GameStop shot his CEO Matthew Furlong and named its chairman, Ryan Cohen, as executive chairman, effective immediately the company said on Wednesday.

Shares of GameStop fell more than 15% on Thursday.

The company announced the shake-up as it reported that its revenue fell and its loss narrowed in the first fiscal quarter compared with a year ago.

GameStop did not give a reason for the layoffs, but noted the change in its quarterly securities filing.

“We believe that the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our shareholders,” the filing states.

Cohen acquired a stake in GameStop in 2020, and in January 2021, he and two other former Chewy executives were named to the retailer’s board of directors as part of a deal with the company’s management. His investment firm, RC Ventures, currently owns an 11.9% stake in GameStop, according to the filing.

Watches: New CNBC documentary “Making of the Meme King” features Ryan Cohen

In a separate securities filing, GameStop said Furlong was fired Monday and said he will be able to receive payments and benefits “related to termination without reason.” Furlong also resigned from the company’s board on the same day, reducing it to just five members.

Cohen will be in charge of capital allocation, evaluating potential investments and acquisitions, and overseeing GameStop’s holdings managers.

IN cryptic tweet posted about half an hour after Furlong’s shooting was announced, Cohen wrote, “Not for long.”

Activist investor a Chewy the founder is known for saying very little publicly and making vague statements online.

Ryan Cohen from an appearance on CNBC.

CNBC

The decision to part ways with Furlong comes just months after GameStop announced its own first quarterly profit in the two years he was in charge.

As part of the leadership shuffle, Alan Attal, a former Chewy executive and current GameStop board member, has been named lead independent director of the board, the filing said.

Mark Robinson, GameStop’s general counsel, has been named general manager and chief operating officer of the retail business. His responsibilities will include “administrative affairs, company development, legal affairs and support of GameStop holdings, including oversight of other executive officers in addition to [Cohen]” according to the filing.

Robinson will report directly to Cohen and will continue to serve as GameStop’s general counsel and secretary.

Furlong was named CEO of GameStop in June 2021, when the company was in the early stages of a turnaround plan. The former Amazon executive was appointed as GameStop transitioned from a longtime brick-and-mortar retailer to an online player with the ability to compete with rivals such as Walmart, Sony and Microsoft.

Prior to his roughly two-year stint as CEO of GameStop, Furlong spent nearly nine years at Amazon, most recently leading the growth of its business in Australia. Prior to that, he served as technical advisor to Amazon’s head of consumer business in North America and worked for Procter & Gamble.

Furlong could not immediately be reached for comment.

The announcement coincided with GameStop’s first quarter earnings release. In the three months ended April 29, GameStop reported revenue of $1.24 billion, down from $1.38 billion in the year-ago period. Its net loss narrowed to $50.5 million, or 17 cents a share, from $157.9 million, or 52 cents a share, a year earlier.

Sales in the United States, Canada and Australia fell 16.4%, 18.5% and 8.9% respectively compared to the previous period, while sales in Europe rose 26.2% year over year, according to GameStop’s quarterly filing.

The company attributed the decline in revenue to currency fluctuations, fewer game titles being launched, and moderate sales of used software and hardware and collectibles. In the collectibles category, where GameStop has the ability to drive long-term growth, sales fell to $173 million, compared with $220.9 million in the year-ago period.

The company incurred $14.5 million in transition costs related to its restructuring efforts in Europe. It noted that more transition fees will be needed in the current quarter.

GameStop improved its margins by dramatically cutting costs. Selling, general and administrative expenses were $345.7 million for the quarter, down from $452.2 million in the year-ago period.

In a press release, the company said it will not hold a conference call to discuss earnings for the quarter.

Read the full earnings report here.



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