Further Red Lobster Closures Amid Bankruptcy

In the latest development of Red Lobster’s bankruptcy proceedings, more locations are set to close in the coming days. This decision follows the seafood restaurant chain’s ongoing efforts to stabilize its financial situation. By Saturday, August 31, an additional 23 locations will shut down, adding to the over 100 restaurants that were closed earlier this summer. Once these closures are complete, Red Lobster will have around 500 outlets remaining, a significant reduction from the 650 it operated just last year.

Declining Restaurant Numbers

The sharp decline in the number of Red Lobster locations is a direct result of the company’s financial struggles. In a recent court filing, the company revealed that it is rejecting the leases of several restaurants as part of its restructuring efforts. The closures are necessary to reduce operational losses and to help the company focus on more profitable locations. This downsizing marks a significant shift for a brand that was once a dominant player in the casual dining sector.

Red Lobster Sale to Fortress Credit Corp.

As part of its recovery plan, Red Lobster is in the process of selling itself to Fortress Credit Corp., a lender with extensive experience in managing restaurant chains. Fortress already owns several other restaurant brands, including Krystal, Logan’s Roadhouse, and J. Alexander’s. Recently, Fortress provided Red Lobster with a $100 million loan to keep the company afloat during these challenging times. This financial support is crucial for Red Lobster as it navigates through bankruptcy and seeks to rebuild its business.

New Leadership at Red Lobster

In a bid to turn things around, Fortress announced that Damola Adamolekun, the former CEO of P.F. Chang’s, will take over as the new CEO of Red Lobster. Adamolekun, who left P.F. Chang’s in August 2023 after a successful four-year tenure, is expected to bring fresh ideas and leadership to Red Lobster once the chain exits bankruptcy. His experience in the restaurant industry could be key to revitalizing the struggling seafood chain and steering it back to profitability.

Factors Behind Red Lobster’s Decline

Red Lobster’s financial troubles can be attributed to a combination of factors, including mismanagement, increased competition, and inflation. The chain, which was once a pioneer in the restaurant industry, struggled to maintain its market position in recent years. Thai Union, a global seafood supplier, became the chain’s leading shareholder in 2020, but under its leadership, Red Lobster’s performance deteriorated, ultimately leading to the bankruptcy filing in May 2024.

Missteps Under Thai Union’s Leadership

Cost-cutting measures, the removal of longtime suppliers, and misguided strategies, such as making the $20 endless shrimp deal a permanent menu item, contributed to the chain’s downfall. The endless shrimp promotion alone resulted in a loss of $11 million, highlighting the financial mismanagement that plagued the company during this period.

Red Lobster’s Future Outlook

As Red Lobster continues to close unprofitable locations, the company is focused on streamlining operations and returning to profitability. The new leadership under Adamolekun and the financial backing from Fortress Credit Corp. offer hope for the future. However, the road to recovery will be challenging, and only time will tell if the seafood chain can regain its former glory in the highly competitive restaurant industry.

Locations Closing

Arizona

1521 S. Yuma Palms Pkwy., Yuma

Arkansas

8407 W. Markham St., Little Rock

California

8703 Murray Drive, La Mesa

Colorado

4925 N. Academy Blvd., Colorado Springs

Florida

326 Miracle Strip Pkwy., Fort Walton Beach

5110 N. 9th Ave., Pensacola

8909 U.S. Highway 19, Port Richey

Georgia

6550 Tara Blvd., Jonesboro

Illinois

1604 N. State Road 50, Bourbonnais

902 Commons Drive, Geneva

4625 N. Sterling Ave., Peoria

Indiana

4353 Franklin St., Michigan City

Minnesota

8900 Golden Valley Road, Golden Valley

12515 Elm Creek Blvd. North, Maple Grove

Missouri

2381 Maplewood Commons Drive, Maplewood

New York

925 Hunts Point Ave., Bronx

750 Upper Glen St., Queensbury

North Carolina

304 A Western Blvd., Jacksonville

Ohio

17227 Southpark Center, Strongsville

South Carolina

1270 Knox Abbott Drive, Cayce

Virginia

555 S. Van Dorn St., Alexandria

4415 S. Laburnum Ave., Richmond

709 Independence Blvd., Virginia Beach