Struggling Game Group, the owners of GAME and Gamestation, have appointed PricewaterhouseCoopers (PwC) as administrators to act on the group’s behalf.
The group’s troubles started a few weeks ago, when they had problems getting supplies to the company’s commercial properties. Some suppliers, including Nintendo, had refused to do business with the company, which left them unable to fulfil orders of certain products. A statement from the company spoke of the issue: “We currently have a supply issue with regards to Mass Effect 3, which means that GAME and Gamestation will not be able to fulfil orders for Mass Effect 3 at this time.”
However, things have only gone from bad to worse for Game Group, as the retailer has racked up a rent bill of £21 million, £40 million owed to suppliers, £10 million in Value Added Tax (VAT) and £12 million owed in outstanding wages. But the administrators have determined that they will honour outstanding wages owed to employees.
The company currently has stores in 609 commercial properties and employs over 5000 people in the UK alone. In addition, the group has 691 commercial properties outside of the UK, including: Australia, Czech Republic, France, Portugal, Scandinavia and Spain, which employ over 5000 staff as well. So it is not just the British high street that will suffer from the loss of this well know brand.
On Monday, the company issued a statement sealing their fate: “The Board of GAME has today appointed PWC to act as administrators for the Group.
“This decision was taken after careful consideration and ceaseless interrogation of every possible alternative.”
Speaking of the administration, Mike Jervis, a partner at PwC, stated: “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.”
However, the administrators are optimistic that a buyer will be found which will hopefully safeguard the majority of jobs: “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.”
However, if a buyer for the group is not found, it will be a huge blow to the UK’s unemployment statistics, which are already at the highest levels seen in many years.
