CHICAGO (CBS) -- The Chicago-based Potbelly Corporation warned that it may have to close up to 100 of its sandwich shops as it suffers during the coronavirus pandemic.
In the first quarter of 2020 – only the end of which overlapped with the pandemic hitting the U.S. – total revenues were down more than $10 million, Potbelly said in a news release. Company-owned comparable store sales were down 10.1 percent.
Potbelly president and chief executive officer Alan Johnson said the pandemic "arrested the strong turnaround momentum" that the company had launched in the fourth quarter of 2019.
"The pandemic dramatically impacted our sales and oriented our priorities first around the health and safety of our employees and customers, and second, toward aggressively protecting our balance sheet. In March, as we abruptly saw our comparable same-store sales drop to -68%, we took immediate and decisive action. Among other things, we shut down dine-in options across our shops in accordance with state mandates, temporarily closed 36 company-operated shops, furloughed one-third of our corporate employees and cut salaries for all executives and corporate employees by 25%," Johnson said in a news release. "All of these decisions were necessary and painful."
Potbelly has kept its shops open for pickup and delivery and is operating with a "cash preservation mindset," Johnson said in the release.
"Currently, we are having proactive conversations with our landlords, are considering closing up to 100 shops, and are continuously working to implement ways to work more effectively and efficiently," Johnson said. "We have a firm grasp on what we can control within our business."
Johnson said the company looks forward to a time when dine-in customers are again allowed, and in the meantime is focusing on curbside pickup, digital efforts, and other innovations.
"We are seeing encouraging signs of recovery in our business as we move through the second quarter," he said in the release. "We are shaping our post-pandemic future by the actions we are taking now, and we will not allow this virus to determine our success."
Potbelly currently has 440 locations.
The company took heat for accepting $10 million as part of the Paycheck Protection Program that was geared toward protecting employees of small businesses - and then returned the money after public outcry.
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