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Will Potbelly be pressured by a new activist?

180 Degree Capital Corp. has raised its stake in the struggling sandwich chain.
potbelly store
Photograph: Shutterstock

Struggling Potbelly Sandwich Shop has another activist investor potentially ready to pressure the sandwich chain to shift its strategy.

New Jersey-based investment company 180 Degree Capital Corp. disclosed this week that it now has a 6% stake in the Chicago-based fast-casual chain and that it plans on talking with Potbelly management about “operational and strategic matters,” according to a Securities and Exchange Commission document.

180 Degree Capital does not have any “present plan or proposal” for changes to the chain’s operations, management or strategy, according to the document.

Late last year, activist investor Ancora Advisors disclosed that it had raised its stake in Potbelly to more than 5%. In 2017, Ancora and other activists pressured the chain to begin exploring a sale, a process that was not completed.

The 470-unit chain is muddling through a massive traffic and sales decline, halting unit growth and closing 11 underperforming locations last year. For its third quarter, same-store sales fell 3% and traffic was down 8.3%.

Potbelly launched a new prototype in Chicago in November, one crafted to boost efficiency while doing away with the chain’s pay-after-it’s-made ordering process.

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