Struggling sandwich chain Potbelly Sandwich Shop has raised about $16 million in funding and boosted its credit facility, the Chicago-based chain announced Wednesday.
The $16 million comes from the sale of Potbelly stock, in a deal that is slated to close Friday. The proceeds will be used for working capital and “general corporate purposes,” the operator said in a press release.
Under the new credit agreement with its bank, Potbelly will have a $25 million revolving credit facility that matures in January 2023.
“Today is a great day for Potbelly as we enhance our ability to achieve ‘Traffic-Driven Profitability,’” CEO Bob Wright said in a statement. “As 2021 progresses, we expect to see our customers increasingly enjoy Potbelly’s offerings as the pace of COVID-19 vaccinations and dining-room re-openings accelerate across our markets.”
Potbelly, like many fast-casual chains centered in urban locations, has been hard hit by the pandemic as downtown office workers continue to work from home.
Potbelly has seen sales and traffic nosedive during the crisis and is embroiled in a dispute with the landlord of its Chicago headquarters.
The chain’s same-store sales fell 21% in Q3 and the company closed more than 20 units, compared with the same period last year.
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