GameStop Corp. dismissed its chief operating officer Nir Patel, effective April 4.
Patel’s departure as GameStop chief operating officer occurred after he and the company reached a separation agreement, according to a filing with the U.S. Securities and Exchange Commission. The document states that GameStop will pay Patel a total of $102,646.68 in addition to equity awards he receives as part of the separation.
Patel joined GameStop almost two years ago in May 2022.
GameStop ranks No. 35 in the Top 1000. The database is Digital Commerce 360’s ranking of the largest North American online retailers. It falls under the Toys and Hobbies category.
Prior to GameStop, Patel was CEO at apparel chain Belk (No. 53 in the Top 1000) and senior vice president at apparel chain Kohl’s Corp. (No. 23). He has had roles at apparel retailers Lands’ End (No. 90), Abercrombie & Fitch Co. (No. 48), The Gap (No. 20) and mass merchant Target Corp. (No. 5).
Future of the GameStop chief operating officer role
The video game retail chain said its management team will absorb Patel’s responsibilities. As they do, the deprecation of the GameStop chief operating officer role echoes executive staffing trends elsewhere in the retail industry. The chief operating officer role in general may be in decline for retailers, says Paula Rosenblum, co-founder and managing partner at retail consulting firm RSR Research.
“Companies have become top-heavy and it’s not so clear why you need so many C-level executives,” Rosenblum says. “The COO job could easily be taken over by chief logistics officer or chief financial officer. It has just become superfluous.”
The end of Patel’s time as chief operating officer at GameStop could be part of the retailer’s existing plan to cut an undisclosed number of jobs to reduce costs as the gaming industry shifts to digital media from physical media. The company announced its layoff plans alongside declining earnings results. At the end of March, GameStop reported a 19% year-over-year net sales decrease for its fiscal Q4 2023 ended Feb. 3 and an 11% decrease for its 2023 fiscal year compared with the year before.
GameStop’s financial outlook
If revenue continues to decline by $150 million to $200 million per year, financial advisory firm Wedbush Securities says Gamestop may have trouble trimming costs fast enough to stem the growth of its losses, according to an advisory note.
“GameStop has a likely runway of no more than five years,” Wedbush analyst Michael Pachter wrote in the note.
GameStop is the top online seller of online toys and games, generating more than $2.27 billion in online sales in 2023, according to Digital Commerce 360. The merchant’s online sales increased 6.3% in 2023, according to Digital Commerce 360 estimates, and Digital Commerce 360 projects them to grow 4.5% in 2024.
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