Game Crazy Facing Financial Woes
Movie Gallery, the parent company of Hollywood Video and Game Crazy, is having severe financial difficulties after a terrible second quarter and mounting debt from the financing to purchase the video rental and video game chain.
Losses for the second quarter were valued at a net loss of $9.69 per share vs. a net loss of $0.47 per share a year ago. The company also in negotiations to extend its forbearance agreement, which expired on August 14th. Currently the company only has $45.5 million in cash and cash equivalents and it has been forced by several venders to start paying cash up front for shipments of goods and merchandise.
This is not looking all that good for fans of Game Crazy, because unless they can get financing, they may be forced into bankruptcy or possibly just have to liquidate all assets. I would not look to buy an MVP membership from Game Crazy any time soon.
Read all the numbers at Reuters
Tags: bankruptcy, financials, game crazy, used games
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Personally, I’ve only purchased one thing from Game Crazy: the official wireless Guitar Hero guitar. I’ve gone there for other items and they didn’t have it in stock (nor did the big chains). It’s nice having a store right down the road, but with their cost being >= big chains, it just didn’t make sense financially to purchase from them. That’s probably what is the root cause of their situation. Trying to compete against EBGames, Gamestop, or Best Buy w/o a niche is pretty much like deciding to go swimming with cement shoes.