3,200 jobs safeguarded at administrators confirm deal for Game Group stores
NEARLY 3,200 jobs at struggling retailer Game Group have been safeguarded with the sale of part of the business to a turn-around investment firm.
OpCapita, which recently bought electrical goods retailer Comet, has bought 333 Game and Gamestation shops, the administrators of the failed group said.
The UK operations of Game Group collapsed into administration last Monday, triggering 277 store closures and 2,104 redundancies.
The Game stores in Shewell Walk, Colchester, and London Road North in Lowestoft, were among those closed, together with the Gamestation store in Station Road, Clacton.
However, the group retains other stores in all three towns, together with two branches in Ipswich and others in Bury St Edmunds, Braintree and Chelmsford.
Administrator PwC confirmed the sale the the remaining stores but would not reveal the financial details of the transaction. It is thought OpCapita paid a nominal amount, possibly �1, for the assets.
Henry Jackson, managing partner of OpCapita said: “We strongly believe there is a place on the high street for a video gaming specialist and Game is the leading brand in a �2.8 billion market in the UK.
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“We have assembled a strong team of experienced industry operators to implement the programme of operational change that is needed.
“There is a huge amount to do but we look forward to the challenge of restoring Game’s fortunes in partnership with its employees and suppliers.”
The real cost will be taking over the company’s �85 million debts. It is understood the company’s lenders, led by Royal Bank of Scotland, will have agreed to roll forward the debts at the same time as taking a slight reduction.
OpCapita was among a number of potential bidders for the remaining assets which also included a consortium of existing banks including RBS and American rival Gamestop.
OpCapita, which bought Comet for a token �2, specialises in investing in and turning around stricken retail chains.
Game’s demise followed a string of profit warnings and the failure of nervous suppliers, including Electronic Arts and Nintendo, to go on providing new games.
The retailer had a �21 million rent bill due last week and faced a �12 million wage bill at the weekend, although PwC is expected to honour any wages owed. There is also a �10million VAT bill and �40million owed to suppliers.
Game suffered a dismal Christmas and was later forced to ask suppliers for more generous trading terms. But many stopped supplying it with new releases, such as Mass Effect 3 and Street Fighter X Tekken, leaving fans disappointed and adding to the group’s trading woes.
Game agreed fresh lending facilities with banks last month and began seeking access to alternative sources of funding earlier this month.
The group has already signalled that losses for the year to the end of January are likely to be around �18 million.