Così's battle with Blum escalates
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On Sept. 27, Blum, who owns 6.8 percent of Così’s shares through his investment fund, BLUM Growth Fund LLC, sent a letter to shareholders calling for a new board of directors and offering his services as chief executive and chairman for an annual salary of $1. Blum, who ran Olive Garden in the ’90s and Burger King Holdings before its 2004 initial public offering, called on Così to improve service and cleanliness, as well as to pare down its menu and focus on food quality.
Interim Così chief executive Mark Demilio fired back in his own letter to employees and franchisees, writing that Blum “wants our board of directors to hand the company over to him for free — something the board cannot and would not ever do.” Demilio added that Blum’s “strategic and operational suggestions represent no new ideas.”
“In fact,” Demilio’s letter said, “in the course of the company’s strategic planning over the years, we had previously considered the actions outlined by Mr. Blum and are already undertaking those that, in our business judgment, are reasonable to pursue.”
Demilio also touted the current board’s progress in driving sales through catering, online ordering and restaurant remodels. And he added that Così Inc. has retained executive search firm The Elliot Group to find a replacement for former chief executive James Hyatt, who is now chief executive of Church’s Chicken.
Blum responded with a letter on Oct. 3, writing: “You must now cease and desist from making these types of inflammatory and grossly incorrect statements to mislead the very people who have suffered under your leadership. It appears you are trying to pacify people and buy time while you continue to turn out meager results.”
Read more: http://nrn.com/article/cos%C3%ACs-battle-blum-escalates?ad=news#ixzz1aTfGGV5T
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