STAFF at two shops in South Tyneside have lost their jobs after Britain’s biggest video game retailer went into administration.
Workers at the Game stores in King Street, South Shields, and the Viking Precinct, Jarrow, were told yesterday afternoon that their shops were closing along with 275 others across the UK.
The Game Group called in administrators after it was unable to meet a £21m second-quarter rental payment due on Sunday.
The King Street store was closed this morning, with customers being directed to the firm’s Newcastle shop.
All gift cards have also been suspended, meaning customers will not be able to use them to buy goods and no cash exchanges will be offered.
Experts at accountants PricewaterhouseCoopers said the firm, which will keep 333 stores open, had suffered from high fixed costs, an ambitious international expansion and online competition.
Mike Jervis, administrator, said: “Our priority is to continue trading the business as normal while we continue to pursue a sale.
“The job losses are regrettable, but will place the company in a stronger position while we explore opportunities to conclude a sale.
“My team and I will be doing all we can to help the affected employees at this difficult time.”
The group employs 5,100 staff in its stores and 385 at its headquarters in Basingstoke in Hampshire.
Another 5,000 are employed in France, Spain, Portugal, Czech Republic, Scandinavia and Australia.
A spokesman for Game said: “This decision is taken after careful consideration and ceaseless interrogation of every possible alternative,”
The stores operate under the Game brand, as well as Gamestation.
The company asked for its shares to be suspended last Wednesday, and announced it was planning to call in administrators.
That came after confirmation that some suppliers had stopped doing business with Game.
Reacting to the news the Game store in Jarrow is to close, Coun Tom Hanson said: “This looks like another victim of the recession.
“It is sad another store is to close in an area of high unemployment such as Jarrow, sparking redundancies, when we need as many jobs as possible.”
The Gazette was today unable to contact anyone at the Jarrow store.