Take a look inside Wall Street darling Ryan Cohen’s ambitious plan to ‘transform’ the retailer into the Amazon of gaming

Ryan Cohen - Chewy
Chewy cofounder and former CEO Ryan Cohen is now the head of RC Ventures, an investment firm that’s taken a 12% stake in GameStop.

  • Chewy cofounder and former CEO Ryan Cohen is the largest individual GameStop shareholder.
  • He’s also in charge of the board, and intends to turn the company into the Amazon of gaming.
  • Cohen is already making major moves at the company, and he has big plans for the future.
  • Visit the Business section of Insider for more stories.

What does Ryan Cohen want with GameStop?

That’s the big, unanswered question at the heart of his 12.9% ownership stake in the company – an investment he made well before GameStop became a meme stock.

Cohen, who cofounded Chewy and acted as CEO before it sold to PetSmart for $3.35 billion in 2017, does not have a background in the video game industry. His claim to fame is outfoxing Amazon at its own game – e-commerce – in a specific category: pets. That’s an especially meaningful claim to fame when it comes to Wall Street, which saw Cohen’s involvement in the company as a reason to buy the ailing retailer’s stock before Reddit found it.

Read more: Ryan Cohen made millions when Chewy got acquired. Now the millennial entrepreneur has a plan to turn around GameStop.

But Cohen is no casual investor in GameStop – he’s the chairman of its board, and an activist investor who has successfully lobbied the company to follow his advice several times thus far. He is clearly in this for the long term.

Though the lingering question of “Why GameStop?” remains unanswered, we know a lot about Cohen’s plans for the future of the company.

1. Cohen wants GameStop to become a technology company, with a focus on ecommerce over brick-and-retail stores.

gamestop store
A GameStop Corp. store on November 5, 2013 in North Las Vegas, Nevada.

Cohen’s investment firm, RC Ventures, owns 12.9% of GameStop. That stake makes it the second-largest single shareholder of GameStop.

Those shares cost tens of millions of dollars in 2020, and they put Cohen in a position to more directly engage with the company’s leadership. But those private conversations apparently didn’t go very well.

“Given that our attempts to privately engage with you since the summer have yielded little progress, we feel compelled to send a clear message to the Board today,” Cohen wrote in an open letter aimed at GameStop’s board of directors published in November 2020.

“GameStop’s leadership should immediately conduct a strategic review of the business,” he said, “and share a credible plan for seizing the tremendous opportunities in the rapidly-growing gaming sector.”

The letter, overwhelmingly, focused on the company’s need to transition to ecommerce.

“GameStop’s challenges stem from internal intransigence and an unwillingness to rapidly embrace the digital economy,” the letter said. “GameStop needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences – not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”

Throughout his letter, Cohen directly criticizes the company’s leadership – both its executive suite and its board of directors, to whom the letter is addressed.

GameStop CEO and board member George Sherman, “appears committed to a twentieth-century focus on physical stores and walk-in sales, despite the transition to an always-on digital world,” Cohen said, and the board lacks “the type of strategic vision” necessary for GameStop, “to pivot toward becoming a technology-driven business that excels in the gaming and digital experience worlds.”

That criticism appeared to have a major impact, as GameStop announced in early January that Cohen and two of his former Chewy lieutenants would become new members of the board. Soon after, Cohen was put in charge of a committee created to reshape GameStop and appointed the chairman of its board.

2. He’s swapping the company’s current leadership, both its board and c-suite, for former Amazon and Chewy leaders.

GameStop execs (April 2021)

Since Cohen joined GameStop’s board and was put in charge of the Strategic Planning and Capital Allocation Committee, the company’s entire executive suite has been cleared out.

That includes CEO George Sherman, who is stepping down in the near future, and CFO Jim Bell, who was suddenly forced out of his role at the company after the board of directors “lost faith” in him, according to a person familiar with the decision who spoke with Insider. At the same time, a gaggle of former Amazon and Chewy leaders have been elected in their place.

Similarly, the company’s board of directors is being completely flipped – at the company’s annual shareholder meeting in June, it plans to elect a small group of Cohen’s colleagues to the board. And Cohen is expected to be elected chairman of the board.

In the last six months, Cohen has completely reshaped the leadership of GameStop.

3. The potential future of GameStop: online trade-ins.

GameStop Clerk
A customer laughs with a clerk as he purchases a copy of the video game “Grand Theft Auto IV” at a GameStop store in New York

Game trade-ins, and their subsequent resale, are the lifeblood of GameStop.

In September 2020, when Cohen initially purchased a significant chunk of the company’s shares, he privately proposed a plan to the board to focus GameStop on e-commerce 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 (in)famous game trade-in program.

During those talks, he proposed a major expansion of GameStop’s online footprint, according to Bloomberg. Beyond just games, GameStop’s online store would offer “a wide range of merchandise,” the report said, and prioritize fast shipping.

Cohen has yet to publicly spell out his specific plans, and representatives repeatedly declined requests for comment.

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