March 14 2014 Latest news:
Sunday, April 1, 2012
The expected announcement of a rescue deal could give workers at struggling Game stores in Norfolk and Suffolk a ray of hope today (Sunday).
More than 3,000 jobs are expected to be saved by a deal to rescue part of retailer Game Group by a turn-around investment firm in a boost for the high street.
Opcapita, which recently bought electrical goods retailer Comet, is set to announce that it is buying a substantial part of the computer games chain, keeping open 333 shops and saving 3,100 jobs, the BBC said.
The UK operations of the retailer, which trades as Game and Gamestation, collapsed into administration on Monday, triggering 277 store closures and 2,104 redundancies.
Shops on the High Street and Norfolk Street in King’s Lynn, the Britten Centre in Lowestoft, Market Gates in Great Yarmouth, and the Butter Market in Bury St Edmnuds were among those which kept trading.
But a total of four stores in Norwich, Great Yarmouth and Lowestoft are now closed.
Administrator PricewaterhouseCoopers, which was not immediately available for comment, has been searching for a buyer for the business while the remaining shops were kept open.
OpCapita is understood to have paid a nominal amount, believed to be £1, for Game’s assets.
However, the real cost will be taking over the company’s £85 million debts. It is understood the company’s lenders, led by Royal Bank of Scotland, will have agreed to roll forward the debts at the same time as taking a slight reduction.
OpCapita was among a number of potential bidders for the remaining assets including a consortium of existing banks including RBS and American rival Gamestop.
OpCapita, which bought Comet for a token £2, specialises in investing in and turning around stricken retail chains.
Game’s demise followed a string of profit warnings and the failure of nervous suppliers, including Electronic Arts and Nintendo, to go on providing new games.
The retailer had a £21 million rent bill due last week and faces a £12 million wage bill this weekend, although PwC is expected to honour any wages owed. There is also £10 million in VAT and £40 million owed to suppliers.
Game suffered a dismal Christmas and was later forced to ask suppliers for more generous trading terms.
But many stopped supplying it 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.
The group has already signalled that losses for the year to the end of January are likely to be around £18 million.