British Retailer Game Threatens May Close Doors
British video games retailer Game has put itself up for sale and warned shareholders their equity in the firm could be worthless. The retailer has 1,270 stores in nine European markets and Australia and employs nearly 10,000, reports James Davey for Reuters.
Over the last two weeks loss-making Game has had to tell its customers that popular new releases such as Electronic Arts´ Mass Effect 3 and Capcom´s Asura´s Wrath and Street Fighter X Tekken, would not be available at their stores after failing to agree terms with the suppliers.
The firm said it remained in talks with suppliers and lenders in relation to terms of trade and Game is also seeking alternative sources of funding and reviewing the position of all of its assets in the UK and international territories.
Game faces intense competition from internet players and supermarkets, who often sell new blockbuster titles as loss leaders. The firm has been closing stores and moving into digital gaming, aiming to avoid the fate of other struggling specialist retailers, such as music and films group HMV.
Gamestop, a US retailer has long been seen as an obvious suitor, for a rescue deal. However, analysts doubted if any serious bidders would emerge ahead of any bankruptcy
“We suspect that any potential suitor would prefer to wait for a formal administration process. Through a pre-pack the suitor would have much greater flexibility around store liabilities,” said Singer Capital Markets analyst Mark Photiades.
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