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Trading in Game Group shares suspended; directors say no equity value left
LONDON (AP) ' Game Group, the troubled retailer of electronic games and player platforms, suspended trading in its shares Wednesday after key suppliers withdrew support from the company, which has suffered from stiff competition from online retailers, such as Amazon.
Game Group shares closed at 2.39 pence Tuesday on the London Stock Exchange, having fallen from 62 pence a year ago as the company struggled to convince its suppliers it had a future at a time when more and more purchases are being done online.
Following discussions with lenders and a potential third party financier, Game said "the board now considers itself to be unable to assess the business's financial position, and is of the opinion that there is no equity value left in the group."
Game announced last month that Electronic Arts Ltd. had refused to supply the company with Mass Effect 3, expected to be a big-selling game.
Last week, Game said it was talking to suppliers and lenders in pursuit of agreements which would allow the business to continue. It said it was unable to get stock from a number of suppliers.
In the eight weeks to Jan. 7, covering the key Christmas period, Game's sales in stores which were open at least a year were down more than 15 percent in Britain and down nearly that much in its other European shops.
In the six months ending July 31, Game reported a net loss of 37.2 million pounds ($59.1 million) on revenue of 559 million pounds. A year earlier, Game's net loss was 15.4 million pounds.
Game, based in Basingstoke, England, has 1,300 stores trading under the Game and Gamestation brands.