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Published: July 3, 2023

Written by: Stoyan Todorov

  • GameStop has seen a significant shift in its upper management, which included the departure of Furlong
  • The company did not give an official reason for the shuffle of management
  • GameStop’s stocks dropped 20% following the announcement of Furlong’s departure

Following the announcement of GameStop’s fiscal first-quarter earnings, the company revealed it has terminated CEO Matthew Furlong’s contract and brought board member Ryan Cohen in his place.

Furlong Leaves GameStop

GameStop has been the source of some interesting news in the gaming sphere over the past years, and it recently added a new one after the company announced it has fired CEO Matthew “Matt” Furlong. The company has not yet officially announced the reason for the layoff, but it said in a statement that Ryan Cohen, GameStop’s board chairman, has been appointed as executive chairman effective immediately

Following the announcement, the company’s stocks plunged a whopping 20%, continuing the trend the company has been seeing since its first major drop in 2021. In the regulatory filing, the company said Furlong was fired as CEO on Monday, the same day he resigned from the board. GameStop added that his board resignation “did not result from any disagreement with the company on any matter relating to the company’s operations, policies, or practices”.

GameStop’s new CEO has a tough job in front of him now, as many analysts question whether Cohen can turn the company around. He is one of the founders of Chewy, an online retailer of pet food, which was acquired by PetSmart in 2017 for $3.35 billion, making it the biggest sale of an online retailing company at the time. He is not known for being too open about his business and is often memed for his cryptic online posts, including one that seemed to coincide with the shit in GameStop’s top management.

In 2020, Cohen took a stake in GameStop, and in the following year, he and two other former Chewy executives were named to the retailer’s board as part of an agreement with the company’s management. Currently, Cohen’s investment firm, RC Ventures, has an 11.9% stake in GameStop, according to filings. 

What Furlong Leaves Behind

Furlong was appointed as GameStop’s CEO in June 2021 when the company was in the early stages of a turnaround plan. Before his two-year-long tenure at GameStop, Furlong spent nearly nine years at Amazon, most recently leading the growth of its Australia business. 

His ousting from the company coincides with GameStop’s release of their fiscal first-quarter earnings. According to the document, the company’s revenue is $1.24 billion, down from $1.38 billion for the same period last year. Its net loss narrowed to $50.5 million, or 17 cents per share, from $157.9 million, or 52 cents a share, a year earlier.

Despite sales in North America and Australia dropping by around 17% and 9% respectively, those in Europe mark a significant raise of 26.2% year over year. GameStop attributed the drop in sales to currency fluctuations, fewer significant gaming title launches, and soft sales in pre-owned software and hardware, and collectibles.

In terms of collectibles, GameStop announced sales of $173 million, compared to $220.9 million in the year-ago period. The company also incurred $14.5 million in transition costs related to its restructuring efforts in Europe, which seem to have been a good investment, considering the rise in sales GameStop has seen from Europe.

GameStop did not hold a conference call to discuss the quarter’s earnings and it remains to be seen if Cohen can get the company out of the ups and downs it has been experiencing for the last couple of years.

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