Struggling retailer Game Group, which owns the GAME and Gamestation high-street video game shops, has confirmed that it will enter administration, signalling desperate times for the company, which employs nearly 6,000 people in the UK and Ireland.
By going into voluntary administration, the company has secured a 10-day moratorium, which gives it a chance to complete a deal with any potential buyers, the Telegraph reports.
Game Group says that in the short term the business will keep trading, while discussions with lenders and third parties are set to continue. Warnings that Game wassurfaced earlier this month.
The company confirmed its intentions in a statement, having earlier today requested that its shares be suspended from trading on the London Stock Exchange. The company says there is "no equity value left in the Group", which means its shares are worthless.
"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," today's statement reads.
"The board has therefore filed a notice of intention to appoint an administrator."
The retailer owns 1,300 shops worldwide, 641 of which are located in the UK and Ireland, employing a total of 5,800 people. Its brick-and-mortar business has been challenged by online shops like Amazon and download platforms like Steam, which let you play the latest titles without having to leave your home.
The race is on to rescue the troubled company. The Guardian reports that Game Group faces a £21m rent payment on Sunday, as well as a £12m wage bill at the end of March, and a new investor in the company would need to stump up £100m to Game's banks.
The paper reports that private-equity house OpCapita, the same company that, is in negotiations with Game Group to sort out a rescue deal, though an offer made by OpCapita last week was turned down by RBS, one of Game's main lenders.
Games industry magazine MCV reports that Game's current plan is to form a brand-new company on Monday that includes only the group's UK and Spanish chains, and will involve shutting down all Gamestation shops, except for a few that perform well. Game has since been in touch to say it challenges "many of the claims" made in MCV's article, however.
It remains to be seen whether the company can be pulled back from the brink. With Currys sold off last year, and Carphone Warehouse Facebook wall., could this be the end of physical game and gadget shops? Let me know your thoughts in the comments, or on our