SAN FRANCISCO (07/19/2000) - One-hour online delivery service Kozmo.com Inc. plans to announce Wednesday that Joseph Park will give up the title of CEO at the company he founded. He will retain a role as the chairman of Kozmo's board.
CFO Gerry Burdo will assume the role of acting CEO while the company searches for a permanent replacement.
The move comes at a critical juncture in Kozmo.com's evolution as it prepares for an expected initial public offering in September. The company missed an internal target to go public this past May because of unfavorable market conditions following April's stock market downturn. One source close to the company says that missing the initial target had kickstarted the discussions that led to Park's shift to chairman. The decision to have Park step aside was mutual, according to the same source.
"Now is the ideal time for Kozmo.com to be led by someone equally obsessed with serving our customers and serving the bottom line," said Park in a prepared statement.
Park, 28, founded the company in 1997 out of a Manhattan storefront on the Lower East Side with New York University college roommate Yong Kang. At first the company focused on delivering videotapes and DVDs in New York, but it has expanded to serve 10 major metropolitan markets, including Los Angeles, San Francisco and Washington, D.C.
In the process, Kozmo.com has raised about $250 million in financing from the likes of Amazon.com Inc. (AMZN) and Softbank Corp. It employs some 3,000 full- and part-time employees.
Burdo's ascension to the top spot at the company is designed to convince an increasingly skeptical Wall Street that the company has a long-term future.
Such persuasion is an uphill battle, at a time when even the staunchest defenders of companies like Amazon.com are questioning their economic viability.
"We are on a fast and disciplined track to profitability in all of our markets," said Burdo in a press release.
Burdo, who joined the company last November, most recently served as prinicipal financial officer at Ethan Allen.
Kozmo lost more than $26 million in 1999 on revenues of only about $3.5 million, according to regulatory filings.