Game to offload overseas operations

The retailer, which has 670 international stores compared with 615 in the UK, is understood to have hired Rothschild to seek a buyer for all or parts of its loss-making overseas business.

Game has shops in France, Sweden, Norway, Denmark, the Czech Republic and Australia, but makes half its overseas revenues from its Iberia territory - Portugal and most importantly Spain.

Game generated sales of £595m from its overseas business in the year to January 31, 2011, while reporting an operating loss at the division £15.7m. The retailer turned over £1.63bn at group level last year.

It is unclear which parts of its overseas business are up for sale, although sources told Retail Week that it is likely the retailer will aim to sell all territories, either piecemeal or in one deal.

One analyst told Retail Week that the objective was sensible, and would buy the retailer time until the games market improved.

Likely buyers of the business are not obvious however. Game’s main global rival, Gamestop, is pulling out of some of its overseas markets, including the UK, where it will retain an online presence only.

Game’s like-for-like sales in the UK and Ireland slumped 15.2% in the eight weeks to January 7, and the retailer warned it may not meet its EBITDA covenants, which are tested on February 27.

The poor Christmas performance came on top of a first-half loss before non-recurring costs and tax of £48.5m in the six months to July 31 2011, compared with a £18.8m loss in the same period the previous year.

Game declined to comment.