10,00 jobs at stake as Game seeks to raise �180m in a week
STRUGGLING retailer Game Group has a week to raise �180 million or face collapsing into administration, putting 10,000 jobs at risk.
The group, which has 1,300 stores worldwide trading under the Game and Gamestation brands, warned last week that it was in danger of collapse after several suppliers refused to provide it with new products.
The company needs �180 million to pay creditors, suppliers and banks, according to the Sunday Times said, and is currently in talks with potential backers about putting up the support needed.
The group earlier this week said a third party - reportedly private investment firm OpCapita, which recently bought electrical goods retailer Comet - has shown interest in providing the money needed but warned there was no certainty over the outcome.
Game faces a �21 million rent payment next Sunday and a �12 million wage bill at the end of the month, it was reported, and owes more than �10 million in VAT and �40 million to suppliers. A new investor would have to pay up to �100 million to Game’s banks.
Game, whose UK store locations include Ipswich, Bury St Edmunds, Colchester, Clacton, Braintree and Chelmsford, said it was seeking access to alternative sources of funding earlier this week and has asked suppliers for more generous trading terms, but so far it has not been possible to source new products from a number of suppliers.
The company’s woes have been made worse after it failed to stock new eagerly awaited titles such as Mass Effect 3 and Street Fighter X Tekken.
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The group agreed fresh lending facilities with banks last month but the loan was not enough to reassure suppliers, who have balked at being asked to give the group better terms to help it stay afloat.
The company also suffered a woeful Christmas, with like-for-like sales down 12.9% in the eight weeks to January 7, blamed on a lack of new consoles and a squeeze on consumer spending.
It has already signalled that losses for the year to the end of January are likely to be around �18 million.