GameStop's CEO will be stepping down later this year, continuing the company's seismic changes over the past few months. GameStop confirmed that its CEO George Sherman will be leaving his position on July 31st, or earlier if a suitable replacement can be found. This follows last week's report that GameStop had engaged an executive headhunter to replace Sherman and hasten the company's transformation into a primarily e-commerce driven business. Although Sherman is credited for helping steer GameStop through the COVID-19 pandemic, his expertise is in brick-and-mortar retail, which doesn't line up with GameStop's future plans.
Sherman's planned departure continues a transformation kicked off by Ryan Cohen, the co-founder of the online pet food company Chewy. Cohen became a major investor in GameStop last year and has led the charge in the company's pivot to digital. Cohen is set to become GameStop's chairman of the board in June and has led the company to hire executives from Amazon and Chewy to help bolster its online presence. While GameStop will continue to have physical locations, the company's move to an "omni-channel" retailer is seen as a response to the gaming industry's trend of consumers buying digital downloads, which severely hurt GameStop's used game and tradeback model.
Of course, GameStop is in a surprisingly good position for its transformation, the result of a strange Wall Street phenomenon that captivated market followers for weeks. GameStop's stock price saw a dramatic rise earlier this year when individual investors (largely organized on various Reddit communities) purchased shares en masse to challenge hedge funds and other institutional investors who had shorted the company, betting that it's stock price would continue to drop. The heavy volume of trading caused GameStop's share to skyrocket, triggering multiple pauses on Wall Street and even attracting the attention of the White House. Although stock prices are no longer near its peak price of $483/share, the company's stock is up over 700% from where it was at the beginning of the year. As a result, GameStop announced that it would sell thousands of its own shares to raise capital and pay down debt.