Fears for future of Game shops in Norwich, King’s Lynn, Great Yarmouth and Lowestoft
PUBLISHED: 11:36 21 March 2012
Fears for the future of retailer Game intensified today after its shares were suspended and it admitted the business has no value.
The company, which operates 1,300 stores worldwide, including shops in Norwich, King’s Lynn, Great Yarmouth, Lowestoft and Bury St Edmunds was reported to be trying to raise £180m this week or face administration after several suppliers refused to provide it with new products.
It today said discussions were ongoing with a potential third party funder but it was unable to assess its financial position and was “of the opinion that there is no equity value left in the group”.
Its shares were suspended on the London Stock Exchange “pending clarification of the company’s financial position”.
Some 600 of Game’s stores are in the UK, employing 6,000 staff. All the group’s stores, which also include the Gamestation brand, are still open for business.
It is understood that one of Game’s main lenders, taxpayer-backed Royal Bank of Scotland, has objected to the terms of a rescue deal with private equity firm OpCapita, which recently bought electrical goods retailer Comet.
It has been reported that Game faces a £21m rent payment due on Sunday and a £12m wage bill at the end of the month, and owes more than £10 million in VAT and £40m to suppliers. A new investor would have to pay up to £100m to Game’s banks.
Game has borne the brunt of dire trading in recent months, which has forced the chain to ask its suppliers for more generous trading terms.
Some of them have instead stopped supplying Game with new releases, such as Mass Effect 3 and Street Fighter X Tekken, leaving fans disappointed and adding to the group’s trading woes.
Game agreed fresh lending facilities with banks last month and began seeking access to alternative sources of funding earlier this month.
It has already signalled that losses for the year to the end of January are likely to be around £18 million.