Cosė Inc. Signs Agreement With Brad Blum To Consult.

Friday, March 09, 2012

Cosė Inc. said it signed an agreement with former activist investor and restaurant veteran Brad Blum to consult on branding, product development, merchandising and marketing for the struggling fast-casual bakery brand.

The pact signals an armistice in Cosė's months-long tussle with Blum and his Blum Growth Fund, which holds 3.5 million shares, or about 6.8 percent, of Cosė's outstanding stock. Blum said he was changing his status to "passive shareholder" from activist.

The open-ended consulting agreement came after Carin Stutz, who in December was named president and chief executive at the Deerfield, Ill.-based Cosi, which operates or franchises 136 locations, sought a meeting with Blum.

"I just wanted to see if I could make him an ally," Stutz said. "I didn't want the distraction for me or for Cosė. ... I really wanted to make sure our team was spending all of our energies and focus on turning Cosė into a profitable business." The planned hour-long meeting expanded into three hours, Blum said.

"When we spent the three hours there at the Cosė in New York City and talked with people on her staff, I listened to what she thought could be done better. There really was an alignment particularly around the idea of simplifying and streamlining the guest experience." In the fall, Blum and other investors had pressured Cosė to make leadership changes. Blum, a former top executive at Burger King, Olive Garden and Romano's Macaroni Grill, had even volunteered at one point to serve as Cosė CEO for a $1 annual salary.

Stutz said Blum's consulting agreement will focus on several key initiatives, including brand strategy, marketing and culinary.

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