Hopes for Game as interest emerges

The future of struggling retailer Game was looking less bleak tonight as the group confirmed a third party has shown interest in providing it with extra support.

The group, which employs 10,000 people, warned earlier this week that it was in danger of collapse after several suppliers refused to provide it with new products.

Game said a third party – reportedly private investment firm OpCapita, which recently bought electrical goods retailer Comet – is in talks with its lenders.

A statement said: “The board of Game confirm that a third party has shown interest in providing additional funding for the company. The third party is seeking a dialogue with the group’s current lenders, however there is no certainty to the outcome.

“At the same time, the board remains in its own discussions with its current lenders as it continues to conduct a review of its business and assets.”

Earlier this week, Game said it was seeking access to alternative sources of funding and has asked suppliers for more generous trading terms, but so far it has not been possible to source new products from a number of suppliers.

Game admitted that it is uncertain whether its efforts will be successful or whether the company will be left with any value.

The group’s quarterly rent bill is due in a fortnight and failure to pay its landlords could push it into administration.

The Times reported that OpCapita has tabled a bid to buy out the group’s lenders, including complete repayment of all the chain’s suppliers, with the speculation prompting an 82% surge in the share price.

The company’s woes have been made worse after it failed to stock new eagerly awaited titles such as Mass Effect 3 and Street Fighter X Tekken.

The group agreed fresh lending facilities with banks last month but the loan was not enough to reassure suppliers, who have balked at being asked to give the group better terms to help it stay afloat.

The company, which has 1,300 stores worldwide trading under the Game and Gamestation brands, suffered a woeful Christmas, with like-for-like sales down 12.9% in the eight weeks to January 7, blamed on a lack of new consoles and a squeeze on consumer spending.

It has already signalled that losses for the year to the end of January are likely to be around £18m (€21.6m).