PWC has announced that 2,104 staff members of the loss-making Game retail chain are to lose their jobs this week as 277 stores throughout the UK and Ireland are closed with immediate effect. PwC was officially appointed administrator of the distressed computer game specialist this morning and made the announcement within hours of taking control.
The job losses represent around 40 per cent of the company’s total work force and will come from its Game and Gamestation branches. There will also be fifteen job losses at the group’s head office. 46 jobs were cut at the Basingstoke head office in Februrary as the company desperately tried to stay afloat in a rising tide of debt.
In a statement released this afternoon PwC said, “Having reviewed the ongoing operational requirements of the business and with the continued difficulties on the high street, unfortunately it has been necessary to close 277 stores throughout the UK and Ireland as of today.”
The first to leave Game was CEO Ian Shepherd who resigned shortly after the company entered administration. In a leaked internal memo to staff he wrote, “I’ve said a number of times that the administrator, once appointed, takes charge of the business. Having two people try to do that is both confusing and a waste of money. With that in mind, I’ve agreed…that I will step down as CEO... immediately.”
Mike Jervis a senior PwC Partner in charge of the administration told the BBC, “Insolvency can be brutal but this is also an opportunity to restructure. The stores which are closing were all loss making...We hope what comes out of it is a viable going concern.” He added, “We really do regret it. But Game has 610 stores and that is just too many to make it viable.”
Shares in Game fell from above 70p at the start of last year to under 1p, before being suspended on Wednesday last week when the a spokesman was forced to admit that there was "no equity value left".
Jervis tried to offer some explanation as to why a retailer in a buoyant video game market faced has faced such financial difficulties. He said in a statement, "The group has faced serious cash flow and profit issues over the recent past. It also has suffered from high fixed costs, an ambitious international roll-out and fluctuating working capital requirements."
He added, “Our priority is to continue trading the business as normal while we continue to pursue a sale. The recent job losses are regrettable but will place the company in a stronger position while we explore opportunities to conclude a sale.”
However, angry staff members have been expressing their anger and frustration online. One former employee posted on the website of gaming industry magazine MVC that he had received “the phone call from our regional manager just before 1pm, within the next 5 minutes our store [was] closed.”
The group’s remaining 333 stores, which employ nearly 3,000 staff, will stay open while the administrators negotiate with potential buyers for the business. However, if a buyer is not found for the group soon it is likely that there will be further closures.