Game stores in danger as Sports Direct launches £51.9m takeover bid
HIGH street video game store Game could be forced to close more shops under plans by Sports Direct, which just launched a £51.9 million takeover bid.
Game won’t be “able to weather the pressures that it is facing”, according to Sports Direct, and claim their takeover “will secure Game’s future.”
However, securing that future may mean job losses and store closures, according to Mike Ashley’s firm.
It’s been working with Game for some time already, and owned just under 30 per cent of the company before buying another ten per cent today, triggering the takeover bid.
If the bid succeeds than Sports Direct will launch an immediate review into Game’s business, with everything from location, size and lease terms for shops on the table.
Sports Direct already controls Debenhams, which was forced to close swathes of stores after trying to negotiate with landlords to change lease terms and lower rents.
50 stores are due to shut their doors, with the first 22 revealed in April.
Game’s sales dropped 4.7 per cent in the first half of the current financial year, but cost-cutting measures and Sports Direct’s assistance meant profits climbed 20.3 per cent to £14.8 million.
Since February last year, Sports Direct and Game have teamed up to create and promote an esports focused brand called Belong.
Belong-branded “arenas” can be found in stores, with esports-quality PCs set up for competitive gaming that customers can pay to use.
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“In particular, the review will focus on whether the existing Game sites should be consolidated with others in the Sports Direct Group, re-purposed or closed,” Sports Direct says, “including by looking to consolidate Game sites into Sports Directs and open Belong stations and arenas.”
The bid represents a 27 per cent premium over Game’s closing share price today.
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