Kozmo.com Reshuffles Top Management

Kozmo.com Inc., the largest delivery service for videos, food and other items ordered over the Internet, promoted its chief financial officer to president and acting chief executive as the company’s founders took on new jobs.

Gerry Burdo, 34, who joined the company in November as CFO, had been a principal financial officer at furniture maker Ethan Allen Inc.

Kozmo co-founder Joseph Park, 28, became chairman after serving as chief executive since helping launch the company in 1997. Co-founder Yong Kang, 27, is leaving his post as president to become vice chairman, the company said.

Kozmo has expanded rapidly into 10 markets, including Los Angeles, and filed for an initial stock sale to raise as much as $150 million. The offering has been delayed after many Internet retailers’ stock prices plunged in the last three months.

“Joseph felt he wanted someone in who would focus on the customers and the bottom line and that’s what Gerry will do,” said Michael Gordon, Kozmo spokesman.

Last month New York-based, Kozmo fired 24 people, or 5% of its salaried staff, to cut costs and streamline its operations.

Park, a former analyst in Goldman, Sachs & Co.’s corporate finance division, and Kang, a former assistant vice president at Societe Generale, formed the company with the idea of offering one-hour delivery of items it sold.

The company has raised more than $250 million in funding since then. Amazon.com Inc., the largest Internet retailer, invested more than $60 million in a 32% stake, according to a Kozmo filing with the Securities and Exchange Commission.

Starbucks Corp. also invested $25 million in an alliance with Kozmo. The coffee purveyor agreed to install Kozmo video drop-off boxes at its locations and undertake co-marketing promotions with the online company. As part of the accord, Kozmo agreed to pay Starbucks $150 million over five years, including $15 million this year and $25 million next.

Kozmo also agreed to deliver Starbucks products. It also sells and delivers best-selling books, snack foods, DVDs, magazines, over-the-counter drugs, CDs and video games.

The company opened for business in New York in March 1998 and has since expanded to Los Angeles, Seattle, San Francisco, Washington, Atlanta, Portland, Chicago, Boston and Houston.

It lost $26.4 million on sales of $3.51 million in 1999. It ended 1999 with 101,000 customers. It now has more than 300,000, the company said.