A billionaire investor is joining the ranks of GameStop's Board of Directors in an attempt to save the failing retail chain. The news comes shortly after reports that, despite the gaming industry growing as a whole in 2020, GameStop holiday sales are down.
Ryan Cohen, the billionaire investor in question, owns a significant 12 percent of the company's stocks. Cohen also brings to GameStop two additional new board members, whom he shares a past with at pet food and toy company, Chewy.
The major GameStop investor has been raising concerns to the company for several months now, requesting more GameStop store closures in an effort to get the company rooted more into online services. With Cohen and his cohorts now stepping into the company for a more hands-on approach, gamers can expect more drastic changes to the chain sooner than later. Cohen has been offered a seat on the board multiple times before, declining up until now due to his venture capital company RC Ventures not being interested in receiving "a lone seat on GameStop's ten-member board."
It seems apparent that the two parties reached a compromise, with the addition of Alan Attal and Jim Grube. Attal and Grube both previously worked with Cohen at Chewy, which sold to PetSmart in 2017 for over $3 billion. Given the fact all of the new members have a successful background in e-commerce, it likely could mean they've signed on to help put Cohen's requests into significant action.
This could translate into even further closures of brick-and-mortar locations, despite the closure of over 400 GameStop stores in 2020. GameStop appears to be all for the new help, as a press release from CEO George Sherman states, "We have reached an outcome that is in the best interest of all stockholders and can enable GameStop to accelerate efforts to deliver enhanced value for the Company."
GameStop has indeed struggled over the past few years, as game sales become purchased increasingly in digital formats. While its shares did temporarily spike upon the announcement of a multi-year partnership with Microsoft, its growth over the holiday season was slower than expected. This could be due to the ongoing general supply issues with the PS5 and Xbox Series X, the botched console pre-orders that may not show up until April, or the widely-criticized TikTok dance competition for employees to get more hours. Whatever the reason may be, the company is looking to reinvent itself, before it's too late.
However, it's not all bad news for gamers. GameStop is reportedly accepting Cyberpunk 2077 returns even if the game has been opened.
Source: GameSpot