GameStop fires CEO and appoints Ryan Cohen as executive chairman

GameStop fired its CEO, Matthew Furlong, and appointed its chairman, Ryan Cohen, as executive chairman, effective immediately the company said on Wednesday.

GameStop’s shares fell more than 20% in extended trading after the video game retailer announced the cancellation. The company broke the news on the same day it reported a decline in revenue and a reduction in loss in the fiscal first quarter compared to the same period last year.

The company did not give a reason for the layoff, but did cite the change in its quarterly securities statements.

“We believe the combination of these efforts to stabilize and optimize our core business and deliver sustainable profitability while focusing on capital allocation under Mr. Cohen’s leadership will enable continued long-term value creation for our shareholders,” the filing reads.

Cohen acquired a stake in GameStop in 2020, and in January 2021, he and two other former Chewy executives were named to the retailer’s board of directors under an agreement with company management. According to the filings, his investment firm RC Ventures currently owns an 11.9% stake in GameStop.

In another securities statement, GameStop announced that Furlong was fired Monday and said he was allowed payments and benefits “related to termination without reason.” On the same day, Furlong also resigned from the company’s board of directors, reducing it to just five members.

The filing states that Cohen will be responsible for allocating capital, evaluating potential investments and acquisitions, and overseeing managers of GameStop’s holdings.

in one cryptic tweet Cohen wrote about half an hour after Furlong’s firing was announced, “Not for long.”

The activist investor and Tough The founder is known for hardly speaking publicly and for making vague statements on the Internet.

The decision to divest Furlong comes just months after GameStop, which he led, reported its first quarterly profit in two years.

As part of the leadership change, Alain Attal, a former Chewy executive and current GameStop board member, was appointed as the board’s senior independent director, the filing said.

GameStop General Counsel Mark Robinson has been appointed as the retailer’s general manager and chief executive officer. His responsibilities include “administrative affairs, corporate development, legal affairs and the support of GameStop’s holdings, including oversight of other officers.” [Cohen]it says in the file.

Robinson will report directly to Cohen and will continue to serve as GameStop’s general counsel and secretary.

Furlong was named CEO of GameStop in June 2021 when the company was in the early stages of a turnaround plan. The former Amazon exec was appointed as GameStop transitioned from a longtime brick-and-mortar retailer to an online player able to compete with rivals like Walmart, Sony and Microsoft.

Prior to his tenure as GameStop’s CEO, which lasted approximately two years, Furlong spent nearly nine years at Amazon, most recently leading the growth of its Australian business. Previously, he served as technical advisor to the head of Amazon’s North American consumer business and worked for Procter & Gamble.

Furlong could not be immediately reached for comment.

The announcement coincided with the release of GameStop’s fiscal first quarter results. For the three months ended April 29, GameStop reported revenue of $1.24 billion, compared to $1.38 billion in the same period last year. It reported a net loss of $50.5 million, or a loss of 17 cents a share, compared to a loss of $157.9 million, or 52 cents a share, a year earlier.

According to GameStop’s quarterly filing, sales in the U.S., Canada, and Australia fell 16.4%, 18.5%, and 8.9% year over year, respectively, while revenue in Europe fell 26% compared to the same period last year. 2% up.

The company attributed the decline in sales to currency fluctuations, less significant launches of gaming titles and weak sales of used software, hardware and collectibles. In the collectibles category, where GameStop has the ability to drive long-term growth, revenue fell to $173 million compared to $220.9 million in the same period last year.

The company incurred $14.5 million in transition costs related to its restructuring efforts in Europe. It has been noted that further transition fees will be incurred in the current quarter.

GameStop has improved its margins by cutting costs drastically. Selling, general and administrative 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 would not hold a conference call to discuss quarterly results.

Read the full winning announcement Here.