GameStop Remakes C-Suite, Board in Turnaround Push

The company named Mike Recupero, a 17-year Amazon veteran, as finance chief. The CFO position has been filled on an interim basis since

Jim Bell

stepped down in March.

Mr. Furlong is slated to join GameStop June 21 and Mr. Recupero on July 12.

The appointments, which also came as the company reported stronger-than-expected sales in the most recent quarter, mark a new strategic direction. Mr. Cohen, co-founder of online pet supplies retailer Chewy Inc., has spent seven months pushing for GameStop to move faster into e-commerce and away from its bricks-and-mortar roots, among other initiatives. All the while, the company has been at the center of a monthslong, social-media-fueled trading frenzy that has drawn the curiosity of individual investors, Wall Street firms and regulators.

Mr. Cohen, who was elected chairman at GameStop’s annual shareholder meeting Wednesday, said the company has a lot of work to do to turn itself around and doesn’t plan on telegraphing its strategy to competitors.

“You won’t find us talking a big game,” said Mr. Cohen, speaking remotely to an audience gathered at GameStop’s Texas campus. The shareholder meeting was closed to the media. The Wall Street Journal was told of his comments from those in attendance.

The 35-year-old Chewy Inc. co-founder is chairman of a smaller, reshaped board of directors as a majority of the incumbents resigned. Mr. Sherman, the soon-to-depart CEO, was elected to the board along with three people with ties to Mr. Cohen through Chewy, the company he sold to PetSmart Inc. in 2017 for $3.35 billion.

GameStop’s share price ballooned after Mr. Cohen joined the board in January, with some investors believing the entrepreneur’s past success with the online pet-supplies retailer could help GameStop. That rally was also fueled by a so-called short squeeze, when rising prices prompted bearish investors to buy back shares they had sold short to cut their losses. Shares crested that month at $483 in intraday trading, but later tumbled to around $40 in mid-February and have fluctuated since.

The stock closed Wednesday at $302.56, up less than 1% for the day and about 6,000% from a year ago. After market close, GameStop shares fell 6% as the company said it could sell up to five million shares in a new equity offering.

Unlike executives at other meme-stock companies such as

AMC Entertainment Holdings Inc.,

AMC -10.37%

GameStop leaders have mostly shied away from discussing the share price rally, which was the subject of a congressional hearing in February. On GameStop’s earnings call in March, Mr. Sherman was the only company executive to speak, and he didn’t take questions from analysts. GameStop said in an April securities filing that recent stock price fluctuations have been “unrelated or disproportionate” to its operating performance.

Mr. Cohen said Wednesday that the company was fortunate to have such a special group of investors holding its shares. “You guys inspire us to think bigger, fight harder and work longer each day,” he said, adding that the investors have ushered in a whole new era at GameStop.

Mr. Sherman was the only board member physically present at Wednesday’s meeting; the other board members dialed in. About 200 people were in attendance.

Damien Browne, an accountant for a large technology company who owns about 4,000 shares in GameStop, said he drove more than three hours from his home in Austin, Texas, to attend the event. He turned the excursion into a family vacation with his wife and two children, staying in a hotel in nearby Dallas.

“He’s fighting a war against people trying to destroy the company,” said the 36-year-old, referring to Mr. Cohen and short sellers, respectively.

After the meeting, Mr. Browne said he gathered with dozens of other shareholders at a restaurant and bar where they swapped stories about their investing experiences with GameStop. He said he was greeted in the parking lot by a man handing out red headbands like the kind that famed individual investor Keith Gill is known for sporting. Mr. Gill is credited with helping to launch the trading frenzy and was among those called to testify on the matter at a February congressional hearing.

“The folks here are as hyperfocused on the company as I’ve been, so it’s nice to share the same level of interest,” said Mr. Browne.

Mr. Cohen first disclosed a position in GameStop in August and kicked off his campaign a few months later with a letter to the company’s board saying that the retailer’s bricks-and-mortar-focused business model was outdated and lagged behind the broader industry. He has since pushed for GameStop to become more technology-centric with competitive pricing, a broad selection of products, fast shipping and strong customer service. But he hasn’t shared specifics on his strategy for achieving those goals. He holds a roughly 13% stake in GameStop, a position valued at about $2.7 billion as of Tuesday.

The company has been overhauling its leadership for months. It recruited former Amazon executive Jenna Owens as its new operating chief, and hired its first chief technology officer,

Matt Francis,

also a former Amazon executive. The retailer’s chief financial officer, chief customer officer and chief merchandising officer have all departed in recent months.

GameStop’s road to recovery will require overcoming long-running shifts in how people play and buy videogame software. People are increasingly downloading games over the internet and accessing them through subscription services such as

Microsoft Corp.’s

MSFT 0.40%

Xbox Game Pass. Software developers have also been releasing more free-to-play games, eroding a source of revenue for the company.

Videogame software and hardware makers posted strong financial results over the past year as the pandemic prompted people to turn to online games for safe, social entertainment. But it also forced GameStop to temporarily—and in some cases permanently—close hundreds of its locations. More recently, shortages of the newest consoles from

Sony Group Corp.

SONY -1.90%

and Microsoft have hampered hardware sales.

For the most recent quarter, GameStop said sales grew 25% from a year earlier to $1.3 billion. The company narrowed its quarterly loss to roughly $66.8 million from $165.7 million a year earlier.

GameStop recently teased plans to launch an initiative around nonfungible tokens, or NFTs. A spokesman declined to comment on what the program is expected to entail.

—Caitlin McCabe contributed to this article.

Write to Sarah E. Needleman at [email protected]