GameStop has had it rough the last few years. The video game retailer has been suffering financial losses year over year. Causing the video game retail giant to have to shutter stores. Last year ago the video game retailer closed 321 of t’s stores. This year the global pandemic forced GameStop to announce the closing of over another 100 stores just two months ago.
It seems that still isn’t enough though. In a letter to GameStop’s board of directors, Ryan Cohen, pushed for GameStop to close even more stores. Cohen’s firm RC Ventures owns a nearly 10% share of GameStop. The Wall Street Journal obtained Cohen’s letter, which can be read here.
In the letter, Cohen claims GameStop isn’t doing enough to keep us with the rapidly changing gaming market and increasing trend of digital purchases and streaming gaming. Cohen argued that GameStop needs to “identify duplicative, underperforming stores and plan to forgo lease renewals.” Calling for the closure of any store that is considered to be underperforming.
Cohen also said that operations in Europe and Australia either need to be revamped or shut down altogether. “While the Australian market has shown signs of life, it is not nearly big or strong enough to offset the losses linked to the Company’s hundreds of stores across European nations,”
GameStop executives previously blamed the company’s 2019 poor performance on the sales of the aging, at the time, current-gen. Stating that with the release of the PS5 and X-Box One X the company will increase profits dramatically compared to 2020. Cohen however does not believe that will be enough. “the next console cycle’s temporary sales bump is not a justification for complacency and glacial transformation.”
No Clear Direction for GameStop
Cohen apparently wrote this letter after discussions with GameStop management hit a brick wall. Indicating there is a divide between what the investors want and what management wants.