The game’s up for Game Group – but who’s next?

Video games retailer Game Group has become the latest high street casualty, as consumers change the way they shop. But how can you tell which retailers are likely to follow? Phil Oakley explains.

Video game retailer Game Group has called in the administrators. Sadly, it looks as though the company is finished, as a potential takeover bid has apparently been blocked by lenders. On Wednesday morning, the shares were suspended as Game's board announced that it was "unable to assess the business's financial position, and is of the opinion that there is no equity value left in the group.

Just like Woolworths, Game was a victim of changing high street economics. And retail is a tough business all over right now.

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Operating profit (A)43.22.228.418.2
Lease expense (B)87.685.3163.520.9
Profit before leases (A+B=C)130.887.5191.939.1
Interest (D)5.724.84.8
Fixed charges (B+D)=E93.387.3168.325.7
Fixed-charge cover (x)=C/E1.401.001.141.52
Swipe to scroll horizontally
Operating profit (A)32.9598.73,334
Lease expense (B)68.2204.51,064
Profit before leases (A+B=C)101.1803.24,448
Interest (D)0.628.9465
Fixed charges (B+D)=E68.8233.41,529
Fixed-charge cover (x)=C/E1.473.442.91

Phil spent 13 years as an investment analyst for both stockbroking and fund management companies.

 

After graduating with a MSc in International Banking, Economics & Finance from Liverpool Business School in 1996, Phil went to work for BWD Rensburg, a Liverpool based investment manager. In 2001, he joined ABN AMRO as a transport analyst. After a brief spell as a food retail analyst, he spent five years with ABN's very successful UK Smaller Companies team where he covered engineering, transport and support services stocks.

 

In 2007, Phil joined Halbis Capital Management as a European equities analyst. He began writing for MoneyWeek in 2010.