Casual Dining Restaurant Chain With 650 Locations Now Facing Bankruptcy

By Dave Basner

April 1, 2024

Each week, there seems to be news of a retailer closing stores or shutting down totally. Bed, Bath & Beyond, Tuesday Morning, Christmas Tree Shops, The Body Shop, and Outdoor Voices closed all of their locations, while Family Dollar, Sears, Walgreens, CVS and Rite Aid shuttered some of their stores. The troubles have hit the restaurant industry as well, with Pizza Hut, Boston Market, TGI Fridays, Popeyes and Outback Steakhouse closing down restaurants as a cost-cutting measure. Well, Red Lobster is now facing some serious financial challenges, and experts think something big has to happen to save the chain, with bankruptcy topping the list.

Trouble for brand jumped when they made their highly popular all-you-can-eat shrimp promotion, Ultimate Endless Shrimp, available all the time for $20, and not just as a limited-time special. So many customers took them up on the offer that they lost $12.5 million. Due to that and other issues, minority investor, Thai Union Group, decided to sell their stake in the chain, cutting their losses. In an earnings call, their CEO was straightforward about the decision, stating, "After detailed analysis, the board of directors has determined that Red Lobster's ongoing financial requirements no longer align with our capital allocation priorities and therefore the company is pursuing an exit of the minority investment... We’re not expecting to get anything much from the sale."

FoodServiceResults CEO Darrent Tristano, an expert on the industry, has some thoughts about Red Lobster. He told SeafoodSource that the restaurant is now considered a "zombie brand" that "continues to wander aimlessly looking for direction." He added, "It appears that Red Lobster is planning for a turnaround, bankruptcy or fire sale." He went on to say, "Because Red Lobster has not yet named a new buyer, it would appear that bankruptcy would be the best option followed by a sale after the balance sheet gets cleaned up."

No word yet on the company's official plans or what will be happening with its 649 locations. As for the Ultimate Endless Shrimp, it is still on the menu but now for $25.

Advertise With Us
Music, radio and podcasts, all free. Listen online or download the iHeart App.


© 2024 iHeartMedia, Inc.