The popular seafood restaurant chain Red Lobster has announced the closure of dozens of its locations across 27 states amid financial difficulties.
Over 50 locations are slated for closure, with restaurant liquidation company TageX Brands handling the auctioning of equipment from these shuttered locations.
While only 48 locations are currently listed in the auction catalog, it’s indicated that more closures may follow.
California and Florida will each lose five locations, while Colorado and Maryland will see four closures each. These closures come amid earlier reports suggesting that Red Lobster was considering bankruptcy as a measure to alleviate its financial strain.
Biden’s Build Back Better.
— I Meme Therefore I Am 🇺🇸 (@ImMeme0) May 14, 2024
Red Lobster abruptly closes at least 50 restaurants, including 14 in NY and NJ. 56 year old restaurant chain considers filing for bankruptcy due to rising costs.
Yet, Democrats want you to think that Biden is doing a great job! pic.twitter.com/IdQHNFBsOI
Fox Business reported:
Seafood restaurant chain Red Lobster is closing dozens of locations nationwide as the company struggles to stay above water.
An announcement released earlier this week indicated the company would be “auctioning off 50+ locations across the country.”
Restaurant liquidation company TageX Brands announced it would be overseeing the sale of equipment at the various closing locations, calling the situation its “largest restaurant equipment auction ever.” Only 48 locations were specifically listed in its catalog.
Five locations are set to be closed in California alone, with another five in Florida. Colorado and Maryland will both lose four.
The locations are being sold off wholesale by TageX, with the company announcing that “these auctions are WINNER TAKES ALL – meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on.”
Earlier this year, it was reported that Red Lobster was considering filing for bankruptcy to relieve financial pressures that have weighed on the company.
According to a report by Bloomberg citing people familiar with the discussions, Red Lobster is weighing a Chapter 11 bankruptcy filing to renegotiate burdensome leases and address other long-term contracts as well as rising labor costs.
The outlet reported that the seafood restaurant chain is being advised by law firm King & Spalding on the subject, and that discussions about restructuring are ongoing, and no final decisions have been made about a bankruptcy filing.
By filing for Chapter 11 bankruptcy, the company could continue to operate while it works with creditors and investors to put in place a debt reduction plan that would allow it to head into the future on a better financial footing.
Red Lobster brought in Jonathan Tibus as its new CEO in March. Tibus is considered an expert in developing and implementing restructuring plans at underperforming restaurants, retail and hospitality companies and has led numerous restructuring efforts.
Here is a list of the affected locations via Daily Mail:
Alabama
- Auburn
- Decatur
California
- Redding
- Rohnert Park
- Sacramento
- San Diego
- Torrance
Colorado
- Denver
- Lakewood
- Lone Tree
- Wheat Ridge
Florida
- Altamonte Springs
- Gainesville
- Hialeah
- Largo
- Orlando
Georgia
- Athens
- Roswell
- Dublin
Idaho
- Lewiston
Illinois
- Bloomingdale
- Danville
Indiana
- Indianapolis
- Elkhart
Iowa
- Council Bluffs
- Waterloo
Maryland
- Gaithersburg
- Columbia
- Silver Spring
- Laurel
Michigan
- Fort Gratiot
Mississippi
- D’Iberville
New York
- Amherst
- Kingston
- Rochester
New Jersey
- Ledgewood
North Dakota
- Grand Forks
Oklahoma
- Lawton
South Carolina
- Myrtle Beach
Texas
- Lake Jackson
- Longview
- San Antonio
Virginia
- Colonial Heights
- Williamsburg
- Newport News
Washington
- Silverdale
Wisconsin
- Wauwatosa
- La Crosse
Earlier this year, Thai Union Group, the owner of Red Lobster, revealed plans to divest its ownership in the brand. They attributed this decision to a “combination of [the] COVID-19 pandemic, sustained industry headwinds, higher interest rates, and rising material and labor costs” impacting profits.
Business Insider reported:
Restaurant chain Red Lobster could file for bankruptcy protection as early as next week, The Wall Street Journal reported on Tuesday.
People familiar with the matter told the Journal that the company, overwhelmed with hundreds of millions in debt, plans to file a Chapter 11 bankruptcy petition in Orlando before Memorial Day.
Bloomberg previously reported in April that the restaurant company was considering filing for Chapter 11 bankruptcy protection.
…
Leasing costs, less foot traffic during COVID-19 lockdowns, and a failed all-you-can-eat shrimp promotion are some of the reasons Red Lobster and outside observers have attributed to the company’s downfall.
These financial troubles resulted in Thai Union Group, which had assumed majority ownership of Red Lobster in 2020, pulling out its investments. On a February earnings call, Thai Union Chief Executive Thiraphong Chansiri said, “We’re going to exit. We are not going to inject any more money into Red Lobster.”
If you love American and reject Bidenomics get yourself to a Red Lobster before next week. How many other American institutions will we lose if Biden serves another four years? https://t.co/5vOrbQhD13
— @amuse (@amuse) May 15, 2024
