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A sign hangs outside a branch of Game Group Plc, on Oxford Street in London. (Bloomberg) |
LONDON (AFP) ― A deal was struck on Sunday to save British video games retailer GAME, which was taken into administration Monday, and preserve nearly 3,200 jobs.
OpCapita, which specializes in turning around ailing High Street stores, has bought 333 shops for an undisclosed fee, administrators PricewaterhouseCoopers said.
It is believed the turn-around investment firm paid a nominal fee of 1 pound ($1.6) for the assets, but the actual cost will be in taking over the company’s 85 million pounds debts.
PwC last week was appointed as joint administrators of the group’s U.K. and Ireland operations, which has 609 stores under the GAME and Gamestation brands and employs a total of 5,521 people.
“We strongly believe there is a place on the high street for a video gaming specialist and GAME is the leading brand in a 2.8 billion pounds market in the U.K.,” said Henry Jackson, managing partner of OpCapita.
“We have assembled a strong team of experienced industry operators to implement the program of operational change that is needed.
“There is a huge amount to do but we look forward to the challenge of restoring GAME’s fortunes in partnership with its employees and suppliers.”
It was reported on Sunday that the Royal Bank of Scotland, the company’s main creditor, has agreed to reduce and roll forward the debts.
GAME’s international divisions are operating as normal. The company also has stores in Australia, the Czech Republic, France, Portugal and Spain.
Administration refers to the process whereby a troubled company calls upon independent expert financial help in a bid to remain operational.
The retailer recently suffered a string of profit warnings and a dismal Christmas which led to nervous suppliers, including Electronic Arts and Nintendo, refusing to provide new games.
“The group has faced serious cashflow and profit issues over the recent past,” added Mike Jervis, joint administrator and partner at PwC.
“It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements.”
