- Oops!Something went wrong.Please try again later.
On Monday, GameStop announced that Chewy co-founder and former CEO Ryan Cohen is taking a board seat at the company and installing two other board members from his past at Chewy. Together, they'll make up a third of the company's new board.
GameStop is by far the world's largest video game retailer, but the company has been struggling for years as game sales shift from physical retail stores to digital downloads.
The coronavirus pandemic provided an unexpected boost for the video game industry, which had a huge year in sales — and GameStop benefited greatly from that sales boon: The company's online sales surged over 1,500% soon after coronavirus lockdowns started in late March.
The co-founder and CEO who convinced Wall Street that pets are big business has a new pet project: Turning around the fortunes of ailing games retailer GameStop.
Chewy co-founder and former CEO Ryan Cohen is taking a seat on the company's board, joining two former Chewy lieutenants, former CFO Jim Grube and former CMO Alan Attal, GameStop announced on Monday.
Together, pending a vote in June, the three former Chewy execs will make up a third of the newly-formed GameStop board of directors.
It's the latest such move from Cohen and his venture firm, RC Ventures, following the sale of Chewy to Pets.com in 2017 for $3.35 billion. Cohen previously bought up a sizable chunk of GameStop shares, accumulating over 12% of the company by December 2020 and sending stock value soaring.
In September 2020, when Cohen initially purchased a significant chunk of the company's shares, he proposed a plan to the board to focus GameStop on ecommerce opportunities. One example of those opportunities is tied to GameStop's core business, reselling used games. Cohen reportedly proposed an online version of the retailer's well-known game trade-in program.
GameStop repeatedly cited Cohen and his former colleague's experience with ecommerce as critical to ther roles on the board. "Their substantial e-commerce and technology expertise will help us accelerate our transformation plans and fully capture the significant growth opportunities ahead for GameStop," board chair Kathy Vrabeck said in the press release.
Despite being the world's largest video game retailer, GameStop has struggled in recent years to stay afloat amid increasing competition from digital game stores.
Like Blockbuster Video and Tower Records before it, video game retail stores are facing major challenges to their business model. As more people buy video games through digital storefronts like Steam or the Xbox Store, fewer buy games on physical discs from GameStop.
That trend was a huge problem for the company - at least until the coronavirus pandemic forced millions of people indoors. Many of those people, with loads of free time on their hands suddenly, turned to video games. Sales of video-game hardware, software, accessories, and game cards topped $1.6 billion for March, according to The NPD Group's monthly report - "the highest reported spend for a March month since the $1.8 billion achieved in March 2008."
By year's end, the video game industry's revenues had topped both sports and film combined, NPD found. GameStop's stock, meanwhile, has rebounded from about $5 per share in early January 2020 to nearly $20 per share by January 2021.
Got a tip? Contact Business Insider senior correspondent Ben Gilbert via email (firstname.lastname@example.org), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.
Read the original article on Business Insider