Slashdot Mirror
UK's Largest Specialist Video Games Retailer Enters Administration
RogueyWon writes "The GAME Group, owners of high street chains GAME and Gamestation, which between them account for a large majority of the UK's specialist games retail market, have entered into administration. In the hours following the Group's entry into administration, hundreds of stores were closed and thousands of staff made redundant. While some of the factors behind the Group's downfall, such as stores located too close to each other and overly-ambitious international expansion, were likely unique to the UK-based company, other factors, such as price competition from supermarkets and online retailers, as well as a reliance on a fickle pre-owned games market, may have wider application."
Doesn't surprise me, for a variety of reasons.
As mentioned in TFS, they were crazy when it came to sotre placement. In my town, there were two GAME stores and one Gamestation all on the same shopping high street. There used to be a third GAME in a department store two minutes walk away, and there was briefly a fourth GAME directly opposite one of the current two. They all stocked exactly the same thing, with no great specialisation. What on earth did they think they were trying to acheve?
Another reason- failure to move into the online space themselves. They do do online retailing these days, but they compare poorly to the likes of Amazon. When you're sat at your keyboard, and you open two websites, and one has a betteer range and is cheaper than the other, why would you use the latter? Instead of capitalising on their huge brand presence, they just let themselves slip. their digital download service isn't even run by them- it's just a rebadge of a whole different company's website.
A bigger reason, though, was just that they weren't pleasant places to be. They're competing against souless supermarkets and anonymous online mail-order companies. So what was their solution? Become as souless and supermarket-like as possible. Cram in as many shelves as possible, with no aisle space, no demo machines, no nice displays. Gaming is obviously a hobby which a lot of people take quite seriously, but instead of trying to tap into that sense of a hobbyist community, and trying to become a hub for that (lucrative) community, they just focussed on selling as many things as possible as efficiently as possible- something they couldn't hope to win on, against their competition. Compare and contrast with Games Workshop (seller of tabletop games and models); gangs of enthusiastic hobbyists hang around in there for hours at a time, playing games against each other, organising competitions, soaking up the atmosphere. You can buy Games Workshop models cheaper online or through some of the resellers- but the flagship shop is the place to be, and so is where most people buy their stuff from.
On the window of a Game store in Ireland: http://i.imgur.com/BQ8iD.jpg
Video Game Retailer Modded "Redundant -1"
Anons need not reply. Questions end with a question mark.
In the UK firms can't go bankrupt, they go into administration, i.e. an administrator is appointed to either wind it down, or find someone to buy it, or keep it running as a going concern. GAME is still a going concern, albeit massively downsized. It might ultimately be wound up or it may be that it carries on existing in some reduced form. Closing a bunch of stores was inevitable in any event.
I'm British. The terms "entered administration" and "made redundant" are in normal everyday use in Britain. I think it is reasonable to assume that the writer is British and that it would never have occurred to him that these phrases would be misunderstood by an American. I'm sure it wasn't done just to wind you up*. * I'm not sure if the phrase "wind you up" is used in the US. It means to say something with the intent to provoke.
Chapter 11 is significantly less harsh on th business than British Administration - in CH11, a companies board can survive the ordeal, while under Administration they instantly lose everything and leave the business.
In the US, CH11 is used strategically, for example see American Airlines - they waited until they had secured a $8Billion war chest before entering chapter 11, even buying $200Billion of aircraft in the run up to the declaration. Entering chapter 11 allows them to do things like break lease agreements (they had 50 or so aircraft sitting mothballed in the desert because they had reached the end of their useful life, but continuing to pay the leases was cheaper than paying the costs associated with returning the aircraft - but in chapter 11 one of the first things they did was just hand the aircraft back in an unflyable state...).
Chapter 11 is a business tool, while administration in the UK is a severe punishment. Huge difference in aspect.