Report: GAME Bosses Considering Whether to "Pull the Plug"
Creditors 'running out of patience'
The GAME Group's decision to not stock EA's Mass Effect 3 appears to have had a negative effect on the future of the UK games retailer. A report by the Express newspaper claims that the group's board of directors are considering whether to "pull the plug" on its operations.
A source "close to the situation" told the Express said that Game's directors "can’t be sure that the company can survive through the next trading season," with insolvency being the inevitable outcome from any further financial slumps. "[The directors] are in discussions with their legal advisers about whether to shut up shop rather than rack up more losses."
The whispers follows concerns that GAME's credit lenders, a group of companies led by the Royal Bank of Scotland, is "running out of patience" with the retailer. The lenders' "immediate response" of ordering store closures may not be enough - GAME already announced the closure of some 30 or so stores in the past week.
An outright closure of business may not be what creditors are looking for either, as GAME's overseas operations will reportedly complicate matters. "Suppliers pulling their products is a stepping stone to administration, but the problem for RBS pulling the plug is that it will be an expensive and complex administration because Game has 1,274 stores across Europe and Australia," said another source.
"Lending banks will only want to consider a pre-pack administration, where there is a pre-arranged buyer, but who would want to buy Game?" Who indeed. We could think of a few companies, but then we're not in the retailer business for a reason...
Source: Express
A source "close to the situation" told the Express said that Game's directors "can’t be sure that the company can survive through the next trading season," with insolvency being the inevitable outcome from any further financial slumps. "[The directors] are in discussions with their legal advisers about whether to shut up shop rather than rack up more losses."
The whispers follows concerns that GAME's credit lenders, a group of companies led by the Royal Bank of Scotland, is "running out of patience" with the retailer. The lenders' "immediate response" of ordering store closures may not be enough - GAME already announced the closure of some 30 or so stores in the past week.
An outright closure of business may not be what creditors are looking for either, as GAME's overseas operations will reportedly complicate matters. "Suppliers pulling their products is a stepping stone to administration, but the problem for RBS pulling the plug is that it will be an expensive and complex administration because Game has 1,274 stores across Europe and Australia," said another source.
"Lending banks will only want to consider a pre-pack administration, where there is a pre-arranged buyer, but who would want to buy Game?" Who indeed. We could think of a few companies, but then we're not in the retailer business for a reason...
Source: Express
Companies:
Game
Read More Like This