CHICAGO — On a morning visit to a Così in Chicago, chief executive officer Carin Stutz, who joined the company in January, greeted incoming patrons and boasted a little about the floor.
"I remember walking in here one time and thinking these floors were filthy — and now look at 'em. They're spotless," she said. "You've got to scrub floors."
Stutz, 55, is attempting a dramatic turnaround at the troubled fast-casual chain known for its Signature Salad and Tuscan Pesto Chicken flatbread. On the broader level, too, Stutz is also wrestling with a perilously low stock price. On Wednesday, Così stock closed at 83 cents, and the company said last week it had received its third delisting notice in as many years. The chain has until Nov. 21 to get its stock price above $1 for 10 consecutive business days or be dropped from the Nasdaq. Così's 2002 initial public offering was priced at $7.
Under Stutz, company stock rose above $1 in March, only to drop in April after news of her plan to raise $15 million from shareholders to update restaurants and get the chain growing again. Analysts have complained the move would dilute shareholder value too much.
It has been a tumultuous year for Così, a 135-unit chain with locations in Lexington, that went from hot commodity to has-been in less than a decade.
Stutz is no apologist for the restaurants, where she believes waits are too long, the menu is too complicated and operations need improvement. She's trimming the menu, simplifying the ordering process and looking for a new chef to make the menu more innovative.
"A lot of times, somebody sits in this office and creates things for the restaurant, and they don't think about the implication that it has," she said. "That's why, when I got here ... I came in, I met the team and I said, 'I'll see you in five weeks' — because I wanted to go learn the business."
Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant industry consulting and research firm, described Così as "really far behind" competition like Panera Bread, Corner Bakery Cafe, Au Bon Pain and even Bruegger's.
Growth in the fast-casual segment — where there is generally no table service but where prices are higher, food is prepared to order and decor is more upscale than at traditional fast-food restaurants — has been outpacing the overall restaurant industry. In 2011, sales in fast casual increased 5.2 percent, to $17.5 billion, while total restaurant industry sales increased 2.5 percent, to $370 billion.
Tristano pointed to other "first-generation" fast-casual players that "continue to fail," like Boston Market and Fudd ruckers.
"You could consider those to be first-generation fast-casual concepts that peaked and then declined and lost relevance," he said. "Così appears to be headed in that direction."
Così reported first-quarter earnings last month, narrowing its net loss by nearly half, to $1.13 million from $2.14 million the year before.
William Koziel, Così's chief financial officer, who has been with the company since 2004, described his new boss Stutz as "a breath of fresh air."
"What she's brought for us has been a renewed focus on the business," he said. "She clearly has a sense of urgency."