board tapped Chewy Inc. co-founder
to lead a committee dedicated to transforming the retailer.
The move comes as GameStop faces pressure to deliver results that measure up to its recently inflated share price that was driven up by online trading mobs.
GameStop said Monday that the new Strategic Planning and Capital Allocation Committee will be led by Mr. Cohen, who last year bought a large stake in GameStop and began pushing the company to revamp its business model. He is joined on the new committee by
Chewy’s former top operations executive, and Kurt Wolf, an executive at investment firm Hestia Capital Management LLC who also has been agitating for change at GameStop.
The committee will “continue to focus on identifying actions that can transform GameStop into a technology business and help create enduring value for stockholders,” the company said.
Messrs. Cohen and Wolf have been pushing for change at the retailer for some time.
Mr. Cohen, who disclosed a roughly 10% stake in GameStop in November, publicly urged the company to shift away from its bricks-and-mortar centric business model and instead focus on e-commerce and other technology-driven operations. He joined the board in January.
Mr. Wolf has owned GameStop shares since 2012. In 2019, he teamed up with another investment firm to revamp GameStop’s board and boost stock buybacks. He was elected to the board last year after criticizing the Grapevine, Texas, company for squandering shareholders’ money.
In another wild trading day for GameStop, its shares jumped 41%, or $56.76, to $194.50 on Monday.
GameStop’s stock skyrocketed in January when an online community successfully encouraged hordes of people to buy shares in it and other heavily shorted public companies. While GameStop’s shares have fallen since cresting at $483, it’s remained well above the roughly $17 price point it had at the start of the year.
In recent years GameStop has struggled to turn a profit in the face of mounting competition from large online retailers such as
as well as changing consumer and developer habits. Rather than buy physical games at retail stores, many people now download or stream games directly from their consoles, computers and mobile devices. Meanwhile, developers are increasingly making games free to play, generating revenue through sales of in-game items.
After reporting losses in five of the past six quarters, GameStop has said it expects to post a profit for the quarter ended Jan. 30. Results from the fourth quarter, due out later this month, are typically GameStop’s strongest by revenue and profit.
Since the formation of the new committee, GameStop said it has appointed a chief technology officer and hired executives to focus on customer issues and ecommerce fulfillment, among other steps.
The new committee will evaluate GameStop’s operational focus, capital structure and capital-allocation approach, as well as digital capabilities and personnel, the company said.
Last month the Wall Street Journal reported that GameStop’s finance chief was forced out of his role, according to people familiar with the matter. A search for a replacement is currently under way, the company has said.
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