GameStop CEO, Ryan Cohen, asks employees to practice frugality as their company fights for survival in the retail industry. Read on to learn more about the company’s situation and the open letter addressed by the CEO.
GameStop Tries to Stay in the Game
Changes Have to Be Made
GameStop has struggled to stay relevant as their primary customers have now resorted to buying video game products online instead of going to physical retailers to buy merchandise. The company has had to try and find new alternative sources of income, such as their venture with non-fungible tokens or NFTs. The situation has been dire. So much so that they even struck a partnership with the currently bankrupt cryptocurrency exchange embroiled in controversy, FTX.
Along with this, GameStop has also had a major leadership change recently last 2021, with ex-Amazon executives, Matt Furlong and Mike Recupero, as CEO and CFO respectively. Their roles would be short-lived however as Furlong and Recupero were both terminated from the company in June and July 2021. Ryan Cohen, who at the time was part of the company’s executives in 2021, replaced Furlong as CEO soon after. He is primarily known for being a billionaire activist investor, founder of pet food and supply retailer Chewy, and his involvement in the "meme stock frenzy, " which involved multiple redditors to invest in GameStop to combat hedge funds from shorting their investments on the company.
To Prosper is To Survive
Ryan Cohen sent a memo to employees on September 28th, addressing the need to take the necessary steps to survive in retail. He stated in his memo that "Our job is to make sure GameStop is here for decades to come. Extreme frugality is required. Every expense at the company must be scrutinized under a microscope and all waste eliminated."
He also stated that "Prospering in retail means survival. If we survive, we stay in the game." He also added "Surviving is avoiding the deadly sins that often lead retailers to self-destruct. " and listed down some examples like running expenses too high, using leverage, and buying bad inventory. He expects full cooperation from the employees as he was named CEO along with their announcement to cut costs and so he mentions that "I’m not getting paid, so I’m either going down with the ship or turning the company around. I much prefer the latter."
Sources:
CNBC - GameStop’s survival demands ‘extreme frugality,’ CEO Ryan Cohen tells employees
CNBC - GameStop shares plunge after big executive shake-up
CNBC - How GameStop’s Ryan Cohen became the ‘meme king’
Forbes - Ryan Cohen Named New Gamestop CEO - Stock Falls In Response
Wall Street Journal - GameStop Terminates Finance Chief as It Works to Turn Around Business
