Game Group to file for administration
- 21 March 2012
- From the section Business
Struggling video games retailer Game Group has said it intends to file for administration.
Earlier, shares in Game were suspended "pending clarification of the company's financial position".
The firm said talks with stakeholders and other parties had not made enough progress to offer "a realistic prospect for a solvent solution".
Game has seen its business eroded by competition from online-only retailers, such as Steam and Amazon.
Last week, the retailer confirmed that a number of suppliers were refusing to do business with the company.
The group, which is headquartered in Basingstoke, has 1,300 stores worldwide, including 600 in the UK.
It said the business would continue to trade and discussions with lenders and third parties would continue.
In an earlier statement on Wednesday, the firm asked for its shares to be suspended, saying the value of the company had been eroded.
Shares in Game closed at 2.39p on Tuesday, having fallen from 62p a year ago.
Game acquired GameStation in 2007, adding hundreds of new stores to its portfolio. Piers Harding-Rolls, head of games at IHS Screen Digest, said that with hindsight, this move could now be seen as over-expansion.
"Whilst it reaped the reward of this in 2008, when lots of content was sold thanks to new consoles and handheld devices, the packaged game market has since declined," he said.
But he added that there was still a place for a large specialist games retailer on the High Street, with 70% of spend on games content in the UK still in the form of physical media.