Game is to close nearly half of it 609 UK stores today, leaving 2,104 people without a job in the biggest collapse since Woolworths four years ago.
Mike Jervis and Stuart Maddison from PricewaterhouseCoopers were appointed joint administrators of the gaming retailer, after failing to reach a rescue deal or negotiate a ‘pre-pack’ over the weekend.
The move follows Game’s announcement on 21 March that the trading in its securities on the London Stock Exchange had been suspended and that a notice of intention to appoint an administrator had been filed.
The Basingstoke-based group will now focus its efforts on saving its remaining 333 UK stores for a possible deal over the coming weeks.
Jervis 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."
But he was hopeful that a going-concern sale of the business was achievable. “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," Jervis added.
Game owes money to a group of banks led by the Royal Bank of Scotland that also includes Barclays, HSBC and La Caixa. A lender-led rescue plan is on the cards in addition to a sale of the business.
The chain suffered from poor trading over Christmas and after its worried lenders reduced its borrowing facilities, it was forced to ask suppliers for more generous trading terms.
But major industry players refused to support it and it was unable to stock all of the latest gaming titles as a result. The retailer also suffered from competition from online-only retailers.
