Video Games Retailer Game In Talks With Lenders After Steep Declines In Sales
Video games retailer Game warned today that it is set to breach a banking agreement after a dismal Christmas capped an "incredibly tough" year for the industry.
The group, which has 1,300 stores worldwide trading under the Game and Gamestation brands, said that, given difficult market conditions, it will not meet a banking covenant - a promise made to creditors to secure a loan - when it is tested at the end of February.
Game added that it is in "regular and constructive" talks with its lenders, who remain supportive.
The warning comes after the group recorded a 12.9% decline in like-for-like sales in the eight weeks to January 7 and a 10% drop in the 49 weeks to January 7, as a lack of new consoles and a squeeze in consumer spending hit the business and wider market.
Game chief executive Ian Shepherd said: "Our industry had an incredibly tough 2011, and so did we."