Troubled Game Group saved by OpCapita

London: The British assets of Game Group are to be bought out of administration by OpCapita, the private investment firm, in a deal that will safeguard almost 3,200 jobs at the troubled video retailer.

PwC, which was appointed last week as administrator, and OpCapita have reached an agreement under which the private investment firm will buy all 333 of the Game Group stores that remained open during the period of administration, and provide the group with the capital it needs to trade on a normalised basis. David Hamid, operating partner at OpCapita and former chief executive of Halfords, will be appointed Game Group's executive chairman.

Henry Jackson, managing partner of OpCapita, which specialises in operational turnarounds, said he was "pleased" that an agreement had been reached.

"We strongly believe there is a place on the high street for a video gaming specialist and Game is the leading brand in a £2.8 billion (Dh16.4 billion) market in the United Kingdom. We have assembled a strong team of experienced industry operators to implement the programme of operational change that is needed," Jackson said.

"There is a huge amount to do but we look forward to the challenge of restoring Game's fortunes in partnership with its employees and suppliers," he said.

Private equity buyouts

The rescue of Game Group, the biggest retail casualty since Woolworths in 2008, follows a rising tide of private equity buyouts out of insolvency.

According to new data from CMBOR, 12 such buyouts took place in the first quarter of this year, double the number recorded in the final quarter last year, and the highest figure since the second quarter of 2009, when there were also 12.

Game Group went into administration on March 26, after it was unable to pay a £21 million quarterly rent bill, resulting in the immediate closure of 277 of its 610 UK stores and just over 2,000 job losses.

OpCapita said on Sunday that it had no plans for further store closures or redundancies, and that a small number of senior staff from Game Group's head office who were made redundant last week would be re-employed.

— Financial Times