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Administration for GAME AU, stores remain open

Monday, 14th May 2012 01:17 GMT By Brenna Hillier

The Australian arm of international games retailer GAME has followed its UK parent into voluntary administration, although stores will continue to trade as normal.

Administrator Pricewaterhouse Coopers has confirmed that the retail chain’s more than 90 local stores will remain open for now, until the company has a better grasp on the situation.

The accountancy firm acknowledged the claims of those with store credit, gift vouchers and loyalty points and is working on solutions for redemption. More information is promised soon.

It is not yet clear how staff will be affected; GAME employs around 500 Australians. Several local GAME outlets could not be contacted by telephone. GAME’s PR representative is yet to respond to requests for comment.

“We are still trading in all stores and will operate in a business as usual mode while the Administrators obtain a clearer understanding of the current state of the business and actively pursue options to secure its future,” GAME advised customers when confirming the appointment of administrators.

“For further information, please contact GAME at customerrelations@game.com.au.”

Rumours of the chain’s imminent closure kicked up a notch over the weekend when consumers experienced issues placing orders on its website.

Staff in store also admitted to “issues” with securing stock for the launch of Diablo III this week, although it’s not clear if this is related to GAME’s struggles or a coincidental problem. GAME’s Facebook page advised those who pre-ordered in store to check with their local staff, while assuring customers that online orders would be honoured.

However, Polygon reports that pre-order customers have received SMS messages informing them that their orders will be cancelled without refund. Under Australian law, customers are considered creditors when a business goes into administration, and are not necessarily compensated.

The UK arm of GAME went into administration earlier of this year, triggering a wave of closures and lay-offs before its purchase by OpCapita; international operations were left to fend for themselves, with the Australian side reportedly making a bid for independence.

Staff fearful of cuts
Despite Pricewaterhouse Coopers’s assurances, a source close to GAME management has told VG247 that staff are right to be nervous, thanks to the chain’s recent history of financial struggle and redundancies.

In late 2010, a massive fire sale sparked rumours of imminent closures; our source said staff were falsely assured at the time that the sale was designed to clear warehouse stock, and unrelated to financial difficulties.

“This was a lie of course, GAME knew that it was going to cut stores and they plan it out before a fire sale begins. If they don’t meet their estimated forecast then they proceed with cutting the stores,” the source said.

Management of closed stores were allegedly advised that a bonus would be paid if closing sales targets were made, although none were paid, and staff who had been assured of new positions at remaining stores were later advised that no openings were available.

Our source said current staff are in the dark as to how their futures will play out and fear a repeat of the 2010 pattern – a fire sale followed by closures and lay-offs – and are right to do so.

“I’d expect to see roughly a third of stores getting closed at least. These are generally the stores that don’t do as well as the larger stores in terms of turning profit,” our source predicted.

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