GameStop has been one of the most popular video game stores across the globe. However, GameStop Corporation made headlines when the company decided to fire its CEO, George Sherman, in April 2021. Sherman took the post in 2019, and since then, the company has undergone several changes. The retailer has been struggling over the past few years, leading to plummeting shares. Recently, investor Ryan Cohen was appointed as the executive chairman to oversee these changes. As the company braces for a new future, what should investors and gamers expect?
Why was George Sherman fired?
George Sherman was the CEO of GameStop since April 2019. During his tenure, the video game retail company faced tough competition and falling sales. Following these difficult times, the company decided that it was time to part ways with Sherman. Despite having strong leadership skills, the new director Ryan Cohen had indicated that he was looking for a significant change in leadership. Sherman had to go so that the company could undertake a new direction, which it hoped would boost sales and improve profitability.
What is Ryan Cohen’s plan?
Ryan Cohen, who founded the online pet product retailer Chewy, has been named the executive chairman of GameStop. After becoming a major investor of GameStop, Ryan Cohen has been pushing the company to embrace e-commerce and focus more on digital sales. If you’ve been following Ryan Cohen, you will know that he has a significant track record in e-commerce. He founded Chewy and grew it from a startup to a massive e-commerce business rivaling companies such as Amazon. His success has caused optimism among investors, who believe he has the answer to GameStop’s troubles. Ryan Cohen and his team are planning to transform GameStop into more of an online retailer. For instance, the company is looking to explore the sale of gaming paraphernalia and hardware. There might be a chance that GameStop could begin hosting competitive gaming events, which could draw even more business to its website.
What could this Mean for the Company and Investors?
GameStop’s stock price had been in an upward trend since the end of 2020 towards the pop-and-drop spike in January 2020. At the time, several online traders believed that GameStop could be the next big thing, which was why shares suddenly rose. The sudden increase in stock price created buzz and excitement among gamers and investors. Nevertheless, with the coronavirus pandemic and competition from online game sales sites, the retail giant has recently experienced a significant decrease in the frequency of physical gaming sales. Investors have hopes that Ryan Cohen’s expertise in e-commerce will be the missing piece in increasing GameStop’s digital sales of video games and its accessories. However, once investors learned that George Sherman was stepping down and Ryan Cohen would replace him, the company’s shares plummeted by 30%. This sharp decline indicates the power of the investors’ confidence in Ryan Cohen.
What Next for GameStop?
The appointment of Ryan Cohen as executive chairman illustrates the company’s commitment to expanding its e-commerce footprint. GameStop is most likely to close underperforming stores and focus more on online gaming. It’s clear that GameStop has significant room to grow, especially since more and more people are turning to digital sales of video games. However, only time will tell whether Ryan Cohen can help drive the change that the company needs. In conclusion, it’s too early to make predictions about GameStop’s future, but there is hope that the company will make significant strides under Ryan Cohen’s leadership.
GameStop’s decision in appointing Ryan Cohen to the executive chairman rubric is a considerable gamble for the company. Cohen has shown his expertise in the e-commerce sector through his company, Chewy. If Cohen can translate his success from Chewy to GameStop, the gaming company could see a renaissance. Ryan’s vision is to drive change by focusing on digital sales after the prevalence of the Covid-19 pandemic and the increase in online game sales competition. GameStop’s future looks bright, but there is much work to be done before it can get back to its glory days. As investors, gamers, and industry stakeholders, we’re all waiting to see how Ryan Cohen will implement his vision to transform GameStop.