According to UK industry weekly
MCV, the UK’s specialist retail market has shrunk as GAME has forked out £74 million to purchase Blockbuster-owned GameStation – assets currently valued at £60m.
The acquisition follows five other global purchases by the company in the last three years: Addon and Maxi Livres in France, Games Wizards in Australia, Spiderman in Norway and gameplay.co.uk, an online-only e-tailer in the UK.
GAME states in its official press release to the Stock Market that:
"The combined group will continue to operate both the GAME and Gamestation formats, using its knowledge of the customer base currently served by each brand. There are expected to be good opportunities to improve the efficiency of the acquired operations through integration with the existing infrastructure and facilities of the GAME group. In particular, Gamestation's supply chain and certain business support functions will, over time, be fully integrated into GAME's existing operations.
"As a result, the Board anticipates realising pre-tax synergies of approximately £7 million per annum by the second full year following completion...
"In addition, there will also be incremental capital expenditure of approximately £4 million in respect of IT and logistics infrastructure development."
Now, for the uninitiated, "synergies" and "good opportunities to improve the efficiency" are aimed at the shareholders and tend to mean that people and buildings that duplicate current positions will be made more efficient by ceasing to occupy any actual space.
On the upside, this could provide the super-retailer with greater purchasing power and this should be passed on to the gamer.
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Source: MCV