Red Lobster locations are set to shut down, with reports indicating that over 50 seafood restaurants across the United States will permanently close their doors. This information comes from a company specializing in assisting businesses with liquidating restaurant equipment.
In a video posted Monday on LinkedIn, Neal Sherman, the CEO of TAGeX Brands, announced a "Winner Takes All" liquidation sale of "fixtures, furniture, and equipment." The video included a link for bidders interested in participating.
For years, Red Lobster has consistently lost money at its restaurants. Last year, the chain expanded its all-you-can-eat shrimp deal in an attempt to boost traffic. However, the chain experienced financial losses as customers' appetites ate into their profits as demand exceeded what it could afford, which led to financial losses for the chain, reported CBS News.
There were hints of a possible bankruptcy this spring when the company hired Jonathan Tibus as its new chief executive. Tibus is a managing partner of the advisory firm Alvarez & Marsal, known for his work restructuring corporations. The company was seeking a buyer as recently as last month to avoid bankruptcy, CNBC reported
The restaurant will be looking to file for bankruptcy later this month, the Wall Street Journal reported. During the bankruptcy proceedings, Red Lobster is planning to negotiate a series of new terms with its landlords and creditors that will potentially allow it to reduce its debt by hundreds of millions of dollars, the Journal reported.
Thai Union, which owns Red Lobster, first invested in the company in 2016 and increased its stake in 2020. The company announced in January that it would sell its minority stake, according to CBS News. CEO Thiraphong Chansiri said that the pandemic, higher interest rates, and rising materials and labor costs contributed to Red Lobster's lackluster financial performance.
During the first nine months of last year, Red Lobster recorded a $19 million loss, according to a statement released earlier this year by Thai Union. The auctions for 48 locations were still live as of Tuesday morning after another four sales closed on Monday, TAGeX Brands told The Associated Press via email.
The first Red Lobster restaurant was opened in Lakeland, Florida, in 1968 as a family-run establishment by local restaurateur Bill Darden. Over the next few decades, the chain grew rapidly. The Red Lobster brand currently boasts more than 700 restaurants across the globe. The list of 48 closed Red Lobster restaurants can be found here.