Così closes restaurants, cuts staff in turnaround effortCosì closes restaurants, cuts staff in turnaround effort

Così Inc. has restructured operations and cut 11 employees while kicking off plans to close four restaurants — and perhaps more — as the struggling company works to rebuild its weak cash position, the fast-casual operator said this week.

The moves come despite improving sales at the Boston-based operator. Così same-store sales rose 0.7 percent systemwide in the fourth quarter ended Dec. 28, including a 2.1-percent increase in December, the company said Wednesday.

But the moves also come as Così works to rebuild its stock price after it received a delisting notice in November from the Nasdaq stock market. The company’s stock price has been below $1 since August and has been trading at around 50 cents per share since November.

Così closed a location in New York City earlier this month and plans to close another three units as part of a plan to “address” the bottom 25 percent of its locations, in terms of cash flow.

The company is also pursuing an exit strategy for six other locations and is “evaluating other options” for the remaining restaurants with struggling cash flow. Così has 109 units, 78 of which are company owned.

The restructuring and job cuts are expected to save $2.5 million in general and administrative costs this year, the company said.

Così CEO RJ Dourney said that the company expected to be at the “low point of its cash position” from early in the fourth quarter last year to the end of the first quarter this year.

As a result, Così “proactively implemented a disciplined cash preservation plan,” Dourney said in a statement. “We are making progress reducing our historical cash burn and positioning ourselves to continue with the next phase of the turnaround.”

“I am very pleased by the sustained progress in the profitability of our restaurants, the reduced G&A costs and the execution of our bottom 25 percent strategy,” he added.

Così has struggled for years with financial losses and a lack of cash.

The company reported an operating loss of $10.8 million in the first nine months of its 2015 fiscal year ended Sept. 28, slightly narrower than the $11.6 million operating loss the nine months the previous year. Its net loss was $12.1 million.

Così has never reported a profit. Going into 2015, its annual operating losses had been widening, from $3.1 million in 2010 to $15.8 million in 2014, according to SEC documents.

Under Dourney, Così has worked to rebuild sales. “Our focus on execution, guest service and marketing drove the comparable-store sales growth we expected in our corporate and franchised markets in the period and quarter,” Dourney said.

He noted that 30 percent of Così restaurants grew sales by double digits in December.

“I am excited about the momentum we have going into 2016, and the team remains focused on our disciplined approach to realize a successful turnaround,” he said.

Contact Jonathan Maze at [email protected].
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