Orlando, Florida – Red Lobster, a popular seafood chain famous for its affordable seafood dishes and cheddar bay biscuits, announced on Sunday that it has filed for Chapter 11 bankruptcy protection. The company revealed its plans to sell off most of its assets to address financial challenges and restructure its operations. Despite the bankruptcy filing, Red Lobster assured customers that its approximately 650 restaurants will continue to operate during the restructuring process.
CEO Jonathan Tibus expressed optimism about the restructuring process, stating that it will allow the company to overcome financial and operational hurdles and emerge stronger. He emphasized the importance of the support from lenders and vendors in ensuring a smooth sale process while maintaining a focus on employees and customers.
The decision to file for bankruptcy comes after the announcement that Red Lobster will be closing about 48 of its locations, following financial struggles exacerbated by the ongoing pandemic. The chain, partially owned by Thailand seafood producer Thai Union, has faced challenges due to the pandemic, higher interest rates, and rising costs of materials and labor.
Founded in 1968 in Lakeland, Florida, Red Lobster has grown into a nationwide chain offering a variety of seafood options. However, recent years have seen a decline in customer visits, increased food costs, and the need to sustain underperforming locations, leading to a net loss of $76 million in the company’s 2023 fiscal year.
One of the challenges faced by Red Lobster was limitations on seafood purchasing due to Thai Union’s influence. The company also attributed losses to a promotional deal called “endless shrimp,” which was implemented as a permanent menu item at $20 per order, causing further financial strain.
As Red Lobster navigates through its restructuring process, it remains committed to providing quality seafood dining experiences for its customers. The company’s focus on addressing financial issues and improving operational efficiency reflects its dedication to long-term success in the competitive restaurant industry.