Game over Down Under | IR News

Game over Down Under

Posted Date: 15/05/2012

By Inside Retail

The Australian operation of collapsed UK retailer Game has been placed in voluntary administration.

Inside Retail understands efforts to find a buyer for the chain have proved fruitless, despite strong growth in the games market and the rationalisation of the Dick Smith Electronics network by parent Woolworths.

Pricewaterhouse Coopers announced it had been appointed to handle the process.

Game has 92 stores across Australia and other news sites are reporting it turned over a modest $33 million locally in 2011. If that's true, each store would have averaged just $358,000 in sales, insufficient to meet wages and rent let alone stock costs.

The Australian arm was just a small part of a 1300-store global network largely centred in the UK and Europe. The board of the parent company declared in April the company was essentially valueless.

An estimated 500 jobs now hang in the balance in Australia.

Pricewaterhouse Coopers says Game's stores will continue to trade while options for their future are considered.

Inside Retail suspects the most valuable aspect of the operation would be its network of sites, but with retail chains contracting and collapsing in a challenging market, there are few companies seeking sites for expansion and already a surplus of vacancies in many major shopping centres.

The collapse has left an unknown number of customers out of pocket who had placed deposits for preorders of the popular game Diablo 3. They've been told they won't be receiving the game - or their money back.

Keywords: Game

Comments:

Tuesday, May 15, 2012 by Paul

I was wondering what would happen with the pre-orders that were still being advertised heavily in-store and on the web. I don't pretend to understand the legal relationship between the overseas entities and the local business however it seemed inevitable that the AU operation was going to fail based on the overseas liquidation. It seems unethical at the least to be continuing to trade in this way when clearly the writing was on the wall. I only knew of the overseas experience as I follow Retail news but I feel sorry for all the gamers who had paid deposits in good faith having no idea that this was happening and that their pre-orders would not be fulfilled.

Tuesday, May 15, 2012 by Peter

I am amazed how a game company can grow to that extent as there just arent the profit margins to sustain all the outgoings, unless your adding rental and buy and sell in the second hand market.
As a person that had a company of 3 game stores 10 years back in the 90's not located in shopping centres, the only time that you did really well was when New consoles came out.
The problem is it has a limited market as it dosent appeal to everyone also piracy and console chipping were other problem areas it had to contend with and the profits were sooo low on hardware and software, these days they also have internet shopping to add to their problems.
I cannot understand how Electronic Boutique is surviving perhaps they are next?

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