Sports Direct in take-over bid for GAME, may close stores

Sports Direct has been a partner and shareholder in GAME for quite a while now and has just increased it’s share to 38.49%. This means it is now required to make an offer for the rest of the business and take over control.

However, the company does not think that GAME can stay afloat for much longer in it’s current state and will “work with the existing management to review the GAME business, including areas such as the location, size and lease terms of GAME’s shops, its headquarters and distribution centre, plus its product and services mix.”

They have also said they may consolidate the GAME stores, which means they many be closed completely or merge them in to a nearby Sports Direct or House of Fraser store. Unfortunately for GAME store employees that makes a lot of business sense, Sports Direct stores have a high footfall and giving GAME a small corner of their huge stores rather than running their own shops will save a lot of money. House of Fraser is a less enticing idea, middle aged ladies shopping for clothes and make up aren’t a key gaming demographic, unlike the younger people who go to Sports Direct.

If Sports Direct are successful in their take-over bid  a review of all GAME stores will occur within a year “and could result in the closure of GAME stores and redundancies for GAME staff.” However, the deal will also see an accelerated roll out of GAME’s Belong esports business and gaming arenas, or which Sports Direct already own 50%.

GAME has had a troubled history, just a few years ago it looked like the entire company was going to go under and trading of shares was suspended. Many publishers stopped supplying the chain with products and on March 26th 2012 the company went in to administration, only to purchased a week later by investment group, Opcapita. Since then Mike Ashley’s Sports Direct has gradually purchased shares leading to today’s take-over bid.

Source: GI.Biz