Troubled UK retailer GAME has brushed off concerns over its finances, telling MCV it has the money to do ‘the most significant console launches you could ever imagine’.
In May, GAME said that a review by major credit insurers had resulted in the reduction or removal of significant levels of insurance cover”. The High Street chain has since raised funds by reducing its cost base, selling its office and distribution facilities and securing new financing.
In terms of credit insurance, there was some disruption going back many months, but after that we put new financing into the group,” CFO Mark Gifford (far right) said.
All of our suppliers are credit insured and there is no issue with any of our suppliers. We have better supplier credit terms than ever. We have enough cash, and bullet proof financing, to take us through this peak and beyond. We have enough financing to do the most significant console launches you could imagine. If Nintendo’s next device is as big as the Wii, if Scorpio turns out to be the biggest device ever… we have financing to buy all that stock. We’ve been working really hard on that, to put us in a great position.”
CEO Martyn Gibbs (above left) added: In terms of the sale and lease back [of its distribution and office facilities], we were quite unique to say the least. We have owned the property and when I started in 2012, this was not something I wanted to be doing. Mark has done a great job to unlock that cash into the business. I don’t know any retailer that owns its distribution centre and office…that was quite unique. Having that extra cash in the business supports things like the roll-out of new initiatives, such as our gaming arenas.”
GAME revealed this week that its profits had fallen 81 per cent for its last financial year. However, the firm is bullish about the months ahead due to the new consoles, plus the early reception to PlayStation VR.
The firm is expanding into new areas, including eSports, but the upcoming Christmas period will prove vital as it looks to arrest declines in both its profitability and share price.