After an extended struggle with finances that resulted in the year's hottest titles skipping store shelves, the GAME group prepares to enter administration, as the video game retailer's board accepts the fact that "there is no equity value left in the Group".
What could be the end for one of Europe's largest video game retailers comes as no surprise. In financial trouble for some time now, recently the once proud company had begun skipping out on big-name releases like Mass Effect 3, unable to negotiate terms with publishers wary of the retailer's shaky financial position. No one wants to commit large amounts of product to a company that could go under any minute, resulting in a sort of catch 22 situation for the retailer -- they couldn't stock the games necessary to generate the revenue needed to stock the games.
In a release earlier this morning the GAME Group halted trading of its securities in the London Exchange.
The Board now considers itself to be unable to assess the business's financial position, and is of the opinion that there is no equity value left in the Group. Therefore the Company has requested that the listing of its securities on the Main Market of London Stock Exchange plc be suspended from trading with effect from 7:30am today.
This suspension of trading notice was followed shortly by a notice of intent to appoint an administrator.
For our US readers, going into administration is akin to filing for Chapter 11 bankruptcy in the states. A court-appointed champion is placed in charge of attempting to rescue the company or, failing that, ensure the company's creditors recover as much of their investment as possible before the ship sinks.
In the case of the GAME Group, administration seems like a temporary stay of execution. I expect the company's remaining assets to be liquidated over the following weeks, followed by the sad death of one of Europe's great gaming institutions. Either that, or another game retailer will swoop in and swallow them whole.
Notice of Intention to Appoint an Administrator [The GAME Group]