GameStop Names Ex-Amazon Executives as New CEO, CFO

Just hours after his appointment as new chairman of the board at GameStop, Ryan Cohen June 9 wasted little time returning to the online universe in selecting a new CEO and CFO.

CEO Matt Furlong

The venerable video game retailer has named Matt Furlong as new CEO and Mike Recupero as new CFO. Furlong and Recupero come from Amazon, where they each held senior roles and oversaw various growth initiatives during their respective tenures. Furlong’s start date is June 21, and Recupero’s start date is July 12.

Furlong replaces CEO George Sherman, who held the position since 2019, but was forced out with the arrival of Cohen, founder of online pet supply company

Cohen is looking to jumpstart GameStop’s e-commerce initiatives, and Furlong is a veteran e-commerce leader with significant experience implementing growth strategies across global geographies and product categories. Most recently, he was a country leader and oversaw Amazon’s Australia business. He was previously a technical advisor to the head of Amazon’s North America Consumer business. Throughout his nearly nine years at Amazon, he also ran a variety of product categories and oversaw strong market share expansion.

Recupero replaces Jim Bell, who exited the retailer in February. The former is a technology industry finance executive, who spent more than 17 years at Amazon supporting growth across global geographies and product categories. He most recently served as CFO of the North American Consumer business after serving as CFO of Prime Video. He previously served as the CFO of the European Consumer business. He began his career at Amazon, holding analyst, manager and director roles of increasing responsibility.

GameStop Expands E-Commerce Fulfillment Capacity

GameStop May 3 announced the expansion of its North American fulfillment network through its entry into a lease of a 700,000 square foot fulfillment center in York, Penn.

The facility is expected to be operational by the fourth quarter of 2021 and will support e-commerce and fulfillment needs. The nation’s largest video game retailer expects the fulfillment center will position it to grow product offerings and expedite shipping across the East Coast.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

GameStop is in the midst of internal reorganization with the pending arrival of new chairman Ryan Cohen, co-founder of online pet supplies company CEO George Sherman and other executives are leaving as Cohen staffs the retailer with Chewy executives in an attempt to push online gaming and e-commerce, and away from packaged-media retail.


Departing GameStop Executives Eyeing Lottery-Winning Paydays

July 31 can’t come soon enough for several GameStop executives, including CEO George Sherman, who are slated to exit the video game retailer at that time in a management reorganization driven by incoming chairman of the board Ryan Cohen, co-founder/CEO of online pet supply service

Sherman, CFO James Bell, chief customer officer Frank Hamlin, and chief merchandising officer Chris Homeister all have provisions in their contracts that call for expedited vesting of stock options, Wall Street-based restricted shares that can drive executive compensation into the stratosphere — with no tax liability for the company.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

For example, Netflix co-founder/co-CEO Reed Hastings exercised more than 1.33 million stock options in 2020 worth more than $612 million — taxes on which Hastings, not Netflix, is responsible for.

For Sherman & Co., the payday won’t be as large, but still significant considering they are being forced out at a time when GameStop shares are trading at atypical highs due in part to a third-party turf war between individual investors and established hedge funds.

Sherman, who through the middle of the month was the largest individual shareholder, inexplicably agreed to give up $47 million in stock options and $5 million in cash as part of a severance agreement that will enable him to exercise 1.1 million in stock options worth $169 million at market close on April 23.

Bell and Homeister each have restricted shares worth $43.6 million, while Hamlin’s stock options are worth $33.5 million on paper. All three executives reportedly could receive even more as a result of performance-based clauses in their employment contracts — performance that had little to do with their management, and much more to do with market manipulation and Wall Street politics.

GameStop shares traded at $19 per share at the end of 2020. But when Cohen — reportedly a darling among individual investors — began buying shares, online trading forums on Reddit caused a crowdsourcing of sorts among followers that saw the retailer’s shares reach of peak of $483 per share in late January. In the process, some hedge funds nearly went bankrupt betting the stock would decline, or short.

“In fairness, George may have asked for this,” said Wedbush Securities media analyst Michael Pachter. “He lost all of his hand-picked executive lieutenants [with Cohen’s arrival].”

Regardless, GameStop shares opened April 26 down at $149 per share. Bank of America values the stock at $10 per share. For Sherman & Co., the next 90+ days could be maddening.

GameStop CEO George Sherman to Step Down

George Sherman, GameStop’s CEO for the past two years, is set to step down on July 31 or sooner if a successor is found before then. The nation’s largest video game retailer first mentioned a move for a new chief executive officer in a March 23 regulatory filing.

George Sherman

Sherman, a longtime retail executive, had become victim to a changing investor line-up and external political battle between independent investors and Wall Street hedge funds — the latter seeing GameStop’s stock price fluctuate wildly at skyrocketed valuations.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Much of that investor speculation was spearheaded by Ryan Cohen, the co-founder of online pet food company Chewy and a renegade investor who became owner of 10% of GameStop stock. Cohen’s actions, which resulted in GameStop shares increasing 4,000% in value over the past six months, put him on the board as chairman.

Cohen is looking to transition GameStop from a packaged media retail to digital retailer, when in reality he just wants a chief executive attune to his business outlook. Cohen thanked Sherman for his leadership and “many decisive steps” taken to stabilize the business during COVID-19 pandemic.

“The company is much stronger today than when he joined,” he said.

Sherman, who saw the board last week yank 587,000 shares from his stock portfolio, still leaves with shares worth hundreds of millions of dollars.

Ryan Cohen

“I am very proud of what we have accomplished at GameStop over the past two years,” Sherman said. “It has been a privilege to lead so many dedicated, talented individuals, who collectively possess tremendous passion for the gaming industry. We have helped bring stability and strength to the business, including by de-densifying our store footprint, reducing costs and debt, and driving e-commerce growth.”

Video game analyst Michael Pachter with Wedbush Securities in Los Angeles, said that since early January, Cohen had “systematically” dismantled Sherman’s staff, his board and back-filled with his own candidates.

“It’s a reasonable conclusion that he would cut George loose as well,” Pachter said.

GameStop Reportedly Looking for New CEO

GameStop, the world’s largest video game retail chain that has seen its stock fluctuate wildly in recent months due to third-party speculation, is reportedly looking for a new CEO, and has hired an executive headhunter.

Reuters, citing sources, said the retail chain is looking to replace CEO George Sherman as it increasingly focuses on digital distribution. Sherman, who was named CEO two years ago, has a 25-year career in brick-and-mortar retail, with executive stints at Advance Auto Parts, Best Buy, Target and Home Depot.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

George Sherman

GameStop recently named Ryan Cohen, founder of online pet store Chewy, as its chairman of the board. The move came after Cohen, who acquired about 10% of the company in 2020, had several associates named to the board in January.

Last month, GameStop hired two former Chewy executives, Andrea Wolfe and Tom Petersen, in addition to hiring former Amazon executive Elliott Wilke as chief growth officer.

Ryan Cohen

Cohen is no ordinary executive. The 35-year-old is reportedly revered by individual stock traders for his outside-the-box thinking. In fact, it was Cohen who help jumpstart online community social media platform Reddit’s impassioned interest in GameStop and other stocks earlier this year. The enthusiasm, which pitted individual and day traders against hedge funds — the latter looking to short the stock — made headlines as GameStop’s price-per-share skyrocketed based little on the company’s performance. GameStop shares are up almost 4,000% from a year ago.

GameStop Reports Winter Holiday Sales Boost Despite Pandemic, New Gaming Console Shortages

GameStop reported that worldwide sales results for the nine-week holiday period ended Jan. 2 reflected a 4.8% increase in comparable store sales and a 309% increase in e-commerce sales. Total sales declined 3.1% driven by an 11% decrease in the company’s store base due to a planned “de-densification” strategy, temporary store closures around the world due to pandemic-related government mandates and lower store traffic, particularly later in December, due to the significant impacts of COVID-19.

Total comparable store sales increased 4.8% compared with last year and reflected a 29.6% sequential improvement from the third quarter of fiscal 2020.  The positive results were adversely impacted in the high single-digit to low double-digit percentage point range, as a result of a significant reduction in consumer traffic related to the increase in COVID-19 cases.

Net sales were $1.77 billion, a 3.1% decrease compared to 2019, as strong console demand for PlayStation 5 and Xbox Series X and Series S systems was offset by store closures mandated by local governments due to COVID-19, and industry-wide limited supply of new gaming consoles, and supply chain constraints broadly.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

E-commerce sales, which are included in comparable store sales, rose 309% and represented approximately 34% of total company sales, with total worldwide online sales year to date reaching over $1.35 billion, far exceeding management’s $1 billion growth objective.

Regional sales in Australia and New Zealand, where the GameStop’s operations were materially less impacted by the effects of the pandemic, total comparable sales for the nine-week period increased approximately 31%, outperforming the other operating regions.

“Demand for the new generation of consoles remains very strong, and as a result, we anticipate the consumer’s excitement for the new console technology will benefit us going forward well through 2021,” CEO George Sherman said in a statement.

GameStop’s current fourth quarter ends Jan. 30.

GameStop Narrows Q2 Loss; Sales Fall 27%

Video game retailer GameStop Sept. 9 reported a second-quarter (ended Aug. 1) loss of $111.3 million, which was a significant improvement from a loss of $415.3 million during the previous-year period. Revenue fell 22% to $942 million, from $1.3 billion a year ago.

The world’s largest video game brick-and-mortar retailer said the coronavirus pandemic helped reduce some operating costs while propelling the chain’s e-commerce sales. The quarter saw an 800% increase in global online sales, and a $133.7 million reduction in SG&A expenses — underscored by a 50% reduction in inventory costs and $181.9 million in free cash flow for the quarter.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“We believe the actions we are taking to optimize the core operations of our business by increasing efficiencies and creating a frictionless digital ecosystem to serve our customers, wherever and whenever they choose to shop, are enabling us to navigate the COVID-19 environment, while positioning us well for the launch of the next generation of consoles,” CEO George Sherman said in a statement.

The CEO said the quarterly revenue decline was due to the impact of operating during the last few months of a seven-year-long current-generation console cycle and the subsequent limited availability of hardware and accessories; a 13% reduction in total store operating days due to store closures driven by the pandemic; and a 10% reduction in the store base, as part of the company’s “de-densification” strategy, partially offset by almost 40% of closed store sales recaptured through the transfer to neighboring locations and online, leading to improved cash flow.

Comparable store sales declined 12.7%, adjusting for fewer store operating days due to store closures as a result of the global COVID-19 pandemic.

“While the ongoing pandemic continues to create a somewhat uncertain environment in the short term, we are very pleased by the consumer response at GameStop to the few recent video game product introductions and we believe we are ready, with expanded service and payment options, to handle the expected surge in demand and participate in a very significant way in the console launches later this year,” Sherman said.

Michael Pachter, media analyst with Wedbush Securities in Los Angeles, said GameStop’s top-line results were ahead of management’s initial expectations driven by heightened ongoing consumer demand during the pandemic, along with particular strength from the chain’s e-commerce channel.

“We believe management is executing nearly flawlessly in what had previously appeared to be a hopeless situation,” Pachter wrote in a Sept. 10 note.

GameStop Closes 100 Stores Due to Civil Unrest, Floyd Memorial

GameStop June 9 said it temporarily shuttered 100 stores in the United States to protect employees from violence and looting as a result of civil unrest following the Memorial Day killing of George Floyd at the hands of Minneapolis police. The nation’s largest video game chain said 35 of the stores would be closed indefinitely due to damages sustained by protesters.

Speaking on the fiscal call, CEO George Sherman said that as an act of solidarity for social justice, all GameStop stores in Minneapolis, Fayetteville and Houston were closed for their respective Floyd memorial services.

“At GameStop, we stand against this injustice,” Sherman said.

As previously disclosed, GameStop announced it lost $130 million in the first quarter (ended May 2). This compared with net income of $6.8 million during the previous-year period.

The nation’s largest video game retailer attributed the loss to store shutdowns due to the coronavirus pandemic, a $53 million non-cash tax charge associated with the valuation allowance against deferred tax assets, an additional $18.5 million in incremental wages paid to our hourly associates to help offset lost wages due to store closures from the pandemic, and approximately $3 million in incremental costs associated with safety materials and equipment to ensure the safety of our customers and associates.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

March 22 GameStop temporarily closed all 3,526 of its U.S. locations — with approximately 65% of these locations conducting a limited curbside pickup offering. During the final six-weeks of the fiscal quarter, about 90% of the company’s global stores were closed to customer access and only Australia, which represents about 10% of the global store count, remained fully open and accessible to customers; another 42% remained open for limited curbside delivery and 48% remained fully closed. In Australia, where all stores remained open for business during the first quarter, increased demand drove a 35% comparable store sales increase.

Sherman remained upbeat on the numbers, suggesting that without COVID-19, the chain has turned a fiscal corner back to profitability.

“Our performance included total sales just shy of our original expectations, even as stores closed due to the pandemic and key video game titles shifted to the second and third quarters, exacerbating the headwind from operating in the final stage of a console cycle,” Sherman said in a statement. “Even more impressive is that our e-commerce sales grew 519% and more than 1,000% during the six weeks that our store base temporarily closed to customer access. We believe this reflects the loyalty of the GameStop customer and the confidence they place in us as their preferred place to shop.”

At the end of May, GameStop had approximately 85% of its U.S. locations open to limited customer access or curbside delivery, and approximately 90% of its international locations open.

GameStop Expects $170 Million Q1 Loss, 35% Sales Decline Due to COVID-19

GameStop June 5 jumped ahead of fiscal bad news, announcing preliminary results for the first quarter (ended May 2). The world’s largest video game retailer said it expects to post a fiscal loss of $170 million for the period, compared to a loss of $6.8 million in the previous-year period.

Global sales are expected to drop upwards of 35% to $975 million from $1.5 billion in the prior year fiscal quarter. Comparable store sales are expected to decrease about 30% to 31%. Excluding stores that were closed as a result of the COVID-19 pandemic, comparable store sales are expected to decline from 16% to 17%.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

GameStop expects hardware sales to be a larger percentage, and software sales to be a smaller percentage, of total sales in the first quarter of fiscal 2020 compared to the prior year fiscal quarter.

GameStop was hit hard by the coronavirus, with about 76% of the chain’s 1,802 international stores temporarily closed beginning in March. On March 22, the company temporarily closed all 3,526 of its U.S. locations — with about 65% of the locations conducting a limited curbside pickup offering. During the final six-weeks of the fiscal quarter, about 10% of stores worldwide remained fully open and accessible to customers; about 42% remained open for limited curbside delivery and 48% remained fully closed.

Follow us on Instagram

“Despite the disruption caused by the pandemic, we are pleased to see our strategic investments in omni-channel capabilities allow us to deliver on the increased demand for gaming, entertainment and remote work products,” CEO George Sherman said in a statement.

GameStop officially reports Q1 results on June 9.

GameStop Bounces Back With $21 Million Q4 Profit

No wonder GameStop tried to call itself an “essential business” and didn’t want to shutter stores during the coronavirus pandemic.

The world’s largest video game retail chain March 26 reported a fourth-quarter (ended Feb. 1) profit of $21 million, compared with a loss of $188 million during the previous-year period. Revenue dropped 28% to $2.2 billion from $3 billion as the industry grapples with a lack of new-generation video game consoles slated to launch later this year.

For the fiscal year, GameStop, which operates about 5,400 stores, narrowed its net loss about 30% to $471 million from $673 million last year. Notably, the chain’s collectables segment saw a 10% decline to $245 million from $270 million.

“We delivered profitability, on an adjusted basis, ahead of our updated expectations, marking progress on our strategy to evolve our operating model and position GameStop for long-term profitable growth,” CEO George Sherman said in a statement. “We accomplished this, despite industry challenges that led to an expected significant decline in sales.”

Sherman said the chain improved efficiency and effectiveness across the company, including a $130 million reduction in adjusted SG&A expense, reductions in inventory, accounts payable and debt.

“We accelerated our digital capabilities by elevating our web platform and further optimizing our retail footprint through market de-densification, while setting up a laboratory in our Tulsa, Okla., market to test experiential elements in 12 stores with promising initial results.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

GameStop also spent $199 million repurchasing shares. Wall Street approved, sending the stock up 9% in after-market trading. Shares finished up nearly 6% to close at $4.41 per share.

Regardless, GameStop has shuttered most stores to foottraffic, with sales limited to curbside pick-up and ecommerce. GameStop has temporarily halted in-store game trades and sales.

Notwithstanding the Q4 results and upcoming console launches, GameStop finds itself one of many victims of the global COVID-19 pandemic, according to media analyst Michael Pachter with Wedbush Securities in Los Angeles.

“We expect the pandemic to have largely passed by the end of July, and have not adjusted our models materially for periods after the second quarter,” Pachter wrote in a March 27 note. “While we are quite optimistic that the company will return to profitability in the fall, the effects of the pandemic may linger beyond the time frame we have modeled, putting our estimates at risk.”