Arsenal faced their latest setback under Arsene Wenger as they were knocked out of the FA Cup by Championship club Nottingham Forest. This has been a competition that has brought a lot of success for the Frenchman in recent seasons, but he made wholesale changes and the squad players couldn’t deliver the victory required.

There have been some on social media that have suggested it is a blessing in disguise, but it is another example of how the club have declined in comparison to the rest of the top six. Their squad players should have had enough quality to overcome Forest, but they didn’t and that underlines the need for reinforcements during this window.

The club already knows that Mesut Ozil and Alexis Sanchez are likely to leave in the summer, if not before. Currently, they don’t have enough quality in their squad and they are set to lose their best two players in the next six months. Arsenal are headed towards a talent crisis and the complete inaction from the club to prevent it is a huge worry. They should have made movements to correct this last summer, but they didn’t and it has put even more pressure on this month.

It is clear to everyone that the Gunners are the top-six most in need of January investment, but there is a concern that the club may continue to ignore the obvious. They have done so in the past and if they do it again, they will risk losing their top-six status. There would be a real chance that they would fall behind the pace and that would be difficult to recover from in the modern era, due to the importance of the Champions League to a top club.

Against Forest, Arsenal decided to bring in a number of squad players. Arsene Wenger has seemed reluctant to regenerate his squad. There have been similarities drawn between the Frenchman and Sir Alex Ferguson, but he doesn’t share the Scotsman’s ability to keep a squad fresh. That was one of the keys of marrying longevity and success. The current Gunners’ boss has managed to achieve both, but they are no longer achieving the latter and today indicated why.

The likes of Theo Walcott, Danny Welbeck, Per Mertesacker and Mathieu Debuchy have little to offer a top-six club any more. A more ruthless manager would have got rid of them a long time ago, but Wenger has kept them around. It can be argued that Debuchy especially has been available for transfer for the past few windows, but he is always offered a route back to the first team and it is too comfortable at Arsenal to agree to an exit.

That is the major problem at Arsenal. They don’t have an elite mentality and that stems from the manager. If he had been more ruthless, the Gunners could have maintained a position at the top of the division. Now, they are simply afterthoughts and continue to regress season on season. No top club would have been desperate to keep Ozil and Sanchez deep into their final years on their contracts. No player should be bigger than the club, but that doesn’t ring true at Arsenal, as this gives the impression that they can’t cope without either player.

Wenger now has one final chance. A major squad rehaul is needed and although it would be unwise to complete it mid-season, they need to start making movements to facilitate a changing of the guard. Players like Theo Walcott and Mathieu Debuchy can be moved on, while long-term replacements for Ozil and Sanchez can be sourced. Riyad Mahrez is reportedly available and he would be a great capture for the club. If Arsenal don’t make a single signing this month, it will be another chapter in their decline as a top-six club.

MORE TRANSFER NEWS AND GOSSIP….

Manchester City are set to make a fresh bid for Arsenal forward Alexis Sanchez, 29, and believe the Gunners will allow the Chilean to leave this month. (Guardian)

Sanchez is ready to forgo a possible £25m signing-on fee to ensure he joins Manchester City this month. (Sun)

Arsenal will let Sanchez leave if they receive close to £30m and would want a deal to be completed early enough to allow them to sign a replacement. (Mirror)

Sources close to Sanchez believe he could be a Manchester City player within a week. (Independent)

Arsenal have made Monaco forward Thomas Lemar, 22, their number one target to replace Sanchez, having missed out on the Frenchman in the summer.(Mirror)

Monaco manager Leonardo Jardim has not ruled out selling Lemar this month. (L’Equipe – in French)

Arsenal and Liverpool are interested in Barcelona and Croatia midfielder Ivan Rakitic, 29, who wants to leave following the arrival of 25-year-old playmaker Philippe Coutinho. (Diariogol – in Spanish)

Liverpool have dismissed claims from Barcelona that Coutinho’s £142m move only happened because they cut their original asking price for the Brazilian. (Times)

French midfielder Francis Coquelin, 26, could depart Arsenal this month, with West Ham interested in the midfielder. (Mirror)

Valencia are also in talks with Arsenal over Coquelin. (Cadena Ser – in Spanish)

Chelsea have stalled on a move for Juventus’ Brazil international Alex Sandro, 26, because the Italian club want about £60m for the full-back. (Telegraph)

Tottenham and England striker Harry Kane, 24, says he is happy at the club but they must start to win trophies in order to keep him. (Star)

Leicester are willing to allow striker Kelechi Iheanacho, 21, to leave this month, despite only signing the Nigerian in August for £25m. (Sun)

West Ham are interested in Anderlecht’s £20m-rated Belgium midfielder Leander Dendoncker, 22. (Nieuwsblad – in Belgian)

West Ham are closing in on Newcastle and England midfielder Jonjo Shelvey, 25, in a £12m deal. (Express)

Juventus will not sign Lazio midfielder Sergej Milinkovic-Savic, 22, as Paris St-Germain are willing to pay up to 170m euros (£150m) for the Serb, who also interests Manchester United. (Il BiancoNero – in Italian)

Newcastle will let Serbia striker Aleksandar Mitrovic, 23, leave in January but will want to recoup most of the £13m they paid for him 18 months ago. (Chronicle)

Championship club Cardiff City are interested in signing 27-year-old English striker Gary Madine from Bolton. (Wales Online)

Swansea are among the clubs interested in Fulham’s English full-back Ryan Fredericks. The 25-year-old is out of contract at the end of the season and could be available for about £3m.

Derby County are in talks with manager Gary Rowett over a new contract. The 43-year-old is being considered as a successor to Mark Hughes at Stoke. (Telegraph)

Wolves have offered free coach travel to all supporters heading to their FA Cup third-round replay at Swansea after a goalless draw at Molineux on Saturday. (Express and Star)