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."

Re:Translate

[arse maker]

I think administration means the same thing. The company is no longer running its business. Someone else has been brought in to run things either to fix the problems or bring it into bankruptcy.

In most modern countries its illegal to trade while insolvent.

Re:Translate

[omglolbah]

Translates roughly into 'chapter 11' for the US.

http://en.wikipedia.org/wiki/Chapter_11,_Title_11,_United_States_Code [wikipedia.org]
http://en.wikipedia.org/wiki/Administration_(law)#United_Kingdom [wikipedia.org]

Re:Not competitive

[pecosdave]

I've been to a Gamestop here in the US, a used copy of a game was $14 and the new one was $12 in the same store and the clerks still tried to pursued me to buy used. They were unable to give a satisfactory reason beyond their profit margins are better (oh, and it's worth more customer loyalty points).

Re:Gak, the Britishisms in that article were too m

[DrXym]

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.

Re:Gak, the Britishisms in that article were too m

[donscarletti]

Sometimes Americans call administration "Chapter 11". This is different to bankruptcy, which is known as "Chapter 7". It's not really good international communication to use chapter numbers from a specific country's civil code, so they instead used the correct English words.

Re:Gak, the Britishisms in that article were too m

[Richard_at_work]

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.