Game changer: GAME officially enters administration
GAME has failed to find itself a buyer at the eleventh hour despite earlier reports of a potential buy from RBS and, as a result, has entered into administration.
It previously signaled its intent to find an administrator last week.
Mike Jervis and Stuart Maddison of PWC have been appointed joint-administrators of the UK and Irish arm of the retailer. In a statement, it said there was still room for a specialist chain on the high street.
"The group has faced serious cashflow and profit issues over the recent past. It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements," said Jervis.
"Despite these challenges, we believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK. As a result we are hopeful that a going concern sale of the business is achievable.”
In its appointment of PWC, GAME's board of directors went on record to thank its staff.
"The Board would like to thank the teams of GAME and Gamestation colleagues around the world for their exemplary dedication, passion and professionalism."
CEO Ian Shepherd has also stood down as of immediate effect to make way for Jervis, according to an internal memo gathered by MCV.
"I’ve said a number of times that the administrator, once appointed, takes charge of the business,” he said.
“Having two people try to do that is both confusing and a waste of money. With that in mind, I’ve agreed with Mike that I will step down as CEO and the business immediately – this is my final email to you all.
"I’m sad to confirm that no deal has been done, and so I have signed the necessary paperwork this morning to allow the appointment of administrators. The process has been finalised, and so Mike Jarvis from PwC takes charge immediately."
Shepherd has also warned of massive changes in the short-term future, including the closing of stores.
"Let’s be clear, he will certainly make big changes, both to the store estate and in the office, but will be doing so with a view to creating a trading business that he can attract a buyer for."
GAME has since suspended usage of its Reward Cards, gift-cards and the trading-in of hardware. Software is currently being accepted, but consumers will only get credit and not cash.
Store closures are also popping up all over Twitter, with VG247 contributor Alex Donaldson also reporting that GameStation's flagship store in Birmingham has also been closed.
Reports have also been circling that Irish stores are also closing, but VG247 can verify that at least one Northern Irish store, in Derry, is still open.
We send our best wishes to those affected.