UK video game specialist retailer, GAME, has announced its closing 40 stores throughout the UK unless landlords set “realistic, fair rents”.
To date, 13 stores have already been notified of the “store rationalisation programme” including outlets in Mansfield, Canterbury, Watford, Glasgow Fort, and Leicester. 14 further sites, including stores in Derby, Norwich Chapelfield, Lakeside, Bexleyheath and Carmarthen received notification yesterday, and GAME says it “intends to serve notice on the additional sites in the near future”. It acknowledges many of the planned closures affect landlords Intu and New River.
GAME called in a property consultancy to review its property portfolio back in October 2019, which signalled at the time that it could potentially lead to store closures, relocations, and job cuts. A spokesperson from property consultancy CBRE, James Keany, said at the time it was advising GAME on its 259 video game stores and 21 Belong esports arenas.
Keany said the firm would also be working “alongside” Sports Direct which is also owned by Mike Ashley, who has an 84 per cent stake in the video game retailer. Keany added there was a “significant opportunity” the company will restructure its current portfolio, “with store closures and relocations on the cards”.
In a brief statement to the press, a spokesperson for GAME stated: “We are working closely with landlords throughout the UK to ensure that we do not have to vacate the 40 locations which could lead to a number of job losses. However, we are facing a challenging retail market and GAME with its extensive retail footprint, needs to restructure and landlords need to work with us in setting realistic, fair rents.”
Sports Direct CEO Mike Ashley first took an interest in the game retailer in 2017 after securing a 26 per cent share in the company. He then invested a further £3.2m for 50 per cent of the profits and IP ownership of GAME’s exhibition spaces, Belong, including a deal to set up Belong arenas in Sports Direct stores with possible GAME concessions. As rules stipulate that when a shareholder’s stake goes above 30 per cent a takeover offer must be made, GAME’s board of directors accepted Sports Direct’s mandatory cash offer made on June 5th at the end of June 2019.
The High Street retailer said in an announcement at the time: “The board has been considering the merits of the mandatory offer and consulting with its major shareholders and advisers, whilst also actively engaging in normal course discussions with Sports Direct and its advisers during this time.
“Whilst the board is disappointed that Sports Direct decided to issue its offer document unilaterally whilst these discussions were ongoing, the board has unanimously concluded, following a period of detailed deliberation and having been so advised by Canaccord Genuity Limited, that 30 pence per share represents a fair value for the group and intends, therefore, to recommend that shareholders accept the mandatory offer, as those members of the board who hold GAME shares intend to do.”