New executive hires prime Potbelly for a turnaround
- Chicago-based sandwich chain Potbelly has named Thomas Fitzgerald as its new chief financial officer. Fitzgerald comes from retailer Charming Charlie, where he served as president and CEO. He previously worked with Sears Canada, Burlington Coat Factory and Bath & Body Works. He replaces Michael Coyne, who resigned in September, according to Restaurant Business.
- The company also recently hired CMO Brandon Rhoten, promoted Julie Younglove-Webb to chief restaurant operations officer and named Ryan LaRoche, a former executive sous chef at a Michelin-starred Las Vegas restaurant, to VP of culinary innovation.
- Potbelly has had mixed financial results. Its same-store sales decreased 0.2% during Q3, but traffic jumped 850 basis year over year, outperforming the broader industry within its markets, CEO Alan Johnson said in a press release on its Q3 results released early November.
The key to Fitzgerald’s hire may very well be his experience in multi-unit retail companies and in turnaround strategy, which Potbelly may be in need of after quite a few tumultuous years. The chain filed for its IPO in August 2013 and came out of the gate hot with a $75 million valuation. Shares peaked at about $30 shortly after, but they have since hovered in the low teens and even briefly dipped into the single digits last year.
Potbelly has navigated a number of challenges, including an intensely competitive sandwich category. According to Technomic, the number of fast casual sandwich chains with more than $50 million in annual sales increased 70% to over 7,500 in the past five years.
Activist investors pressured the company to make changes or sell earlier this year, but Potbelly did not receive a viable offer, according to Restaurant Business. Now the company’s on its own to correct its issues and, to start, is focused on menu simplification (Potbelly’s menu now has 115 items at 66 different prices), customer-facing technology and marketing.
Fitzgerald will be charged with ensuring the pieces are in place for the latter by opening up the company’s marketing budget and handing the keys over to new CMO Brandon Rhoten to bring the brand into the conversation. If the budget is there, Rhoten, who came from Papa John’s, has a pretty solid runway, recently telling Digiday, "Potbelly's a brand that hasn't advertised with any significant scale to this point, and that's a wonderful thing from a marketing standpoint … we don't have an expectation."
So far, Potbelly is clearly focused on digital and social platforms, taking a sassy tone and even running a promotion on Reddit that generated 2.8 million unique impressions. This unusual approach so far seems like a clear differentiator in the fast casual sandwich space.
- Restaurant Business Thomas Fitzgerald Named Potbelly CFO
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