The video games specialist Game has officially entered administration, appointing PwC prior to a swift restructuring that is expected to result in heavy job losses and the closure of half the firm's 600 UK stores.
PwC's Mike Jervis said the company was hopeful that a buyer could be found for the chain, which has nearly 6,000 UK staff.
He said: "We believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK. As a result, we are hopeful that a going concern sale of the business is achievable."
At the end of last week, Game said it was heading into administration after 11th hour talks with its lender, led by the state-controlled Royal Bank Of Scotland (RBS), failed to "offer a realistic prospect for a solvent solution".
At the same time, its shares were suspended from the London Stock Exchange, with its investors having previously been warned that their investment was worthless.
"Game has faced serious cashflow and profit issues over the recent past," Jervis said. He explained that high fixed costs and an ambitious international rollout had also added to the firm's problems.
The demise of the group follows a string of profit warnings and the failure of nervous suppliers, including Electronic Arts and Nintendo, to continue providing new games.
A £21m rent bill fell due last weekend and a £12m wage bill is due to be settled this weekend, although PwC is expected to honour any wages owed. There is also £10m in VAT and £40m owed to suppliers.
The retailer, which trades as Game and Gamestation, had sales of £1.6bn last year. It has 609 stores in the UK and Ireland, employing 5,136 staff, as well as another 385 employees at its head office in Basingstoke.
A number of parties, including a group led by RBS, are said to be interested in acquiring a slimmed-down business out of administration.
The RBS-led consortium is expected to roll the existing debt of about £85m into the new company.
Bids are also expected from American rival Gamestop and OpCapita, which recently acquired Comet and has tabled one offer for Game already.
In a statement, Game said it had completed its discussions with lenders and third parties without resolution and had therefore appointed PwC.
"This decision is taken after careful consideration and ceaseless interrogation of every possible alternative," the statement said.
"The board would like to thank the teams of Game and Gamestation colleagues around the world for their exemplary dedication, passion and professionalism."
guardian.co.uk
PwC's Mike Jervis said the company was hopeful that a buyer could be found for the chain, which has nearly 6,000 UK staff.
He said: "We believe that there is room for a specialist game retailer in the territories in which it operates, including its biggest one, the UK. As a result, we are hopeful that a going concern sale of the business is achievable."
At the end of last week, Game said it was heading into administration after 11th hour talks with its lender, led by the state-controlled Royal Bank Of Scotland (RBS), failed to "offer a realistic prospect for a solvent solution".
At the same time, its shares were suspended from the London Stock Exchange, with its investors having previously been warned that their investment was worthless.
"Game has faced serious cashflow and profit issues over the recent past," Jervis said. He explained that high fixed costs and an ambitious international rollout had also added to the firm's problems.
The demise of the group follows a string of profit warnings and the failure of nervous suppliers, including Electronic Arts and Nintendo, to continue providing new games.
A £21m rent bill fell due last weekend and a £12m wage bill is due to be settled this weekend, although PwC is expected to honour any wages owed. There is also £10m in VAT and £40m owed to suppliers.
The retailer, which trades as Game and Gamestation, had sales of £1.6bn last year. It has 609 stores in the UK and Ireland, employing 5,136 staff, as well as another 385 employees at its head office in Basingstoke.
A number of parties, including a group led by RBS, are said to be interested in acquiring a slimmed-down business out of administration.
The RBS-led consortium is expected to roll the existing debt of about £85m into the new company.
Bids are also expected from American rival Gamestop and OpCapita, which recently acquired Comet and has tabled one offer for Game already.
In a statement, Game said it had completed its discussions with lenders and third parties without resolution and had therefore appointed PwC.
"This decision is taken after careful consideration and ceaseless interrogation of every possible alternative," the statement said.
"The board would like to thank the teams of Game and Gamestation colleagues around the world for their exemplary dedication, passion and professionalism."
guardian.co.uk
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