THOUSANDS of jobs are at risk, including those at 24 stores in Yorkshire and the Humber, after retailer Game conceded defeat in its survival battle after failing to raise new funding.
The group, which was reportedly battling to raise £180m this week, said yesterday it intended to appoint administrators as rescue talks had not made sufficient progress.
It employs 10,000 staff across its operation, and 6,000 in the UK. It declined last night to say how many employees it has in the region, although there are outlets in Barnsley, Bradford, Doncaster, Castleford, Grimsby, Halifax, Harrogate, Huddersfield, Hull, Keighley, Leeds, Rotherham, Scunthorpe, Sheffield, Wakefield and York.
Game, which operates 600 stores in the UK and 1,300 worldwide, intends to appoint administrators in the coming days, but in the short term will continue to trade as discussions with its banks and other potential funders continue.
This will fuel expectations that it will attempt a pre-pack administration deal involving the sale of some of its estate.
It is understood that one of Game’s main lenders, taxpayer-backed Royal Bank of Scotland, objected to the terms of a rescue deal with private equity firm OpCapita, which recently bought electrical goods retailer Comet.
Game’s shares were suspended yesterday after it admitted the business has no value.
The group said in a statement: “The board has concluded that its discussions with all stakeholders and other parties have not made sufficient progress in the time available to offer a realistic prospect for a solvent solution for the business.”
The notice to appoint administrators will buy it time to continue discussions with potential funders and stop creditors forcing it under.
It has been reported that Game faces a £21m rent payment due on Sunday and a £12m wage bill at the end of the month, and owes more than £10m in VAT and £40m to suppliers. A new investor would have to pay as muchn as £100m to Game’s banks.
Game has suffered dire trading in recent months, which has forced it to ask suppliers for more generous trading terms.
But some of them have instead stopped supplying it 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 £18m.
Pre-pack administration deals are controversial because they allow parts or all of the business to be sold but its debts to be written off.