BLUM Growth Fund, LLC today announced it is leading an effort to SIGNIFICANTLY improve company performance and GREATLY increase shareholder value at Cosi (NASDAQ:COSI).
The BLUM Growth Fund proposal calls for a NEW BOARD OF DIRECTORS with proven ability to lead the company to strong profitability. On September 15th, BLUM Growth Fund filed form 13D with the Securities and Exchange Commission (SEC), indicating it has increased its ownership position in Cosi to nearly 7%.
BLUM Growth Fund maintains shareholder concerns center around the company’s poor performance under a long tenured board that can claim few successes. In its 9-year history as a public company, Cosi has never turned a profit and the company has endured a 95 percent reduction in stock price under 4 out of the 5 current board of directors. Shares were listed at $11.21 per share in March of 2006, and have been listed as low as $0.56 on September 12th of this year.
These issues culminated in the recent notification from NASDAQ that the stock is in danger of being delisted. The Cosi board of directors also recently accepted the resignation of former CEO James Hyatt. The current chairman of the board, Mark Demilio, assumed the position as interim CEO. Demilio has no prior restaurant or restaurant turnaround experience.“Cosi is a publicly traded company. In the interest of protecting the investment of all involved, we must recommend a change in the board of directors, a change in philosophy and a new leadership focus,” said Brad Blum, founder and CEO for BLUM Growth Fund. “We call upon all shareholders to join us in our efforts to effect positive change at Cosi and participate in a non-legally binding expression of ‘no confidence’ for the current board. This is not a proxy fight or a hostile takeover, but an exercise in shareholder democracy.” Blum has led the successful turnaround of several major restaurant brands, serving as chief executive of Olive Garden for eight years. He orchestrated a thorough transformation of the brand, with 33 consecutive quarters of same-restaurant sales increases, and increased profitability by hundreds of millions of dollars per year. During his tenure as CEO of Burger King, profits doubled in the first year. He and his team turned same-restaurant sales positive by introducing a new $1 billion product, setting the stage for a record-breaking IPO.