Potbelly chairman credits fantastic staffers for IPO success
BY FRANCINE KNOWLES Staff Reporter October 6, 2013 8:56PM
Bryant Keil (pictured in 2002) is founding chairman of Potbelly. | Sun-Times file photo
Updated: November 8, 2013 6:26AM
Bryant Keil, founding chairman of Potbelly Corp., welcomed investors’ taste for the Chicago-based sandwich chain after its shares more than doubled and turned in the second-best trading debut on a U.S. exchange this year, according to Bloomberg data.
“It’s pretty exciting,” Keil told the Sun-Times on Sunday, two days after Potbelly’s initial public offering raised $105 million and its shares closed at $30.77 — up 120 percent.
“We are pleased that people recognize what an interesting, fun, exciting concept we have, and we are looking forward to continuing to execute our business model,” Keil said.
Potbelly has been all about execution since 1996, when Keil bought an antique shop that sold sandwiches on Lincoln Avenue and helped to build it into 295 sandwich shops nationally.
The company saw sales grow nearly 16 percent to $274.9 million last year and adjusted earnings rise nearly 18 percent to $31.5 million. It’s on track to open 32 to 35 company-operated Potbelly Sandwich Shops this year. That’s part of a plan to increase the number of stores 10 percent annually.
The company plans to use $49.9 million of the proceeds from the IPO, which was priced at $14 a share, to pay a previously declared cash dividend and for working capital and general corporate purposes.
Potbelly wasn’t the biggest local IPO, but it’s one of the best known, given the number of shops that have opened up in the area over the past few years. Keil spearheaded the company’s rapid growth to 100 stores in 2005 and 200 in 2008. The company has been trying to carve out a niche in the ultra-competitive dining sector, which saw growth curtailed during the Great Recession.
Keil, 48, a Chicago area native, has been founding chairman since 2011. He served as CEO until 2008.
The success of the chain, known for its toasted sandwiches, Potbelly stoves, locally themed photos and use of local musicians, is the result “a great concept, great business, great execution, fantastic management team and the people in our stores,” Keil said. “We have fantastic employees, and we have great customer loyalty.”
Keil, who describes himself as a “pretty laid-back guy” who likes to do things right, started his day Friday in New York, where he rang the Nasdaq bell.
He credits CEO Aylwin Lewis, named to the post in 2008, with helping to create a winning workplace culture at Potbelly. Lewis was previously president and CEO of Sears Holdings and president and chief multibranding and operating officer at Yum Brands.
“We have a culture filled with smart, thoughtful, hardworking, good people focused on keeping our customers happy,” Keil said. “That’s the one mission we have for them. No matter what you’re doing, make our customers happy.
“Our people have very positive attitudes, and it’s a very thoughtful, high-performing culture,” he said. “Our turnover is incredibly low at every level of the company, and that’s really a testament to Aylwin and the management team.”
Having a community focus is also key at Potbelly, said Keil, who is co-chair of the Chicagoland Entrepreneurial Center and an active member in the Economic Club of Chicago, the Field Museum, Kohl Children’s Museum and Big Shoulders Fund, which provides support to Catholic schools in needy inner-city communities. Keil also serves as special adviser at Merrick Ventures, where Michael Ferro is chairman and CEO. Ferro also is chairman of Wrapports LLC, the Sun-Times’ parent company.
Potbelly’s charitable initiatives include its 25 percent Fundraiser program, in which nonprofits that host fund-raisers at a Potbelly shop get 25 percent of the sales gathered from the event. Potbelly also has a Shake Fundraiser — community groups can create a shake, and 50 cents from each shake goes to the organization at the end of a specified time.
“Giving back, it’s important to me personally, and it’s important to the company,” Keil said.