Report: Subway mulls a sale

Sandwich chain Subway is considering selling itself in a deal that could value it at more than $10 billion, the Wall Street Journal reported, citing sources familiar.

Why it matters: The consumer and retail sector has been buffeted by macroeconomic headwinds, and investor response to an M&A transaction like this will provide a gauge of the current appetite.

Driving the news: The Milford, Connecticut company has retained advisers to explore the move, which could attract potential corporate buyers and PE firms, per WSJ.

• The process is still in the early stages.

State of play: In 2002, Subway became the largest fast-food chain in the U.S. by the number of stores with locations in more than 100 countries.

• But it wasn’t able to sustain that aggressive expansion and saw stores close, franchisees leave and more sandwich rivals cropping up over the past decade.

Context: The quick-service restaurant chain has been under the ownership of its two founding families for more than five decades.

• CEO John Chidsey, who was the first person outside the two founding families to helm the chain, has tried to initiate a turnaround.
• Since joining in 2019, he closed stores, reorganized operations, and turned the company’s priorities toward improving its menu and food quality.

What they're saying: In an email, Subway said: "As a privately held company, we don’t comment on ownership structure and business plans. We continue to be focused on moving the brand forward with our transformational journey to help our franchisees be successful and profitable."