CEO resigns after Game announce 28% fall in profits
Lisa Morgan has stepped down from her position as CEO at GAME. Her announcement came shortly after announcing a 28% fall in profits over the past year. Morgan had been with the company since 1996 and became CEO in 2006. Chris Bell, a former Ladbrokes CEO, will be taking the job on a temporary basis.
It’s been a difficult trading year for the UK retailer with total company profits falling from £117.4m to £84.2m for the year to the end of March 2010. Headline revenues are also down by 10 per cent to £1.8 billion and EPS has fell by 28 per cent to 17.45p.
The company blame the massive fall in profits on a wider slowdown on game sales, and cited an overall industry decline by 20%.
Despite the poor trading performance, GAME still managed to see rays of sunshine; they say that these are the “second best trading performance in its history.” They also reiterated their belief that they are the leading UK video game retailer:
“We outperformed the market and our performance can be attributed to our position as the market leading specialist, our strength in pre-owned, our multi-channel customer offer and disciplined operational management.
Complementing our traditional store offer, we are today announcing the launch of a number of initiatives to strengthen our position in the growing e-commerce and digital markets.
Whilst we remain mindful of the challenging market in which we operate, the forthcoming new technology further enhances the profile of the specialist retailer. This, together with our value driven offer to maintain a market leading position, investment in new channels to market, and our focus on cost reductions leads the Board to be confident in the Group’s future prospects.”
GAME are struggling to stay competitive as more and more people are going elsewhere for their gaming needs. Games can easily be found at online retailers such as Amazon and Play for considerably less than what GAME can offer. The supermarkets, and their aggressive pricing strategies, also pose a massive threat to the high street retailer.
There has also been a significant rise in games being distributed digitally through the likes of Steam, Xbox Live and the PSN. This trend is certain to rise significantly over the next few years.
Expect to see a greater push from GAME to drive sales on their online store in an attempt to stay competitive, but it’s hard to see where the company goes from here.