Editing GameStop (section)

===NeoStar Retail Group (1994–1996)===
Babbage's merged with Software Etc., an [[Edina, Minnesota]]–-based retailer that specialized in personal computing software, to create NeoStar Retail Group in 1994.<ref name=":5">{{Cite news |last=Jones |first=Kathryn |date=1994-08-26 |title=COMPANY NEWS; Two Software Peers Combine Their Specialties |url=https://www.nytimes.com/1994/08/26/business/company-news-two-software-peers-combine-their-specialties.html |access-date=2025-05-23 |work=The New York Times |language=en-US |issn=0362-4331}}</ref><ref>{{cite news | url=https://www.baltimoresun.com/news/bs-xpm-1994-08-26-1994238025-story.html | title=Babbage's Inc. merging with Software Etc. | work=[[The Baltimore Sun]] | date=August 26, 1994}}</ref> The merger was structured as a [[stock swap]], where shareholders of Babbage's and Software Etc. received shares of NeoStar, a newly formed [[holding company]]. Babbage's and Software Etc. continued to operate as independent subsidiaries of NeoStar and retained their respective senior management teams.<ref name=":5" /> Babbage's founder and chairman James McCurry became chairman of NeoStar, while Babbage's president Gary Kusin and Software Etc. President Daniel DeMatteo retained their respective titles. Software Etc. chairman [[Leonard Riggio]] became chairman of NeoStar's executive committee.<ref name=":5" />

Gary Kusin resigned as president of Babbage's in February 1995 to start a cosmetics company. Daniel DeMatteo, formerly president of Software Etc., assumed Kusin's duties and was promoted to president and [[chief operating officer]] of NeoStar. NeoStar chairman James McCurry was also appointed to the newly created position of NeoStar CEO.<ref name="wallstreet95">{{cite news|title=NeoStar Retail Group Inc.|date=January 31, 1995|work =The Wall Street Journal}}</ref> The company relocated from its headquarters in Dallas to Grapevine later that year.<ref>{{cite news|title=NeoStar moving to Grapevine
|date=October 24, 1995
|author=Steve Brown
|work=The Dallas Morning News}}</ref>

NeoStar merged its Babbage's and Software Etc. units into a single organization in May 1996 amid declining sales. Company president Daniel DeMatteo also resigned, and NeoStar chairman and CEO James McCurry assumed the title of president.<ref>{{cite news| url=https://www.wsj.com/articles/SB832899156432040000 | title=NeoStar Merges Units And Ousts Executives Amid Weak Quarter | work=[[The Wall Street Journal]] | date=May 24, 1996 | url-access=subscription}}</ref> In September of that year, after NeoStar was unable to secure the credit necessary to purchase inventory for the holiday season, the company filed for [[Chapter 11, Title 11, United States Code|Chapter 11]] bankruptcy and appointed [[Thomas G. Plaskett]] chairman while James McCurry remained company chief executive and president.<ref>{{Cite news |last=Journal |first=Carlos TejadaStaff Reporter of The Wall Street |date=1996-11-12 |title=NeoStar to Stop Stocking Stores, Plans Their Sale |url=https://www.wsj.com/articles/SB847730979436521500 |access-date=2025-05-23 |work=Wall Street Journal |language=en-US |issn=0099-9660}}</ref>

The leadership changes were not enough; in November 1996, the assets of NeoStar were purchased for $58.5 million by [[Leonard Riggio]], a founder of Software Etc. and chairman and principal stockholder of [[Barnes & Noble]]. [[Electronics Boutique]] had also bid to purchase NeoStar, but the judge presiding over NeoStar's bankruptcy accepted Riggio's bid because it kept open 108 stores more than Electronics Boutique's bid would have. Approximately 200 retail stores were not included in the transaction and were subsequently closed.<ref>{{Cite news | url=https://www.bizjournals.com/dallas/news/2016/05/03/gamestop-co-founder-retiring-next-month.html | title=GameStop co-founder retiring next month | first=Korri | last=Kezar | work=[[American City Business Journals]] | date=May 3, 2016 | url-access=registration}}</ref>