Game has announced that in the 8 weeks leading up to January 7, they took a significant hit, with 14.7% less in total sales (12.9% in like for like sales) than they made in the same period last year.
For the 49 weeks leading up to January 7, sales fell to a disappointing, but not unexpected 11.9% (10% in like for like sales).
The groups online branch registered an increase in profit, and is a clear indication of which way the market is heading, but it was not enough to gloss over the seriousness of the situation the retailer now finds itself in. High street takings have been down both at home and abroad, with stores in the UK and Eire most badly affected (17.6% down in the 8 weeks leading to January 7 - 15.2% in like for like sales).
The company warned that when tested on February 27, they may fall short of meeting their EBITDA covenants (earnings before interest, taxes, depreciation and amortization). Were this to happen, GAME would then have to rely on the goodwill of investors, possibly having to resort to loans to continue operations.
A statement released this morning states that the GAME Group PLC: "continues to be in regular and constructive dialogue with its lenders, who remain supportive."
GAME remain confident that they can turn it around in 2012. Though for their recovery they are relying on being the market leader for the releases of both the Sony VITA and the Wii U.
Ian Shepherd, GAME CEO said: "Our industry had an incredibly tough 2011, and so did we. We remain the market leader and have a clear strategy which will return the business to growth. We are adapting to the changing market and are well prepared for the next hardware cycle."
Game shut down 39 stores in 2011, and is on target to reduce its presence on the UK high street to 550 stores by 2013. Whether these closures (as well as other attempts to bring down operating costs) are enough to keep the majority of GAME stores open remains to be seen, but 2012 is undoubtedly a make or break year for popular high street retailer.