GameStop’s new CEO resigns for ‘personal reasons’

GameStop has a new interim chief executive officer. No, a different new one. Daniel DeMatteo has stepped up into that role after Michael Mauler resigned from that position after the board appointed him only three months ago. Mauler is leaving for unspecified “personal reasons.”

Mauler took over as CEO in February from DeMatteo, who was acting as interim CEO at that point as well. Former and longtime chief executive J. Paul Raines had taken leave for health reasons throughout 2017. GameStop’s board appointed Mauler after Raines made it clear that he would not return to the world’s largest gaming-focused retailer. Raines died in March.

DeMatteo has worked as an executive at GameStop since 1996. He’s familiar with the company, has worked as its CEO before, and he should maintain the company’s business model without missing a beat. In a public relations statement, DeMatteo tried to assure investors that they shouldn’t worry about this change due to the continuity of leadership in other roles like chief financial officer Rob Lloyd.

“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,” said DeMatteo. “I’m happy to have Rob Lloyd, our CFO, and his 22 years of experience with GameStop alongside me as we work towards executing against our 2018 objectives.  We continue to believe in GameStop and the many passionate associates that drive our business and are encouraged by the opportunities ahead of us.”

Analyst Colin Sebastian at financial-services firm R.W. Baird wrote in a note to investors that he isn’t worried that this executive turnover is detrimental to the company’s outlook.

“We don’t believe the CEO change will impact strategic direction,” wrote Sebastian. “Given that Mr. Mauler was in the CEO position for such a limited period of time, we do not expect any material near-term changes to the company’s operating strategy.”

GameStop is already in the tough business of operating a brick-and-mortar operation in an entertainment industry that is increasingly digital. The company has found success by selling digital codes and cards to customers as well as diversifying into memorabilia with its acquisition of novelty toy company ThinkGeek.

The company reported year-over-year growth for its fiscal Q4 due in part to sales of the Nintendo Switch and its software, but the company predicted same-store sales would drop 5 percent in fiscal 2018. That’s a worrying indicator for many investors, and Sebastian thinks Mauler’s resignation could provide the company a chance to try something different.

“GameStop continues to manage the challenged video game category with a focus on optimizing store operations, expand the collectibles category, and stabilize the tech brands segment,” wrote Sebastian. “We would also note that another CEO transition could push the board to review or consider strategic alternatives, in particular with shares not reflecting much confidence in the current operation.”