GameStop plans to fire its CEO, Reuters reports:
GameStop Corp is looking for a new chief executive to replace George Sherman as it pivots from a brick-and-mortar video game retailer to an e-commerce firm, three people familiar with the matter said on Monday.
It would be the biggest shakeup at GameStop since Ryan Cohen, the co-founder and former chief executive of online pet food company Chewy Inc, joined its board in January and began laying the groundwork for a shift in culture and strategy, people familiar with his work at GameStop said.
Numerous top executives have already left, likely under pressure from Cohen:
The CEO replacement is the latest in a string of changes pursued by Cohen since he joined GameStop’s board.
Former Chief Financial Officer Jim Bell and Chief Customer Officer Frank Hamlin are among the senior executives who have left the company in recent weeks.
Cohen has brought in executives from Chewy and Amazon. But Chewy and Amazon still sell physical goods, albeit online. Video games are becoming increasingly digital, leaving GameStop with no item to ship to you. Perhaps GameStop could process those digital transactions, but I don’t see why the game publishers wouldn’t just do that themselves and keep 100% of the revenue.
This leaves them with consoles, primarily. But new consoles only come out every 5-7 years, not enough to sustain a brick and mortar business with 5,000 stores.
No matter who he brings in, Cohen faces an uphill battle. The video game industry has simply changed in ways that make it difficult for a company like GameStop to survive.
For more on GameStop, check out these post:
- Reddit Up, Michael Jordan Down as GameStop Soars
- GameStop Plans to Dilute Shareholders, Issue Hundreds of Millions in New Stock
- GameStop Sales Down 40% in 2 Years
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