Red Lobster has closed 100 locations across the United States, impacting numerous states and sparking substantial liquidation activities.
According to a report from Breitbart News, the closures follow a series of financial challenges, including a costly promotion and a significant investment loss by ThaiUnion, its stakeholder.
The seafood chain's website listed locations in Alabama, Colorado, Georgia, California, and Florida as closed as of Tuesday. Neal Sherman, CEO and founder of TAGeX Brands announced on LinkedIn that TAGeX would host “the largest restaurant liquidation” through an online auction.
TAGeX’s website detailed auctions for 48 of the shuttered Red Lobster locations, auctioning off kitchen items and furniture. Specific locations that closed include La Crosse, Wisconsin; Watertown, New York; Gaithersburg, Maryland; and Bloomingdale and Danville, Illinois. All three Red Lobster locations in Jacksonville, Florida, also ceased operations.
An employee from the Red Lobster in Buffalo, New York, discovered the closure through a colleague rather than through official company communication. Ramon Garcia told WKBW:
I’m getting calls after calls this morning and my boy Don called me and he’s like, ‘You should come in right now,’ I’m like, ‘Why, I’m off today,’ and he’s like, ‘Man, you just need to come in because there’s a lot of stuff going on.'
The first Red Lobster location opened in Lakeland, Florida, in 1968. Today, the chain boasts over 700 locations worldwide. However, the recent financial difficulties have significantly impacted its operations.
Nearly a month ago, Red Lobster considered filing for bankruptcy after an all-you-can-eat shrimp promotion led to a substantial $11 million loss in 2023. Ludovic Garnier, Red Lobster CFO, explained the promotion's rationale:
For those who have been in the US recently, $20 was very cheap. And the rationale for this promotion was to say we knew the price was cheap, but the idea was to bring more traffic to the restaurants.
ThaiUnion, a Thailand-based company, bought a stake in Red Lobster in 2020. This investment was meant to bolster the seafood chain's financial health. Despite the initial optimism, ThaiUnion’s involvement did not yield the expected results.
In January 2024, ThaiUnion announced its exit from Red Lobster, resulting in a $530 million loss from its investment. This exit marked a significant blow to the seafood chain’s financial stability.
The impact of these closures has been widespread, affecting numerous employees and patrons. The combination of the unsuccessful promotion and the substantial investment loss created a challenging environment for Red Lobster.
The future of Red Lobster remains uncertain as the company navigates these financial hurdles. The closures and liquidations mark a significant chapter in the chain’s history, reflecting broader challenges in the restaurant industry.
Despite these setbacks, the chain’s long-standing history and remaining locations offer a glimmer of hope for recovery. The focus will likely shift to stabilizing operations and addressing the financial issues that have plagued the company.
In summary, Red Lobster's recent closures and financial struggles highlight the challenges facing the restaurant industry. The extensive liquidation efforts and stakeholder exit underscore the severity of the situation. The chain's future will depend on its ability to overcome these difficulties and rebuild its financial health.
