a pre-arranged buyer, but who would want to buy GAME?

Who indeed? Gamestop is rumoured to be interested, but with such a diverse portfolio of stores, a deal would be incredibly tricky to hammer out.

Again, it's worth noting that this is another unconfirmed report - and GAME's financial situation may not be as bad as the doomsayers claim. But there's no smoke without fire, and every chance that we'll at least be in for more redundancies in the near future. We'll continue to report as the situation develops.

Add a comment9 comments
DivideByZero  Mar. 5, 2012 at 12:50

The more I think about this, the more stupid I find it.

In Staines, Game ALWAYS has a big queue and is always rammed. They have a reasonable online presence - how they hell are they going so wrong?

phil16  Mar. 5, 2012 at 12:59

Not surprised. Get out while you still can employees!

muggsmulligan  Mar. 5, 2012 at 13:06

There's never big queues in either of the Hull stores, and they are going wrong cos it's too damn expensive in there! Used to shop there regularly but hardly do anymore, can usually always find the same thing cheaper elsewhere.

thefishfingers  Mar. 5, 2012 at 13:35

In Milton Keynes they have 2 GAME stores and 1 Gamestation, all within a 5 minute walk of each other.....

I think that sums up just how disconnected their business model is in this economic climate.

It isn't like they have that much competition either as the only other options are HMV (even more expensive) and a CEX. The 3 stores are competing against each other, with 3 separate rents.

Merge them into a larger store with a big stock room and you'll not lose any customers as they don't have that many options in the shopping center, would closing one Game store cause their customers to not use the other one? Or an even larger store where they can try and create a "dealspub" social element to the experience which I would personally really like. Gaming isn't the "social" taboo it once was. A nice FIFA 12 or Battlefield 3 in store tournament to get people through the door would surely be worth a try?

DivideByZero  Mar. 5, 2012 at 13:36

I know what you mean about price... but the Staines one is always busy, so i guess not everyone does?! Maybe Hull has mad internet skills?

RiKx  Mar. 5, 2012 at 14:19

In Milton Keynes they have 2 GAME stores and 1 Gamestation, all within a 5 minute walk of each other.....

I think that sums up just how disconnected their business model is in this economic climate.


I think this is definitely a factor, its the case in a number of other towns that I know of including yeovil, salisbury, southampton, cardiff (which had 4 stores at one point, they actually CLOSED a larger store in favour of a couple of smaller stores?!?)

RBS certainly the people you want helping in a financial crisis eh! :/

Tsung  Mar. 5, 2012 at 14:58

Add Norwich to the list of silly store numbers.
At one point they had 4 games stores (including 1 in a department store) and 1 gamestation all within minutes of each other.

Now I think they have 3 game stores and 1 Gamestation unless they have had the sense to close a couple of the game stores since I last visited.

I never understood why they needed such presence on the high street, thou' one game & game station store always had bad queues. (Gamestation is normally caused by people taking in mass items to trade in).

jonathan213  Mar. 5, 2012 at 17:07

in a small town of roughly 60,000 people where i live they have 2 game stores and 1 gamestation which seems crazy.

agstilo  Mar. 5, 2012 at 21:40

in a small town of roughly 60,000 people where i live they have 2 game stores and 1 gamestation which seems crazy.


Dundee used to have a Game in Debenhams, one in Borders, and a Game/Gamestation across from each other in the city centre. Only Game and Gamestation left now, and if they go, HMV will be the only place to buy new games in the city centre, apart from the chart stuff in a Tesco Metro (and I just remembered about Argos).

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