The news headlines have recently revealed that videogames retailer GAME – which operates 610 UK stores and a further 700 including 291 across Spain and Portugal – is in serious financial trouble and teetering on the edge of administration. GAME’s current stock value is close to zero and more than 10,000 jobs are at risk.
Should GAME go into administration, it will be the biggest UK-listed company to do so since Woolworths’ farewell to the high street back in November, 2008.
Due to doubts regarding GAME’s credit-worthiness, several games developers – including EA and Nintendo – have denied the retailer the right to stock popular titles such as Mass Effect 3, FIFA Street and The Last Story. GAME has stated that they have tried to work with these developers in order to strike “manageable credit terms” during this difficult period but many are refusing to comply, demanding upfront payment for the stocking of their games across GAME stores.
It would seem that GAME over extended its real estate since the retailer is now in talks with its banks as the date for its second – and potentially crippling – quarterly rental payment looms ever closer (March 25th).
But what does this mean for smaller businesses?
It should be obvious that keeping overheads for small business to an absolute minimum is important in the wake of customers spending less in these financially strained times, in order to prevent eventual collapse. Whilst GAME could (and probably will) close a number of its stores in order save some money, an equally wise move would be for the games retailer to begin running more of its behind-the-scenes operations – such as Customer Services and PR – from virtual offices.
Business operations from a virtual office can see companies save a significant amount of money. Those that select this option will not have to meet the costs of physical office space or a personal team of staff members, instead making use of remote receptionists and virtual assistants included in their virtual office package. It would also be wise for GAME to employ a telephone answering service (often included within virtual office deals) soon too, since the company is sure to receive an influx of calls from unhappy and/or confused customers and business partners should the brand announce its end.