Video Games Retailer Game In Administration

Huffington Post UK/PA  |  By Posted: 26/03/2012 11:41 Updated: 26/03/2012 13:31

Game
Video Games Retailer Game In Administration

Thousands of jobs at video games retailer Game could be saved if a last-ditch rescue attempt goes ahead.

Game, which operates 600 stores in the UK and 1,300 worldwide, announced it had entered administration on Monday, after failing to raise the necessary £180 million in the past week to keep the company afloat.

But 6,000 UK jobs could be saved if a rescue from RBS, one of six lenders to the company, comes to fruition.

The Telegraph writes that RBS could only make its move now that Game is in administration. Any deal could involve the sale of some of its estate.

Mike Jervis, joint administrator and partner at PwC believes Game, which employs 385 staff at its headquarters in Basingstoke and around 5,100 in its stores. can be sold, saying: "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."

The retailer has a £21m rent bill due, a £10m VAT demand, £40m owed to suppliers and a £12m wage bill due this weekend. PwC is expected to honour any wages owed.

The group already signalled that losses for the year to the end of January are likely to be around £18m.

It is believed that a rescue deal from private equity firm OpCapita, which recently bought electrical goods retailer Comet, was offered but not supported by RBS.

Trading of Game's shares on the London Stock Exchange were suspended on Wednesday after it admitted the business had no value.

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