Chicago-based Potbelly Corporation, parent company of Potbelly Sandwiches chain of sandwich shops, has reportedly hired Alvarez and Marsal to advise the company on its financial options as it struggles to stay afloat in the wake of the coronavirus pandemic.

According to a story in ADWEEK the decision followed two months during which it was unable to pay rent.

On March 17, 2020, Potbelly fully drew the available capacity of $39.8 million under its Revolving Credit Facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of current uncertainty in the global markets resulting from the COVID-19 pandemic. In accordance with the terms of its Revolving Credit Facility, the proceeds from these borrowings may in the future be used for working capital, general corporate or other permitted purposes.  As of March 29, 2020, the Company had $39.8 million outstanding under the Credit Agreement.  There were no borrowings outstanding as of March 31, 2019. 

Separately, CBS Chicago reported that the franchise may close up to 100 retail stores.

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, CBS said.