Electronics Boutique's interim results have been hit by the poor performance and integration costs of its GBP99.2m acquisition of former rival Game.
The Game takeover (PC Dealer, 14 April) and the subsequent costs of integrating the chains and updating Game's distribution methods was a contributing factor in denting the high street retailer's six-month figures, ended 31 July.
Electronics Boutique (EB) reported a pre-tax loss of GBP3.3m, from profit of GBP1.5m for the same period last year. Its turnover increased 19.3 per cent to GBP63.8m.
Apart from price erosion on the Playstation, the blame for the dive into the red was firmly placed at the door of the Game chain by Peter Lewis, chairman of EB.
He blamed the "integration of Game, which grew rapidly from 65 to 92 stores in the preceding 12 months, without the necessary investment in infrastructure."
"A great deal of effort has been put into ensuring that these weaknesses are rectified," he said.
But Lewis was upbeat about the prospect for the Christmas period: "The company has left behind the inevitable disruption to performance and morale. This half has been significant for EB in consolidating its position.
"The integration of Game is ahead of schedule and the Christmas period looks to be the biggest ever, given the timely launch of the Dreamcast," he said.
But the problems faced by the high street chain are still apparent from the first 11 weeks of the second quarter, ended 17 October.
Like-for-like sales in EB were up one per cent, but Game's sales were down 20 per cent. Websites for both EB and Game will relaunch in November.
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