Red Lobster Just Abruptly Closed Dozens of Restaurants Across the U.S.
UPDATE: May 21, 2024
Editor's note: On May 19, Red Lobster confirmed it has filed for Chapter 11 bankruptcy. Nearly 580 of its restaurants will remain open through the restructuring process.
Red Lobster is reducing its footprint and shuttering dozens of locations amid financial struggles.
Business Insider has reported that the seafood chain is closing more than 50 restaurants across the country. TAGeX Brands, a restaurant liquidator, told the news outlet that it will be auctioning off furniture and kitchen items from more than 50 locations between May 13 and May 16.
"TAGeX Brands is conducting the largest restaurant equipment auction event ever, auctioning off the contents of 50+ former Red Lobster locations across the country that were closed as part of Red Lobster's footprint rationalization," TAGeX Brands wrote in a statement to Business Insider. The company's founder and CEO, Neal Sherman, told the news outlet that four sales had been completed on Monday.
The liquidator's website currently lists auctions at 48 restaurants across 21 states.
"These auctions are WINNER TAKES ALL – meaning, each winner will receive the ENTIRE contents of the Red Lobster location they bid on," TAGeX Brands' website reads.
Additionally, 87 Red Lobster locations across 27 states are currently listed as "temporarily closed," according to USA Today.
Red Lobster's website states that the chain has over 700 locations across the world. However, it's unknown if this number includes the closed restaurants. The seafood chain has not shared any information on the closures.
Last month, Bloomberg reported that Red Lobster is considering filing for Chapter 11 bankruptcy. According to the news outlet, people "with knowledge of the matter," who asked not to be identified, said the restaurant chain is considering this filing to get rid of some long-term contracts and renegotiate leases.
Over the years, Red Lobster has struggled with various issues, including high food and labor costs and operating losses. In January, Thai Union Group, a Red Lobster parent company, announced plans to divest from the chain.
"The combination of Covid-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders," Thiraphong Chansir, Thai Union's CEO, said in a press release.
Then in February, Chansir said the company isn't "expecting to get anything much from the sale."
In Red Lobster's third financial quarter of 2023, the chain reported operating losses of more than $11 million and cited that more people ordered the popular "Ultimate Endless Shrimp" promotion than anticipated.
Red Lobster did not immediately respond to a request for comment.
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