// CBRE appointed to review Game and Belong’s store portfolio
// The property consultancy firm will be advising Game and working alongside Sports Direct
// CBRE’s review will be a combination of closures and relocations, with a “focus” on Belong
Game is set to undergo a review of its property portfolio that could lead to store closures or relocations, raising questions around whether job cuts may result from the changes.
In a statement circulated today, property consultancy firm CBRE said it has been retained as the sole advisors on the Game portfolio, which includes 259 video game stores as well as 21 Belong esports arenas.
CBRE’s James Keany said they would be working “alongside” Sports Direct while advising Game during the review.
He also said there was a “significant opportunity” to restructure the current portfolio, with store closures and relocations on the cards.
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“The existing Game portfolio has an average unexpired term of less than 0.8 years which offers a significant opportunity to re-structure the current portfolio,” said Keany, who is CBRE’s head of national agency.
“There will be a combination of closures and relocations, with the focus being Belong, their exciting esports gaming platform.”
The Retail Gazette has sought clarification around what might happen to staff affected by the potential store closures.
On the other hand, CBRE told Retail Gazette that the decision to restructure Game’s portfolio was a mutual one that came from both the video game retailer and Sports Direct.
An exact number of how many stores could potentially shut down was not provided, although CBRE confirmed it “will depend on negotiations with landlords”.
Retail Gazette also sought clarification on relocation plans and whether it would affect Belong sites more than Game or vice-versa, to which CBRE said it would differ depending on the location and market.
Sports Direct has also been contacted for comment.
In June this year, after purchasing shares from another shareholder to bring its holding up to 38.49 per cent, Sports Direct made a full takeover bid worth £52 million – which was subsequently accepted by Game.
City rules stipulates that when a shareholder’s stake goes above the 30 per cent threshold, a takeover offer must be made.
By July, Sports Direct’s stake in Game had exceeded 75 per cent and Game was de-listed from the stock market.
Prior to all that, in February 2018 the two retailers had entered into a collaboration agreement shortly after Sports Direct increased its then-stake in Game to 26 per cent.
The £3.2 million deal saw Game hand over a 50 per cent stake of its Belong esports division to Sports Direct, while Sports Direct provided a £35 million capital expenditure facility for Game.
However, according to its full year report published in July this year – shortly after its full takeover of Game was green lit – Sports Direct conceded it did not believe the video game retailer was able to weather the industry pressures it faced and that these pressures would “only become more acute” over the short to medium term.
“To get the Game retail and Belong concepts right will also require a higher degree of flexibility than has proven possible under the current collaboration agreement,” Sports Direct said in its report.
“In a challenged market, the collaboration agreement simply does not go far enough to address the issues Game faces as a standalone business.”
It added: “Sports Direct believes that Game needs to diversify and future-proof its product mix if it is to keep up with technological developments and ensure that it does not become irrelevant to customers.”
Sports Direct also used its full-year report to concede that Belong was not a significant profit-driver on its own.
“Whilst Sports Direct continues to believe that the Belong concept is attractive, it can only see it as a viable business proposition as part of a wider group that can take a more holistic review of its component parts and where Belong can be combined with a focus on experiential retail creating a halo effect within stores and other physical locations,” Sports Direct said.
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