Threat to 10,000 jobs as embattled Game searches for a buyer

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

This could jeopardise 10,000 jobs and wipe out the company’s investors. Reports over the weekend said advisory firm Rothschild has been appointed to find a buyer for the business, which includes 600 UK shops, but that completing a deal in such a short time-frame will be difficult.

The retailer’s trading difficulties deepened in recent weeks, despite the company agreeing to revised lending facilities with its banks last month.

But the loan was not enough to reassure suppliers, with Game reportedly losing the rights to sell keenly awaited fighting game Street Fighter X Tekken.

Last month the retailer told gamers it would not be selling popular sci-fi game Mass Effect 3, supplied by Electronic Arts.

Deloitte is understood to have been lined up to handle any insolvency process which could see Game’s UK operations put through a pre-pack administration in order for some or all of its estate to be sold on quickly.

The company, which has 1,300 stores worldwide trading under the Game and Gamestation brands, suffered a dismal Christmas.

Like-for-like sales fell by 12.9 per cent in the eight weeks to January 7.

The company, which has over 30 Game and 20 Gamestation stores in Yorkshire, blamed the poor trading on a lack of new consoles and a squeeze in consumer spending.

It also reported a 10 per cent drop in like-for-like sales in the 49 weeks to January 7.

At the time Game chief executive Ian Shepherd said: “Our industry had an incredibly tough 2011, and so did we.”

Game has slashed prices in a bid to draw in customers and this hit gross margins over the Christmas trading period.

Despite the weak performance, Game still outperformed the overall games market, which was down 13.1 per cent for the 49-week period, compared with its own 10 per cent decline.

The company had hoped that the launch of two new hand-held consoles this year – the PlayStation Vita and Nintendo Wii U – would boost sales in 2012 after a dry patch for new hardware.

Mr Shepherd added: “We are adapting to the changing market and are well-prepared for the next hardware cycle.”

Game has already signalled that losses for the year to the end of January will be around £18m.

Game declined to comment on speculation yesterday that it has put itself up for sale.