GameStop Appoints Ryan Cohen as CEO and Chairman in Effort to Turn Around Ailing Retailer
September 28, 2022
GameStop announced on Thursday that billionaire Ryan Cohen will be taking on the roles of CEO and chairman of the struggling video game retailer. Cohen, who is already the company’s largest investor, aims to lead the turnaround of the brick-and-mortar retailer that has been grappling with the rise of online downloads.
Once a popular destination for gamers, GameStop has faced significant challenges in adapting to the digital age. The company was thrust into the spotlight in 2021 during a clash between hedge funds betting on its downfall and retail traders driving up its stock price. In response, Cohen joined the board and advocated for a shift to e-commerce.
Cohen rose to fame for his success in building up online pet products retailer Chewy, which he eventually sold for $3.5 billion in 2017. He became the executive chairman of GameStop in June after the ousting of former CEO Matt Furlong. However, the company announced that Cohen will give up his executive chairman title and will not receive any compensation for his new roles.
Cohen’s initial plans for a more online-focused model have been met with some setbacks, prompting a shift towards leveraging GameStop’s brick-and-mortar stores as pick-up locations for online orders. The company’s strategy appears to be paying off, as its recent quarterly earnings showed a smaller-than-expected loss and revenue that exceeded estimates, thanks to strong demand for video games, collectibles, and consoles.
While some analysts have expressed concerns about the slow pace of change at GameStop, as well as Cohen’s mixed record as an activist investor at other companies, such as Bed Bath & Beyond and Nordstrom, the appointment of the controlling shareholder signals the company’s struggle in attracting top executives.
“The appointment of the controlling shareholder reflects the difficulty GameStop has had in attracting executives,” said Wedbush analyst Michael Pachter. “We remain convinced that GameStop is doomed as declining physical software sales and a shift of sales to subscriptions and digital downloads seal its fate.”
Since Cohen joined the board, GameStop’s stock performance has been volatile, with shares losing more than 80% of their value since reaching a record high in 2021. On Thursday, the company’s shares were down 2%.
GameStop has also experienced several executive departures in recent years, including the departure of former Chief Operating Officer Jenna Owens in October 2021, just seven months after joining. Former finance chief Michael Recupero, who was hired alongside Furlong, was terminated last year.
GameStop’s appointment of Ryan Cohen as CEO and chairman is seen as a significant move in its efforts to revive the struggling retailer. Only time will tell if Cohen’s plans will be successful in navigating the challenges posed by the digital era and changing consumer preferences.
Reporting by Aditya Soni and Jaspreet Singh in Bengaluru; Editing by Arun Koyyur
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