Games retailer Gamestop has been much in the news recently. The well-documented battle on Wall Street between hedge fund investors, who backed the company’s share price to tank, and a number of smaller investors, who backed the company by buying shares and increasing its share price, was one of the big news stories of January and February 2021.
Additional research by JP Morgan has since discovered that it may well have been institutional investors, allied to smaller investors, that played a part in Gamestop’s share price surging. However, regardless of what caused the stocks and shares battle on Wall Street it was abundantly clear that Gamestop’s current business model wasn’t really working.
As such, it was no surprise when CFO Jim Bell left his role at the company, with the board appointing a new CTO in Matt Francis, as well as hiring two new executives. In addition, the company is looking for a new Chief Financial Officer to replace the departing Bell.
New Directors New Committee New Direction
Those moves were further entrenched earlier this week when Gamestop announced that its new board of directors had formed a new Strategic Planning and Capital Allocation Committee to identify potential ways to transform the company’s fortunes and business model.
The three-man committee is made up of former Chewy executives Ryan Cohen and Alan Attal, who joined the Gamestop board in January, as well as Kurt Wolf.
Wolf’s appointment is perhaps a surprise given that the company did not recommend his appointment to the board of directors last year, but shareholders voted him onto the board anyway.
It hasn’t taken long for the new committee to have an effect and to try to lead Gamestop in a new direction.
The board appointed a new CTO in Matt Francis, as well as hiring two new executives. In addition, the company is looking for a new Chief Financial Officer to replace the departing CFO Jim Bell, who announced his departure earlier this year.
“Transform Gamestop into a Technology Business”
A press release from the company announced the formation of the new committee and stated that:
“The committee will continue to focus on identifying actions that can transform GameStop into a technology business and help create enduring value for stockholders.”
Quite what that ‘technology business’ is remains to be seen, but this new direction is just part of a complete overhaul of Gamestop with the committee also believed to be looking at redefining or changing a number of other key areas including.
- Gamestop’s current operational objectives
- The capital structure at the company
- Allocation priorities
- Digital capabilities
- The Organisational Footprint
- And perhaps most worryingly for many workers, personnel.
Gamestop to move Online?
Many retailers have found operating from a bricks-and-mortar base can be somewhat expensive, especially during the recent pandemic and it seems possible, even probable, that part of the remit of the committee will be to look at the feasibility of Gamestop moving the majority of its services online.
That will be a concern for the many thousands of staff employed at its thousands of stores located all around the world.
The odds seem likely that in addition to becoming a more online-based order site for gaming software, Gamestop will also further diversify into other areas linked to gaming and this could include offering many forms of online services, such as esports events or even cloud storage.