Gamestop GME (NYSE), the red hot video game retailer, has taken tangible steps to handle its tremendous growth and effectively deal with its growing international expansion. Earlier in the month the company reported outstanding results. According to a recent report by Zacks,
(Gamestop’s) second quarter sales were $104 million above the consensus forecast, and EPS beat the consensus estimate by $0.04, which is about 19x our 2009 EPS estimate.
Yesterday the company announced it would split the chairman and CEO positions.
An unusual change for a company performing so well. The company has recognized that to go to the next level it would need to improve its bench and delegate more authority (see press release). The longtime chairman and CEO, R. Richard Fontaine who has maintained his dual role since 1996 agreed to give up his CEO position and remain as chairman. In his place, the company promoted Daniel A. Matteo the chief operating officer. According to an AP story that appeared inForbes,
As part of the changes approved by the board, R. Richard Fontaine, chairman and CEO since the company’s inception in 1996, will relinquish his CEO title to the company’s operating chief, Daniel A. DeMatteo, 60, who has been the chief operating officer since 1996 and vice chairman and COO since 2004.Fontaine, 66, will focus on international operations, acquisitions and strategic development as executive chairman…. In addition, J. Paul Raines, 44, the former executive vice president of U.S. stores for The Home Depot Inc. will become the company’s new COO, effective Sept. 7.
Gamestop seems to be way ahead of the curve when it comes to management change and corporate functioning. The management changes make a great deal of sense and should serve the company well as its moves forward. Keep a close eye on the company.
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