Struggling UK-based video game retailer Game Group is talking with lenders about its credit issues, and is "reviewing a strategic plan" for its overseas operations that could see the company selling off more than half of its locations.
Following what it called
"an incredibly tough 2011" and warnings that it could breach its loan terms, Game Group has been at the center of reports this week alleging that the retailer
won't be able to stock many upcoming titles due to losing credit assurance with partner publishers.
The company has denied those allegations, but Game Group admitted in a statement today that it is in an "on-going dialogue with its lending syndicate to reach agreement on revised terms for its facilities."
"As part of these discussions, the lending syndicate is reviewing a strategic plan of the company which includes a review of its overseas operations," the statement continued. "A further announcement will be provided once discussions with its lending syndicate have concluded."
As of early January, those overseas operations accounted for 664 locations (out of the company's 1,274 total shops) spread out across France, Iberia (Spain, Portugal), Scandinavia, the Czech Republic, and Australia.
In a Gamasutra-attended earnings call on Tuesday, Electronic Arts CEO John Riccitiello was likely referring to Game Group when he pointed out that the troubles of an unnamed retailer was affecting its guidance for the current fiscal quarter (ending March 31, 2012).
"We are concerned with the financial condition of one of our major European retail partners, which could lead to both increased bad debt and lost sales," said Riccitiello while naming the notable factors that led to the publisher's "conservative outlook" for its fourth quarter.
Game Group has already announced that it intends to shutter 60 shops in the UK by 2013 to cut its operating costs -- even more than than the 39 stores it closed last year.