GAME OVER?

[superfrank]

Game Group hit as some suppliers refuse to do business
http://www.bbc.co.uk/news/business-17336697

52 week high 62.00

price now 1.55

ouch.

'always thought this business was ultimately doomed in the internet age.

[Euler]

Been following this for a while as I used to know the CEO at the group. When she left I imagined that they may bottom during this economic & gaming cycle, but there seems to be no bottom!

Losing your credit insurance is pretty much the death knell for a company.

[superfrank]

600 stores in the UK... sooner or later there will be a bloodbath for commercial landlords in the retail sector.

[legendz]

Thats the problem , they sell games , so do every supermarket in the land and cheaper , and your all ready there doing your shopping. my preorder in november arrived 2 days late through yodel of all couriers , i bought it on the morning in sainsburys £7 cheaper , this was on the cards back then. I'll be very surprised if they find a buyer.

[Euler]

600 stores in the UK... sooner or later there will be a bloodbath for commercial landlords in the retail sector.

This is what I am looking at now, there is a massive problem on the high street. Yields for landlords must be well down at the moment and therefore commercial property must be suffering. Valuations must be toppy if retailers are in such a mess.

[Euler]

Thats the problem , they sell games , so do every supermarket in the land and cheaper , and your all ready there doing your shopping. my preorder in november arrived 2 days late through yodel of all couriers , i bought it on the morning in sainsburys £7 cheaper , this was on the cards back then. I'll be very surprised if they find a buyer.

I think there has also been a shift from hand held consoles to smartphones and tablets for certain games. Digital downloads are eating into the retail market as well.

[LeTiss]

This is what I am looking at now, there is a massive problem on the high street. Yields for landlords must be well down at the moment and therefore commercial property must be suffering. Valuations must be toppy if retailers are in such a mess.

I would love a glimpse into the future, and see what our high streets look like in 100 years!

The recession combined with technological changes and our lifestyle changes, has made retail almost impossible to succeed in.
Apart from dodgy payday loan companies, I can't think of one section of retail that's still thriving

[superfrank]

This is what I am looking at now, there is a massive problem on the high street. Yields for landlords must be well down at the moment and therefore commercial property must be suffering. Valuations must be toppy if retailers are in such a mess.

I think there is a lot of denial going on amongst landlords - it seems many would rather have empty properties rather than drop rents (extend and pretend for the purposes of their accounts i suspect), but cash flow will dictate that something will give eventually.

[JollyGreen]

I just feel sorry for the poor souls who may end up being made redundant!

[Iron]

Aren't the likes of Tesco and Asda still doing well?

Jeff

Apart from dodgy payday loan companies, I can't think of one section of retail that's still thriving

[Iron]

Let's say you're a landlord. Shop A says he can't afford his rent, and asks for a reduction (saying it's either that or he shuts down). You could lower his rent. But you have 20 other customers who pay the same rent as him, and if you lower his rent then word may get out, in which case your other customers may start complaining and threatening to leave if they don't get the same reduction.

That type of situation may also be part of the reason why the landlords don't accept lower rents.

Jeff

I think there is a lot of denial going on amongst landlords - it seems many would rather have empty properties rather than drop rents (extend and pretend for the purposes of their accounts i suspect), but cash flow will dictate that something will give eventually.

[CaerMyrddin]

Many may have heavy mortgages to pay to the bank, so they can't lower the rent...

[Iron]

Perhaps their thinking is along the following lines:

'I can hold out for the rent I ideally want, in which case the property will probably remain vacant, for at least the next 12 months. Or I can accept 75% of the rent I'm seeking. If I do that, then I won't be able to make the payments the bank are demanding, but the bank will probably be willing to accept a reduced payment (given that they'd take a haircut if they were to foreclose on me). But do I really want to end up a bit like Greece, ie handing over most of my income to bankers, whilst falling deeper and deeper into debt, with no end to the situation in sight for years and years?'.

In that instance, bankrupsy might be the lesser of two evils, so I might hold out for the rent I ideally wanted, and take my chances with the possibility of foreclosure...

Jeff

Many may have heavy mortgages to pay to the bank, so they can't lower the rent...

[superfrank]

Many may have heavy mortgages to pay to the bank, so they can't lower the rent...

yeah that's closer to the real reason. they can't accept lower rent as that would mean that the book value of the property would have to be lowered meaning that the loan may be underwater. the banks are happy to turn a blind eye (atm) because the last thing they need is more bad loans, so they won't do anything until the payments stop coming in.
it's called extend and pretend, i.e. the banks just extend the loans and pretend everything is ok.

yeah jeff, a bit like Greece. just keep shoveling bailout money at them to keep the day of reckoning at bay.

[Groovyelms]

I believe the super markets do well as strangely "everybody has to eat" and they have bolted on everything else as the punters are captive, A familly arrives in the car at the high street and there is no where to park! Go to asda/super/extra mart, 24hrs a day park easily buy it all go home... that is what I believe the high street is up against.

I joked with some friends recently that I thought the uk would eventually become a museam, with chinese tourists looking on and all the real problems of a declining country kept out of view. Some of those apocryphal films of amageddon may well come to pass..

groovy