Game Group set to become biggest High Street casualty since Woolworths as it calls in administrators

Published 21st Mar 2012

Game Group is set to become the next major retailer to disappear from the High Street as it called in the administrators today.

The video games retailer, which has 1,300 stores worldwide and employs 10,000 staff, suspended its shares earlier when its management admitted the business has no value.

The company is teetering on the brink of a collapse which could be the largest in the retail sector since the demise of Woolworths.

But there remains the possibility that investment firm OpCapita, which recently bought electrical goods retailer Comet, could still buy Game out of administration with far fewer stores.

With a huge rental payment due on Sunday and suppliers refusing to provide it with new products, lenders to the retailer have been locked in talks over a potential bid by OpCapita since last week.

But Game’s syndicate of six banks, including state-owned Royal Bank of Scotland, are thought to have rejected the only fully funded offer on the table from the firm.

Some 600 of Game's stores are in the UK, employing 6,000 staff. All the group's stores, which also include the Gamestation brand, are still open for business.

It is understood that one of Game's main lenders, taxpayer-backed Royal Bank of Scotland, has objected to the terms of a rescue deal with private equity firm OpCapita.

It has been reported that Game faces a £21million rent payment due on Sunday and a £12million wage bill at the end of the month, and owes more than £10million in VAT and £40million to suppliers.

A new investor would have to pay up to £100million to Game's banks.

Game has borne the brunt of dire trading in recent months, which has forced the chain to ask its suppliers for more generous trading terms.

Some of them have instead stopped supplying Game with new releases, such as Mass Effect 3 and Street Fighter X Tekken, leaving fans disappointed and adding to the group's trading woes.

Game agreed fresh lending facilities with banks last month and began seeking access to alternative sources of funding earlier this month.

It has already signalled that losses for the year to the end of January are likely to be around £18million.

An OpCapita spokesman said: 'We put forward a fully funded proposal which would have preserved Game as a viable business in partnership with the suppliers, who have been very supportive.'

Source: ' ThisIsMoney '

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