Thursday, October 6, 2022

Game may follow Sony in closing Lakeside store

GAME Group, the computer game retailer that is unable to sell keenly awaited new games including Mass Effect 3, Mario Party 9 and Street Fighter X Tekken, has officially warned investors that it is on the brink of collapse.

The company, which has a store in Lakeside, may follow fellow electronic goods store, Sony Centre, which closed suddenly earlier this month.

The Sony Centre store was run by Bascam Limited, that have been placed into adminstration.

Game told a paper that it had put itself up for sale but warned that “it is uncertain whether any of the solutions currently being explored by the board will be successful or will result in any value being attributed to the shares of the company.”

Game desperately needs cash before the end of the month to pay its quarterly rent bill. If it fails to pay up it could be pushed into administration, putting 10,000 jobs at risk and wiping out any shareholder value.

Ian Shepherd, the chief executive, has told senior staff to brace themselves for administration, according to trade magazine MCV.

The company has appointed investment bank Rothschild to find a buyer, but it is likely to be difficult to find one before the looming deadline. Game’s Spanish arm could attract the attention of US rival Gamestop, but its British, French and Australian divisions may be sold through a controversial pre-pack administration. Deloitte has already been in discussions with the firm about how to handle an insolvency. Game has 1,270 stores in nine European markets and Australia.

The shares, which have already lost more than 95% of their value over the past year, crashed a further 50% this morning to 1.75p, valuing the company at just £6m.

Electronic Arts, the publisher of Mass Effect 3, and Capcom, the Californian company behind Street Fighter X Tekken and the Resident Evil games, have refused to supply Game stores with their forthcoming games overs fear they won’t be able to reclaim the stock if the company goes bust. Nintendo has also refused to allow Game to sell its latest hit Mario Party 9. The company conceded that it is in “ongoing discussions” with other suppliers also threatening to pull out.

“The board of Game is working actively to resolve these issues as quickly as possible,” the company added.

“This includes ongoing discussions with suppliers, seeking access to the original facility or alternative sources of funding, and reviewing the position of all of its assets in the UK and international territories.”

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