Dive Brief:
- Potbelly appointed Robert D. Wright as president and CEO effective July 20, succeeding Alan Johnson, according to a company press release.
- Wright has over 30 years of experience in the restaurant industry and most recently served as EVP and chief operations officer at The Wendy’s Company. In this role he ran operations for over 6,000 company and franchise restaurants in the U.S. and Canada. Prior to this role, he served in various executive positions at Charley’s Philly Steaks, Checker’s Drive-In Restaurants and Domino’s Pizza.
- In his new role, he will focus on accelerating the company’s ongoing business turnaround, including improving on- and off-premise guest experience, enhancing brand positioning and reviewing the company’s cost structure and asset base.
Dive Insight:
Potbelly’s CEO change comes as the novel coronavirus pandemic removed any improvements the chain was making after years of struggling to grow same-store sales. Q4 2019 was its best performing quarter in over three years, and the chain originally expected to grow comp store sales by 0.5% to 2% in 2020. Instead, its same-store sales declined 68% in March, improving to a negative mid-20% range by the end of May. The company said in May it was unsure it would meet its financial obligations within a year and said it was considering closing up to 100 poor performing stores.
While the company didn't say why Johnson was leaving and what, if any, future he has with the brand, CEO changes for struggling brands are common. Jack in the Box named a new CEO earlier this year, following a failed sale and ongoing pressure from activist investors and franchisee operators. Red Robin, which had been under scrutiny by an activist investor for the better part of a year, hired a new CEO in September after the retirement of CEO Denny Marie Post. Subway, which has grappled with years of same-store sales slumps and a contentious relationship with franchisees, hired a new CEO in November after a year-long search.
For Potbelly, discontent with its largest shareholder, 180 Degree Capital, was growing in June after the investor called the chain’s stock performance “dreadful” and its lack of performance was “unacceptable and clearly indicates new approaches are necessary.”
Wright brings experience in brand transformation and revitalizing topline sales through marketing, systemwide service standardization and quality initiatives, according to the press release. This experience could be what the chain needs to create a better strategy and improve its performance, but like many chains, much of its future will depend on the pandemic.
