Gamestation Stores To Be ‘Sacrificed’ According To Rumoured GAME Group Plan
UPDATE: As suggested in Tuesday’s MCV report the GAME group has now been suspended from the London Stock Exchange, and has entered into administration. Game posted a statement on their corporate website reading:
Further to the announcements of 12 March 2012 and 14 March 2012, the board of GAME has assessed the status of the ongoing and regular discussions between GAME and its lending banks and between its lending banks and a potential third party provider of finance to the business.
The Board now considers itself to be unable to assess the business’s financial position, and is of the opinion that there is no equity value left in the Group. Therefore the Company has requested that the listing of its securities on the Main Market of London Stock Exchange plc be suspended from trading with effect from 7:30am today.
The Company will provide a further update in due course.
A report has suggested that the GAME group will enter administration this week with a view to restructure as a new company, without the Gamestation brand.
MCV’s account details that the troubled retailer is supposedly planning to voluntarily enter into administration procedures this week, resulting in the GAME group being removed from the London Stock Exchange. According to MCV following the administration process a new company would then be formed, funded by the firms current lenders. However, this new company would lack GAME’s many international locations and Gamestation stores.
GAME bought the Gamestation chain in 2007 for £74 million, gaining 217 retail stores. The report doesn’t suggest what would happen to current Gamestation stores, other than noting that a few of the well performing stores would no doubt survive the cut.
A source close to situation told MCV that the rumoured plan would be “great news” adding that there is “no need for two, or even three, stores in the same town or city” as is currently the case in some UK towns and cities.
The Game Group responded to MCV’s report, stating that it contested “many of the claims” made in the article, although no specific objections were made clear.
If this rumoured rescue plan has any truth to it, it would be safe to assume that last weeks talk of a deal with OpCapita is no longer a viable option for the uneasy retailer.