Time is running out for the ailing British retailer.
Though beleaguered by a string of heavy losses which have pursued it since the tail-end of last year, British retailer The Game Group has managed for months to keep its head above water while its owners search for new sources of investment. However, it now appears that time is running out for the company at speed: According to a new report, The Game Group has to find $286 million (£180 million) in investment prior to the end of March if it is to have any hope of seeing April. This news is particulary unwelcome for the company’s large workforce, which numbers over 6,000 employees in the UK alone.
Already weighed down by massive debt and having lost millions over its failure to stock Mass Effect 3, The Last Story, and a wide array of other titles, the company now faces an end-of-the-month crunch the likes of which it has never known. The $286 million it needs to survive is composed of $33.4 million (£21 million) in rent payments, $19.1 million (£12 million) in wages, $15.9 million (£10 million) in owed sales tax, and then $63.6 million (£40 million) in payments owed to suppliers. The company also owes in excess of $158.9 million (£100 million) to various banks. Any investor would need to be willing to cover these expenses to avoid seeing The Game Group slip into administration.
Who might this potential investor be, then? Over the past weeks various rumors of interest have flared and before quietening, culminating last week The Game Group’s creditors’ rejection of OpCapita’s buyout plan. While it could be the case that buyers are waiting until the company enters administration before making a bid, the enormous starting costs coupled with the expectation of further losses on the part of any investor don’t give much hope for a last-minute rescue.
With that in mind, many in the British games industry (including The Game Group’s thousands of employees) will spend this week wishing for such an investor to appear before the end of the month. While The Game Group’s retail model isn’t favored by everyone, its GAME and Gamestation locations remain the biggest and most visible game stores in the country. What would the British games market look like if they fell? Sadly, given the general tenor of the past two months, it might not be that long until we find out.
Published: Mar 19, 2012 06:44 pm