A GameStop location on 6th Avenue in New York on March 23, 2021.
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Just hours after being named GameStop‘s CEO, Ryan Cohen sent out a memo to employees Thursday that emphasized he will take dramatic steps to ensure the struggling video game retailer survives.
“Our job is to make sure GameStop is here for decades to come,” he wrote in the email that was sent to corporate employees and store leaders and obtained by CNBC. The email was sent to corporate employees and store leaders, which CNBC obtained. It stated that “our job is to make sure GameStop is here for decades to come.” The company’s expenses must be examined under a magnifying glass and any waste must be eliminated. Money-wasters and delegators are not welcome in the company. I expect all employees to treat the company’s money as if it were their own, and set an example. “
Cohen, a billionaire activist investor and founder of direct-to-consumer pet food and supply retailer Chewy, was named the company’s new leader Thursday morning. His previous role was as executive chair at GameStop. As of late June, his firm RC Ventures was the company’s largest shareholder with a 12.09% stake, according to FactSet.
Cohen’s CEO announcement previewed the company’s emphasis on slashing costs: He will not receive a salary in his new role.
Cohen became an integral part of the “meme stock” frenzy, as he invested in companies including now bankrupt Bed Bath & Beyond. He joined GameStop’s board in 2021 in the thick of the phenomenon.
Cohen’s new role kicks off the latest chapter of GameStop’s effort to reinvent itself. The Grapevine-based retailer was founded in 1980 and built its business by selling video games, consoles, and other gaming products. It has had to find new business models as online video game sales have declined. The company also had to deal with major leadership changes. GameStop hired Amazon veterans Matt Furlong as CEO and Mike Recupero as chief financial officer. With Cohen on the board, GameStop was able to hire multiple Amazon veterans. Cohen got the top job nearly four months after the company ousted Furlong.
GameStop shares closed at $16.84 on Thursday and have fallen nearly 9% this year. The closing price was less than a quarter of its all-time high close of more than $86 a share in January 2021.
Earlier this month, GameStop reported a second-quarter net loss of $2.8 million, compared to a $108.7 million loss in the prior-year period.
Read the full memo below:
I will be straight to the point.
It is not sustainable for GameStop to operate a money losing business. It is not sustainable for GameStop to run a money-losing business.
I will get straight to the point.
It is not sustainable for GameStop. We must be able to withstand any adverse situation with our expense structure. We must remain profitable, regardless of the economy. It’s our job to ensure that GameStop will be around for many decades. Extreme frugality is needed. The company’s expenses must be examined under a magnifying glass and any waste eliminated. I don’t want money-wasters or delegators in the company. I expect all employees to lead by example and treat the company’s money as if it were their own. We will stay in the game if we survive. Avoiding the deadly sins can help you survive. It is often the result of buying poor inventory, using leverage and running high expenses. GameStop will be around for a very long time if they avoid these mistakes and focus on the basics. I don’t get paid so I have to either go down with the ship, or turn the company around. It won’t be an easy task. Best of luck to us all.
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