Should Potbelly's New CEO Take the Company Private?
After being without a permanent CEO since Aylwin Lewis left earlier this year, fast-casual restaurant brand Potbelly (NASDAQ: PBPB) recently named Alan Johnson as CEO. Now Johnson finds himself leading a struggling company. In August, interim CEO Michael Coyne noted that the company expects 2017 to be a tough year because of the "macro environment" after Potbelly reported a second-quarter same-store-sales decrease of 4.9%.
Under pressure from private-equity firm Ancora Advisors, Potbelly hired J.P. Morgan as a financial advisor to evaluate all aspects of the business. In the interim, the company continues to struggle operationally, having reported a comparable-store-sales decrease of 4.8% the following quarter.
Ancora's list of demands includes smaller, kiosk-style locations, a slowdown on unit development, and refranchising. In a letter to the board, Ancora notes: "If the board remains convinced that it now has the appropriate strategy in place, we would strongly urge it to immediately pursue a sale/going private transaction, as we do not believe the current strategy would be attractive for current or potential public/minority shareholders over any investable timeframe."
Source: Fool.com
