Game pursues potential to take French market

Following a presentation to brokers on Monday, Singer Capital Markets analyst Matthew McEachran forecast that Game’s French division could account for as much as 30 per cent of EBITDA next year compared with 20 per cent last year.

At present the UK-based store group has 9 to 10 per cent market share in France. This leaves it trailing French hypermarkets, which control about 45 per cent of the market, and specialist Micromania, which Game’s US rival Gamestop bought for US$700 million (£468 million) last month.

McEachran believes it would be “credible” for Game to become the market leader in France. He said: “The French market is growing. Game’s product margins are growing, its cost structure looks settled and its store base is well established. France is well placed to deliver strong profit growth for Game, irrespective of the gaming cycle.”

However, he conceded that Game has a “long way to go” in France, where just 8.3 million households own third-generation hardware gaming consoles compared with 12.7 million in the UK.

Pali International retail analyst Nick Bubb said: “France has been strong for Game and should remain strong. It seems a well-managed operation and should be able to achieve growth.”

Last year Game’s French arm achieved EBITDA of£6.7 million through 177 stores. In the past few years Game has acquired French gaming chain Addon and bought 50 shops from bookseller Maxi Livres. Game operates in eight countries outside the UK.

The retailer declined to comment further because it is in a closed period.