RED Lobster abruptly closed dozens of locations overnight as the chain reportedly considers filing for bankruptcy.
Around 6,500 Red Lobster employees are said to be affected by the sudden change, as more than 80 locations are listed as “temporarily closed.”
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A sign posted at a closed location in Bossier City, Louisiana, states: “This location is closed.
“We look forward to serving you at another Red Lobster location in the future.”
The seafood chain with about 650 locations is already holding auctions for kitchen equipment, furniture and other restaurant furnishings.
Restaurant liquidator TAGeX Brands announced “the largest restaurant equipment auction ever” in its websiteregarding closed Red Lobster locations.
“In our restaurant equipment marketplace, we are auctioning off more than 50 locations nationwide,” the website states.
“These auctions are WINNER TAKES ALL – meaning each winner will receive ALL contents from the Red Lobster location they bid on.”
The auction began and will end on Thursday, with contents from multiple locations in 21 states up for grabs.
Some of the most notable location closures are in Florida, with 16 closures, and New York, with 10.
FINANCIAL PROBLEMS
Red Lobster has reportedly hired restructuring experts from law firm King & Spalding, which has sparked rumors of an upcoming Chapter 11 filing, according to a Bloomberg report.
Under this bankruptcy filing, the chain would be able to reorder its operations, which reportedly includes cutting expensive leases and reducing troubling labor costs.
This comes after years of chain struggles that have seen CEOs, CMOs, CFOs and CIOs lose faith in parent company Thai Union Group.
The Thailand-based seafood producer owns 49% of the chain and is actively trying to sell its share, which would see the parent company suffer a $530 million loss on its investment.
In announcing the sale, Thai Union Group said this was due to the impact on profits caused by the “pandemic, sustained industry headwinds, higher interest rates and rising materials and labor costs”.
He added that the chain’s financial problems “are no longer aligned with the company.”
Last year, Red Lobster reported an $11 million loss in the third quarter, which was largely attributed to its unlimited shrimp business.
In June 2023, the “Unlimited Endless Shrimp” deal for $20 became a basic offer to increase traffic.
Restaurant Closings in 2024
BOSSes of major restaurant chains have announced a series of restaurant closures. The US Sun compiled a list of those affected by the network.
- Biscuit Barrel: Stores in Medford, Oregon, Columbia, South Carolina and Sacramento, California, closed.
- Mod Pizza: Bosses drastically closed 27 stores, including in the state of California.
- Frisch’s Big Boy: Restaurant bosses have confirmed the closure of a restaurant in Covington, Kentucky.
- Two dolars: Four restaurants in Ohio are set to close.
- Pepper: A restaurant in Port Arthur, Texas, has closed permanently.
- Friendly: Bosses have confirmed that an establishment in Ronkonkoma, Long Island, will close.
- Pizza Hut: A restaurant in Glen Falls, New York, closed at the end of March.
- Danny: Two restaurants in Boise and Nampa, Idaho, have closed.
- Carl’s Jr.: The first location in Boise, Idaho, has closed.
However, this turned out to be a “key factor” in the third quarter losses, according to Thai Union Group CFO Ludovic Regis Henri Garnier, after the deal was priced too low for its popularity.
“We knew the price was cheap, but the idea was to bring more traffic to the restaurants,” Garnier told investors, according to Restaurant business.
In the fourth quarter of 2023, the network reports a loss of US$12.5 million.
This is not the first time that the network has faced financial problems with a bottomless deal.
In 2003, the chain nearly went bankrupt after an Endless Crab deal that offered bottomless snow crab caused the company to lose $405.9 million in shares in one trading session and $3.3 million in profits.
As news of the nighttime closures reached employees, many took to X, formerly Twitter, to speak out.
“I lost my job today without warning and yesterday I worked on Mother’s Day,” wrote one of them in a publish.
“I’m one of the lucky ones who doesn’t have children or a house to pay for, it’s so terrible to leave all the employees with nothing and without warning,” said another.
Meanwhile, fans are mourning the loss, with one saying “RIP Red Lobster” as they fear the worst.
The US Sun has reached out to Red Lobster for comment.
RED LOBSTER CLOSED LOCATIONS
The following Red Lobster locations are now listed as “closed
Alabama:
- Huntsville
- Decatur
- Mobile
California:
- Fremont
- Montclair
- Rohnert Park
- sacrament
- San Diego
- Torrance
Colorado:
- Lakewood
- Lonely tree
- Wheat Ridge
- Denver
Florida:
- Two locations in Tampa
- wide
- Kissimmee
- Leesburg
- Three Orlando locations, including Golden Sky Lane
- Altamonte Springs
- Gainesville
- Three Jacksonville locations, including Commerce Center Drive
- sanford
- Coastlines of Daytona Beach
Georgia:
Idaho:
Illinois:
Indiana:
Iowa:
Kansas:
Louisiana:
Maryland:
- Colombia
- blonde
- Silver Spring
- Gaithersburg]
Mississippi:
Missouri:
New Jersey:
- Lug wood
- Lawrenceville
- East Brunswick
- Bridgewater
New York:
- Lakewood
- Buffalo
- Amherst
- Williamsville
- Rochester
- Poughkeepsie
- Stony stream
- Kingston
- Scarsdale
- Nanuete
North Caroline:
- Rocky Mountain
- Cary
- Durham
- Burlington
North Dakota:
Oklahoma:
- Oklahoma City
- Still water
- Lawton
Pennsylvania:
South Carolina:
Tennessee:
- Memphis
- Two locations in Dallas
- Lake Jackson
- Houston
- Pasadena
- Tyler
- Long term vision
- Lufkin
- Newport News
- Williamsburg
- Colonial Hills
Washington:
Wisconsin:
This story originally appeared on The-sun.com read the full story
