When OpCapita bought UK gaming retailer GAME out of administration in 2012, the company had lost the confidence of its suppliers and customers and was days away from liquidation (the firm also acquired the profitable Spanish business simultaneously). Following the deal, OpCapita worked quickly to appoint a new CEO, stabilise the business by restoring customer, staff and supplier trust and launch a new strategy to place GAME at the centre of growing demand for pre-owned games and the trend for digital migration.
The firm orchestrated annual cost savings of approximately £10m by restructuring the head office and renegotiating leases, while also making significant investments in new senior hires, rebranding and the creation of a new digital platform. Restored to profitability, the company floated on the London Stock Exchange in 2014 and was valued at over £430m in August 2015.
The strength of the turnaround delivered at GAME was a testament to the dedication, expertise and operational management skills of OpCapita’s team, who deeply embedded themselves in the business from the outset.
Martyn Gibbs CEO, GAME Digital
What did the business need?
- A turnaround plan to win back trust of customers, suppliers and staff
- Investment to bring the retailer into the digital era
- Cultural change to focus on cash management
How did private equity backing create lasting value?
- Hired experienced management team, including new CEO and CFO
- Re-established relationships with key suppliers in just 7 days and renegotiated supply arrangements
- Achieved £10m cost savings from head office restructuring; re-invested cash to revitalise stores
- Renegotiated store leases to save over £3.2m annually, plus £7.3m in rent-free periods
- Repositioned the business to focus on the growing pre-owned category; launched digital platform
What outcomes did private equity investment achieve?
- Transformed a loss-making business into one making £51m profit
- Revitalised an ailing brand to make it a FTSE 250 company
- Saved circa 4,300 jobs and created approximately 400 jobs
- Increased the number of reward card customers by 3m to 19m