Struggling Red Lobster is abruptly closing at least 48 of its restaurants around the country, according to a leading restaurant liquidator.
TAGeX Brands is conducting an online auction of Red Lobster restaurant inventory, including kitchen equipment, furniture, tables and chairs. The auction begins Monday and continues through Thursday, according to company founderNeal Sherman.
Red Lobster locations in Jensen Beach, Buffalo, Orlando, Jacksonville and other cities were listed as "temporarily closed" on Red Lobster's website, according to local news reports.
Red Lobster did not respond to CNN's requests for comment. The company has about 650 locations.
Consumer
Tijuana Flats closing 11 locations including Boynton Beach
Red Lobster is reportedly considering filing for bankruptcy protection. The chain has tapped a restructuring expert as its chief executive, a possible indicator of an impending bankruptcy.
The mass closures are another sign of problems at Red Lobster and one of the only times in its more than 50-year history the chain has closed dozens of stores at once.
Red Lobster was a casual dining pioneer, bringing affordable seafood to middle-class consumers for the first time.
But the chain has declined in recent years due to a range of factors, including corporate mismanagement, say former leaders and restaurant analysts.
In 2020, Thai Union, a longtime supplier to Red Lobster, took an undisclosed financial stake in the chain, becoming a key shareholder.
Consumer
Here's why business experts say Chapter 11 bankruptcies are on the rise
Under Thai Union's direction, Red Lobster has cycled through four CEOs and an all-you-can-eat shrimp deal last year that slowed down table service and cut into Thai Union's profitability.
The promotion has been a tradition at the chain for more than 18 years, but Red Lobster made endless shrimp a permanent fixture on the menu.
"We need to be much more careful," Thai Union CEO Thiraphong Chansiri said in November of the shrimp deal.
Thai Union said earlier this year it would divest from Red Lobster and take a $530 million loss on its investment.
"I'm going to stop eating lobster," Chansiri said.
The explosive growth and popularity of fast-casual chains like Chipotle and quick-service chains like Chick-fil-A over the past two decades also squeezed Red Lobster and the casual dining sector.
Casual dining has slipped from 36% of total restaurant industry sales in 2013 to 31% in 2023, according to Technomic, a restaurant research firm.
The-CNN-Wire
™ & © 2024 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
