(Bloomberg)—GameStop Corp. CEO Michael Mauler abruptly stepped down after just three months on the job, bringing fresh upheaval to a retailer that’s struggling to revive growth.
The board appointed Daniel DeMatteo, GameStop’s 70-year-old co-founder, to run the business while it searches for a new leader. Mauler resigned for personal reasons, the company said, and he isn’t entitled to severance or other separation benefits.
“Given my tenure and familiarity with the company and our associates, it’s a natural step for me to assume this role and guide the business at this time while the board searches for a permanent CEO,” DeMatteo said in a statement.
The company, which is the largest independent retailer of video games, is struggling to adapt to a world where software is often delivered online. As part of its comeback efforts, GameStop has ramped up its e-commerce operations and added more toys and collectibles. It also acquired hundreds of AT&T wireless stores in 2016 to help reduce its dependence on video games.
In the past year, the company has been retrenching. It sold Kongregate, a mobile game publisher and plans a sale of its Cricket prepaid wireless stores.
Mauler’s quick exit follows another shake-up in February, when the video game retailer fired two high-ranking executives: chief operating officer Tony Bartel and executive vice president Michael Hogan. Others have left, including human-resources head Mike Buskey, chief information officer Michael Cooper and chief marketing officer Randy Gier. The moves follow the death of longtime CEO Paul Raines, who took a medical leave in November and died in March.
GameStop disappointed investors with its profit outlook earlier this year, extending a long slump for the stock. The shares fell anew on Friday after the CEO change, tumbling as much as 4.3% to $12.47.
“We were very surprised by Mauler’s resignation, particularly given the facts he had been CEO for just over three months, and GameStop ‘cleaned house’ by firing Bartel and Hogan in conjunction with Mauler taking the top spot,” Anthony Chukumba, an analyst at Loop Capital Markets, said in a note. “Management turmoil is the last thing GameStop needs.”
The management change probably won’t bring an immediate strategy change, Robert W. Baird analyst Colin Sebastian said in a note. But it may push the board to consider strategic alternatives.
The stock reaction suggests investors don’t have “much confidence in the current operations,” he said.
GameStop is No. 40 in the newly released Internet Retailer 2018 Top 1000.
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