Video game retailer GameStop announced that it had dismissed its CEO, Matthew Furlong and appointed its former board chairman, Ryan Cohen, as the new executive chairman, effective immediately.
The decision was made as GameStop reported a drop in revenue and a narrowed loss in the first quarter of this fiscal year compared to the same period last year.
The dismal of Furlong caused GameStop shares to plummet by more than 15% on Thursday.
GameStop's leadership shake-up raises questions
GameStop did not provide the reason behind Furlong's dismal. However, the change was noted in the company's quarterly securities filing.
The filing stated that GameStop aims to stabilise and optimise its core business under Cohen's leadership to achieve sustained profitability and unlock long-term value for shareholders.
Cohen, who took a stake in GameStop in 2020, currently holds an 11.9% stake in the company through his investment firm, RC Ventures.
Furlong receives termination benefits; Cohen takes charge
In a separate securities filing, GameStop disclosed that Furlong was terminated on Monday. He will be eligible to receive payments and benefits associated with a termination without cause.
Furlong also resigned from the company's board, reducing it to five members. The filing stated that Cohen will now oversee capital allocation, evaluate potential investments and acquisitions, and supervise GameStop's holdings.
The company's performance and future outlook
GameStop's fiscal first-quarter earnings revealed a decrease in revenue from $1.38bn to $1.24bn compared to the same period last year.
The net loss narrowed to $50.5m, or 17¢ per share, from $157.9m, or 52¢ a share, in the previous year. Sales in the US, Canada and Australia saw declines while sales in Europe increased.
The company attributed the drop in sales to currency fluctuations, fewer game title launches and weak sales in pre-owned software, hardware and collectables.
The company aims to drive long-term growth in the collectables category. GameStop has made efforts to reduce costs, resulting in improved margins.
