British video games retailer Game looked set to become the latest household name to fall by the wayside in the consumer downturn, filing a notice to appoint administrators, hours after it declared its shares worthless and suspended their trading.
The legal move, which provides companies a 10-day breathing space to discuss any survival plans with their nominated administrator, puts a major question mark over the future of the 10,000 staff Game employs in about 1,270 stores in nine European markets and Australia.
In its main UK market Game has about 600 stores, employing 6,000.
"Discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution," Game said.
"The board has therefore today filed a notice of intention to appoint an administrator."
It said the business will continue to trade and talks with lenders and third parties will continue under the legal protection the 'notice of intention to appoint' process provides.
Earlier, loss-making Game had said its board was no longer able to assess the company's financial position. It said the board believed "there is no equity value left in the group".
Game had been due to make a second-quarter rent payment this weekend.
Last week sources close to the situation said private investment firm OpCapita had expressed an interest in buying Game's debt, estimated by analysts at about £100 million and paying overdue and due payments to its suppliers, estimated at £40 million.
A source familiar with the situation today said Game's lenders, led by state-backed Royal Bank of Scotland and including Barclays and HSBC, had rejected an offer from OpCapita even though it had the support of suppliers.
The source said OpCapita, which earlier this year purchased British electricals chain Comet from Kesa, was unlikely to buy Game assets out of administration.
Analysts, who also believe U.S. rival Gamestop could be interested, reckon large-scale store closures are inevitable.
Game, facing intense competition from internet players and supermarkets, who often sell new blockbuster titles as loss leaders, had already 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.
But Game's demise was sealed when suppliers, such as Electronic Arts' and Capcom, worried about being paid, decided not to provide the firm with key new releases.
Reuters
