Video games retailer Game Group has been acquired by private investment firm OpCapita in a deal worth £50 million, it was revealed yesterday.
The beleaguered company had entered administration last week after failing to agree renewed terms with its suppliers to adequately deal with its debts, and subsequently confirmed the closure of 277 of its stores in the UK & Ireland.
OpCapita’s investment means that the remaining 333 domestic stores will be saved, and with some existing head office staff members now retaining their roles as part of the deal almost 3,200 employees will be spared redundancy.
Henry Jackson, Managing Partner of OpCapita, commented: “We are pleased to have reached agreement with the administrator. We strongly believe there is a place on the high street for a video gaming specialist and Game is the leading brand in a £2.8 billion market in the UK.
“We have assembled a strong team of experienced industry operators to implement the programme of operational change that is needed. There is a huge amount to do but we look forward to the challenge of restoring Game’s fortunes in partnership with its employees and suppliers.”
After Game entered into administration last week its former CEO Ian Shepherd stood down from his position, and it is now expected that former Halfords boss David Hamid will be recruited to become the retailer’s new Chairman.
Suppliers will not be paid the outstanding £40 million they were owed as part of the deal, and its lenders have had to take a significant cut to the money owed to them via loans.
Outstanding debt and poor trading issues came to a head at the end of February when one of its main suppliers, Electronic Arts, refused to agree to amended terms and withdrew its titles from Game stores, but it is understood that an agreement has now been made so that the retailer’s remaining outlets will be fully stocked.
Game operates some 1,270 overseas stores, which employ around 4,000 people, but it is expected that many of these outlets will close following a review of the group’s international business.
Mike Jervis, Administrator to Game and partner at PricewaterhouseCoopers, said: “We are delighted to be able to secure this business sale and provide some much needed stability for customers, suppliers and employees alike in these uncertain times.
“The support of these stakeholders has been crucial over the last week and I would like to thank them for their support throughout this difficult period. This means that the Game brand will not be another one of the retail names disappearing from the high street in the current difficult climate.”
OpCapita specialises in operational turnarounds in retail and last year acquired troubled electricals trader Comet in a deal worth just £2.