GAME Retailer Faces Second Administration Threat as Frasers Group Subsidiary Files Notice
In a significant development for the UK retail sector, high street gaming retailer GAME has filed a notice of intention to appoint administrators, placing the company on the brink of collapse for the second time in its history. This legal move, facilitated through law firm RPC, signals that the retailer is preparing to enter administration and provides a temporary ten-day legal freeze that prevents creditors from taking immediate legal action against the company.
Historical Context and Previous Collapse
If GAME does proceed into administration, it would mark a repeat of the company's 2012 collapse, which resulted in the closure of 277 stores and the loss of over 2,000 jobs. Following that event, the retailer continued to face challenges, announcing plans in 2020 to shut 40 stores and reportedly closing another five branches in August of last year. The company's ownership changed hands in 2019 when it was purchased by Frasers Group as part of a £52 million deal.
Parent Company Profile and Financial Performance
Frasers Group, owned by prominent businessman Mike Ashley, oversees a diverse portfolio of brands including House of Fraser, Sports Direct, Evans Cycles, and Jack Wills. Despite the potential collapse of GAME, Frasers Group has reported some positive financial indicators in its latest results. For the six months ending October 26, the group achieved revenues totalling £2.6 billion, representing a 5% increase compared to the previous year.
This growth was primarily driven by rising sales at Sports Direct and the return to sales growth for luxury fashion brand Flannels. The company's premium luxury division experienced a 3.7% year-on-year increase in sales, while international sales soared by nearly 43% following strategic acquisitions including Holdsport in South Africa and XXL in the Nordic region.
Challenges and Executive Commentary
However, Frasers Group reported an adjusted pre-tax profit of £291 million for the half-year, reflecting a decrease of approximately 3% compared to the previous year. Chief Executive Michael Murray acknowledged the challenging market conditions, stating: "We've made a solid start to FY26 even though market conditions are tough, consumer confidence is very subdued and excess inventory continues to weigh on the industry, leading to increased promotional activity."
Murray added: "While we remain cautious into the second half, our focus is unwavering as we confront these challenges head on." The company's mixed financial performance highlights the broader difficulties facing the retail sector, particularly in the gaming and entertainment segments where consumer spending patterns have shifted significantly in recent years.
Broader Retail Sector Context
The potential collapse of GAME occurs against a backdrop of ongoing challenges in the UK retail landscape. In a separate development, Next recently agreed to pay £2.5 million for the brand and intellectual property of Russell & Bromley, along with £1.3 million for a portion of its current stock, following the luxury shoe chain's entry into administration. Notably, Next's acquisition included only three out of Russell & Bromley's 36 stores, specifically the Bluewater, Chelsea, and Mayfair locations.
Russell & Bromley, founded in 1880 by George Bromley and Elizabeth Russell in Eastbourne, currently employs more than 450 people and remains under the leadership of Andrew Bromley. This parallel situation underscores the persistent pressures facing traditional brick-and-mortar retailers as they navigate changing consumer behaviours and economic uncertainties.
The future of GAME now hangs in the balance as the ten-day protection period unfolds, with industry observers closely monitoring whether the retailer can secure a viable path forward or whether it will follow the fate of other high street casualties in an increasingly challenging retail environment.
