Red Lobster Shutters Dozens of Restaurants, Liquidation Underway

Seafood restaurant chain Red Lobster is closing at least 48 of its approximately 650 locations across the United States. The closures, which began on Monday, span 21 states, with multiple branches shutting down in California, Florida, Colorado, Maryland, Georgia, New York, Texas, and Virginia, among others. 

The announcement was made by Neal Sherman, CEO of TAGeX Brands, a restaurant liquidation company assisting with the rapid closures and the sale of equipment from the affected restaurants. He posted the sale of equipment, furniture, and fixtures from select Red Lobster locations on LinkedIn.

In April, Red Lobster was reportedly considering filing for bankruptcy after years of financial struggles and cost-cutting measures by its parent company, Thai Union. 

The chain’s troubles were exacerbated in 2023 by the introduction of a $20 endless shrimp offer, which proved unexpectedly popular with customers. The promotion, previously a time-limited offer, became a permanent menu option, leading to increased customer traffic and longer wait times. 

However, the offer ultimately cost the company millions of dollars as patrons consumed more shrimp than the restaurant could afford.

In January, Thai Union announced its decision to end its involvement with Red Lobster, citing a $530 million loss on its initial investment due to the COVID-19 pandemic and rising interest rates worldwide.  The company’s struggles and the current wave of closures mark a significant challenge for the once-thriving casual dining pioneer, which has been a staple in the industry for over 50 years.

Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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