Update: 2,100 jobs axed as Game falls into administration
ALMOST half the stores run by collapsed retailer Game are to be closed this week, administrators said today, triggering 2,104 job losses.
Administrators at PwC said 277 stores in the UK and Ireland are to shut but the remaining 333 stores, which employ 2,814 staff, will continue to trade while they try to find a buyer for the remainder of the business.
The UK operations of the retailer, which trades as Game and Gamestation, collapsed into administration after it suffered dire trading in recent months, while some suppliers refused to stock the business.
Mike Jervis, joint administrator and partner at PwC, said: “The recent job losses are regrettable but will place the company in a stronger position while we explore opportunities to conclude a sale. My team and I will be doing all we can to help the affected employees at this difficult time.”
Game, which employs a further 385 staff at its headquarters in Basingstoke, Hampshire, includes stores in Ipswich, Bury St Edmunds, Lowestoft, Colchester, Clacton, Braintree and Chelmsford.
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The Game stores in Shewell Walk, Colchester, and London Road North in Lowestoft, are among those which will close this week, together with the Gamestation store in Station Road, Clacton. No details on the number of jobs affected were available.
A consortium of existing banks led by state-backed Royal Bank of Scotland is understood to be among three potential bidders for the remaining stores, along with American rival Gamestop and OpCapita, which recently acquired consumer electronics business Comet.
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Mr Jervis, joint administrator and partner at PwC, said: “The group has faced serious cashflow and profit issues over the recent past.
“It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements.
“Despite these challenges, we believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one – the UK. As a result we are hopeful that a going-concern sale of the business is achievable.”
Game said last week that it planned to appoint an administrator, after admitted there was no value left in the company.
The chain’s demise follows 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 �21million rent bill due yesterday and faces a �12m wage bill this weekend, although PwC is expected to honour any wages owed. There is also a �10m VAT bill and �40m owed to suppliers.
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 �18m.