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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2010/12/game-discounts-will-hit-margins.jpg"><img class="alignnone size-full" title="Game Group has warned profit margins would be hit as it runs more promotions" src="http://londonglossy.com/wp-content/uploads/2010/12/min-game-discounts-will-hit-margins.jpg" alt="Game Group has warned profit margins would be hit as it runs more promotions"/></a></p>
<p>Video games and consoles retailer Game Group has warned profit margins will be hit as it runs more promotions to reverse falling sales.</p>
<p>But the company said it was encouraged by an improved performance in recent weeks, helped by record-breaking sales of new game releases Call of Duty: Black Ops and FIFA 11.</p>
<p>Like-for-like sales in the UK and Ireland were down 7.6% in the 18 weeks to December 4, compared with a 16.2% decline in the first half.</p>
<p>Game, which has 641 stores in the UK and Ireland, said sales of second-hand games and consoles were on the rise and will make up 25% of its turnover this year, against 21% the previous year.</p>
<p>The group&#8217;s recent sales improvement comes after a difficult first half saw it report underlying pre-tax losses £18.8 million in the six months to July 31, compared with profits of £14.5 million a year earlier.</p>
<p>However, shares in the firm have dropped 6% after its gloomy news on profit margins.</p>
<p>Game is stepping up promotions as it fights to maintain its position as market leader in the face of fierce competition from supermarkets, some of which recently moved into selling pre-owned games.</p>
<p>Its recovery plan under new boss Ian Shepherd centres around offering consumers better value for money through pre-owned products, exclusive promotions for its loyalty card holders and trade-in deals.</p>
<p>Mr Shepherd, a former Vodafone retail boss, was hired in June to help revive Game&#8217;s fortunes after former-chief executive Lisa Morgan and chief operating officer Terry Scicluna stepped down.</p>
<p>Game is restructuring its UK and Ireland store base, where it trades as Game and Gamestation. It has already shut 42 outlets and concessions since April and plans to axe another 85 to leave it with 550 outlets by Christmas 2013.</p>
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