GameStop, the struggling video game retailer, has fired Matt Furlong, its CEO for the past two years, and said its chairman, Ryan Cohen, will take on a new executive role. Shares fell more than 20%.
The company said Wednesday in a statement that Cohen’s responsibilities as CEO of the video game franchise will include management oversight and capital allocation. GameStop general counsel Mark Robinson will become general manager and chief executive officer.
The money-losing retailer also reported fiscal first-quarter sales that fell short of analyst estimates. Revenue for the period ended April 29 fell to $1.24 billion, below estimates of $1.34 billion. The loss in the quarter narrowed to 14 cents and was below analysts’ expectation of 17 cents.
GameStop has struggled to adjust to the growing share of game sales that take place both online and away from stores. Annual sales fell from a peak of US$9.36 billion to US$5.93 billion last year.
Furlong delivered a profitable holiday quarter for the company, in part because of job cuts and store closures. Cohen said at the time that GameStop would become a healthier company. The company said in a filing on Wednesday that while Furlong was fired as CEO, his resignation from the board “did not result from any disagreement with the company.”
Cohen is the largest shareholder in the chain with 12% of the shares. Shortly after GameStop announced Furlong’s departure, Cohen Post a message on Twitter This appears to be a play on his name.
Cohen is the founder of Chewy.com. Despite GameStop’s stock historically skyrocketing in 2021 during the meme stock craze, it failed to capitalize on brand interest. Management has been unsuccessful experimenting with Web3 and a variety of business models for its brick-and-mortar stores.
In its filing, the company said it continues to focus on “three overarching goals: creating the omnichannel retail experience, achieving profitability and leveraging brand equity to support growth.”
GameStop shares fell to as low as $19.89 in extended trading after the announcements. Shares are up 41% this year through Wednesday’s close in New York.