GameStop says CEO George Sherman to resign; starts search for successor

Image: Reuters

GameStop Corp's George Sherman will step down as chief executive officer in the biggest shakeup at the video game retailer as it tries to shed its brick-and-mortar image and embrace an e-commerce model.

The videogame retailer's shares, which were at the heart of a Reddit-driven trading frenzy, jumped 7 percent in premarket trade on Monday after the company said Sherman would resign on or before July 31 and that it had started looking for a successor.

Reuters had earlier reported that GameStop's board was working with an executive headhunter on the CEO search and that its directors had spoken to potential candidates from gaming, e-commerce and technology sectors.

The latest development comes as Ryan Cohen, co-founder and former chief executive of online pet food company Chewy Inc, tries to tighten his grip on GameStop after joining its board in January.

Former Chief Financial Officer Jim Bell and former Chief Customer Officer Frank Hamlin are among the senior executives who have left the company in recent weeks.

GameStop has been in the process of transforming itself into an e-commerce firm that can compete with large-scale retailers such as Walmart Inc, as well as technology companies Microsoft Corp and Sony Corp.

Separately, Bloomberg News reported that the man known as "Roaring Kitty" on social media, whose online posts helped spark January's trading frenzy in GameStop, exercised call options on the stock to acquire 50,000 more shares at a strike price of $12.

GameStop earlier this month also increased the value of new stock it may sell from $100 million to $1 billion, as it moves to capitalize on a surge in its shares from the retail trader-driven rally in January.