Note by Delimiter: The GAME Group operates some 95 stores around Australia, employing some 600 staff. The retailer is a major competitor to retailers like EB Games and JB Hi-Fi.

This article titled “Game Group to offload overseas shops as UK sales plunge” was written by Martin Farrer, for guardian.co.uk on Friday 3rd February 2012 08.02 UTC

The struggling video game retailer Game Group has been given a lifeline by its banks after agreeing to sell its overseas stores.

Game, which has issued a series of profit warnings in the past year as sales have plunged, said it had agreed to operate within lower lending limits after talks with its lenders and would now meet its banking covenants at the end of this month. It said on Friday that it would make an £18m loss for the year to 31 January.

The group, whose lenders are led by RBS, also agreed to provide an “updated strategic plan for review and approval, in part, by the lenders”. This will include a review of its overseas operations, which include hundreds of stores in France, Spain and Australia.

Game has been hit hard by online competitors and has had to discount heavily to attract customers, in turn affecting margins. Last month it warned that a disastrous Christmas trading period, when sales fell 15%, meant it might breach its banking covenants. It operates 610 stores in the UK but has already announced plans to close 60 of them.

Online competition means that the company has failed to cash in on the huge popularity of games such as Call of Duty, the new edition of which racked up bn of global sales within just 16 days of being released in November.

However, Game hopes that next month’s European launch of the PlayStation Vita will provide a sales boost for the whole games market, with that console to be followed by Nintendo’s new Wii U later this year.

guardian.co.uk © Guardian News & Media Limited 2010

Published via the Guardian News Feed plugin for WordPress.

Image credit: GAME Group

Related posts:

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2. Game Group to enter administration
3. Game in talks over possible rescue deal
4. GAME taken back to the brink as creditors shun rescue plan
5. Game warns investors as shares collapse

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1. Goddy
   Posted 04/02/2012 at 2:04 am | Permalink | Reply

   This same fate will kill being Gametraders to its knees as well, while EB games will be kept afloat by the good business of its American counterpart, Gamestop.

   However, even they won’t be immune to the ever growing online industry. The prices EB charge in Australia is pretty much legal racketeering, and when the word of Ozgameshop, PlayAsia and other such import sites are spread far enough, they will find themselves in the same boat as GAME.

   Evolve or perish – Charles Darwin.

   • Siri
     Posted 07/02/2012 at 3:08 pm | Permalink | Reply

     Your comments are exactly why I love the internet! Even people who have no idea about the nuts and bolts of the issues can pretend to know what they are talking about!

2. Mathew
   Posted 05/02/2012 at 1:39 pm | Permalink | Reply

   I haven’t checked recently, but I bet their own UK website is cheaper (posted to Australia) than their Australian retail outlets.

3. PointZeroOne
   Posted 06/02/2012 at 10:55 am | Permalink | Reply

   There Australian online stores often have some seriously cheap sales. (way undercutting EBGames as well)

   most game stores in my area closed years ago.