Potbelly Corp. has closed 16 restaurants permanently and halved the number of potential closures because of fruitful discussions with landlords, the company said Wednesday.
The Chicago-based fast-casual sandwich chain, in releasing second-quarter earnings, said, “The company continues to have constructive discussions with its landlords, resulting in 16 permanent shop closures and 187 leases renegotiated as of early August.”
In May, Potbelly said it was considering the permanent closure of as many as 100 of its more than 400 units because of lease obligations as it struggled with coronavirus restrictions.
“The number of potential permanent store closures has been reduced to fewer than 50,” the company said in a statement.
Steve Cirulis, Potbelly’s chief financial officer, said the second quarter was challenging with the coronavirus pandemic’s restrictions.
“Our team rapidly adapted to the new operating environment,” Cirulis said in a statement. “We preserved cash, leveraged our strong off-premise platform, innovated with new offerings, reset our real estate portfolio and enhanced the safety of our shops for both employees and customers.”
Cirulis said conversations with landlords had “made significant progress,” leading to the reduced target for closings.
In July, Potbelly named Robert Wright, former chief operations officer at the Dublin, Ohio-based Wendy's Co., as the sandwich brand’s new president and CEO. He succeeded Alan Johnson in the position.
For the second quarter ended June 28, Potbelly’s loss widened to $22.2 million, or 93 cents a share, from $1.9 million, or 8 cents a share, in the same period a year ago. Revenues fell 46.8% to $56.2 million from $105.6 million in the prior-year quarter.
Same-store sales simproved throughout the quarter, from the late March low of down 68%, to a decline in the mid- 20% range throughout June.
As of June 28, Potbelly had 468 restaurants, including 44 franchised units. Potbelly was founded in 1977.
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