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Ryan Cohen from an appearance on CNBC.
CNBC
Jim Stop fire its chief executive officer Matthew Furlong and appoint its chairman Ryan Cohen as chief executive officer, effective immediately, and the company said Wednesday.
GameStop shares fell more than 20% in extended trading after the video game retailer announced the termination. It released the news the same day it reported lower revenue and narrower losses in the first quarter of the fiscal year compared to the same period last year.
The company did not provide a reason for the dismissal but noted the change in its quarterly securities filing.
“We believe that combining these efforts to stabilize and improve our core business and achieve sustainable profitability while also focusing on capital allocation under Mr. Cohen’s leadership will result in increased long-term value creation for our shareholders,” the file says.
Cohen acquired a stake in GameStop in 2020, and in January 2021, he and two former Chewy executives were named to the retailer’s board of directors as part of an agreement with company management. His investment company, RC Ventures, currently owns 11.9% of GameStop stock, according to filings.
In a separate securities filing, GameStop disclosed Furlong’s firing on Monday and said he would be allowed to receive payments and benefits “associated with termination without cause.” Furlong also resigned from the company’s board of directors that same day, reducing it to just five members.
The statement indicated that Cohen will be responsible for allocating capital, evaluating potential investments and acquisitions, and supervising GameStop’s property managers.
in Hidden tweet About half an hour after Furlong’s shooting was announced, Cohen wrote, “Not for long.”
activist investor and chewy The founder is known for saying very little in public and making vague statements online.
The decision to split from Furlong comes just months after GameStop reported its first quarterly profit in two years while he was at the helm of the company.
A GameStop store operates at a mall on March 16, 2023 in Chicago, Illinois.
Scott Olson | Getty Images
As part of the leadership shakeup, Alain Attal, former CEO of Chewy and current board member of GameStop, has been named independent lead director of the board, according to the filing.
GameStop general counsel Mark Robinson has been named general manager of the retailer and chief executive officer. His duties will include “administrative matters, corporate development, legal affairs, and support for the GameStop holdings, including supervision of other executives besides (Cohen),” according to the filing.
Robinson will report directly to Cohen and will continue to serve as General Counsel and Secretary for GameStop.
Furlong was appointed CEO of GameStop in June 2021 when the company was in the early stages of a turnaround plan. The former Amazon CEO was hired as GameStop was transitioning from a longtime established retailer to an online gamer with the ability to compete with rivals like Walmart, Sony and Microsoft.
Prior to taking on his role as CEO of GameStop, which lasted about two years, Furlong spent nearly nine years at Amazon, and most recently led the growth of its business in Australia. Prior to that, he served as a technical advisor to the President of Amazon Consumer North America and worked for Procter & Gamble.
Furlong could not be reached for comment.
This announcement coincided with GameStop’s first-quarter earnings announcement. In the three months ending April 29, GameStop reported revenue of $1.24 billion, down from $1.38 billion in the year-ago period. Its net loss narrowed to $50.5 million, or 17 cents per share, from $157.9 million, or 52 cents per share, a year ago.
Sales in the United States, Canada, and Australia were down 16.4%, 18.5%, and 8.9%, respectively, compared to the same period a year earlier, while sales in Europe increased 26.2% year-over-year, according to GameStop’s quarterly filing.
The company attributed the drop in sales to currency fluctuations, fewer launches of critical game titles and light sales in pre-owned software, hardware, and collectibles. In the collectibles category, where GameStop has the potential to drive long-term growth, sales fell to $173 million, compared to $220.9 million in the year-ago period.
The company incurred $14.5 million in transition costs related to restructuring efforts in Europe. She indicated that she will take more transition fees in the current quarter.
GameStop has improved its margins by cutting costs significantly. Administrative, general and selling expenses were $345.7 million for the quarter, down from $452.2 million in the same period last year.
In a press release, the company said it will not hold a conference call to discuss the quarter’s earnings.
Read the full earnings release here.
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