Red Lobster abruptly closes at least 50 restaurants, including 14 in New York and New Jersey

Red Lobster abruptly closed the doors to at least 50 restaurants nationwide on Monday, including a dozen in New York and New Jersey, catching the seafood chain’s employees off guard.

TAGeX Brands, a restaurant liquidator, revealed it is auctioning off kitchen items and furniture from closed Red Lobster stores in its “largest ever restaurant equipment sale.”

Fourteen locations in New York and New Jersey have been “temporarily closed” for the foreseeable future, according to Red Lobster’s website, as the struggling company considers a possible Chapter 11 bankruptcy filing.

Red Lobster closed the doors to dozens of restaurants on Monday, including 14 in New York and New Jersey. WKBW

Stop sites include: Lakewood, NY; Buffalo, New York; Amherst, New York; Williamsville, New York; Rochester, New York; Poughkeepsie, New York; Stony Brook, New York, Kingston; NEW YORK; Scarsdale, New York; Nanuet, New York; Ledgewood, New Jersey; Lawrenceville, New Jersey; East Brunswick, New Jersey; Bridgewater, New Jersey.

Red Lobster – which has 649 locations nationwide – has not publicly commented on the closures.

Employees and customers at a Red Lobster in Buffalo were greeted with a sign taped to the window indicating the restaurant was closed, according to WKBW.

“This place is closed. We look forward to serving you at another Red Lobster restaurant in the future,” the sign reads.

Ramon Garcia, an employee, told the outlet that he learned of his store’s closure from a co-worker.

Ramon Garcia, a Red Lobster employee, was informed of his store’s closure by a co-worker rather than company management. WKBW

Company officials reportedly only contacted the workers after informing the workers that they had three days to vacate everything from the premises.

“This happened out of nowhere. All the people we work with lose their jobs and don’t know what to expect after that,” Garcia said. “It’s taking a toll on them.”

“I didn’t know we were going to go bankrupt, but I kind of knew, if you know what I’m saying,” Garcia said. “They were cutting back on a lot of things.”

Last month, Red Lobster mulled the decision to file for Chapter 11 bankruptcy to restructure its debts, according to a report.

Red Lobster has placed closing signs on its doors in locations that are now closed. VALERIE MYERS/ERIE TIMES-NEWS / USA TODAY NETWORK

The seafood chain has sought advice from law firm King & Spalding on how to shed some long-term contracts and renegotiate some of its leases, people with knowledge of the matter told Bloomberg.

In January, Thai Union Group PCL, a Thai seafood giant that owns Red Lobster, revealed plans to continue withdrawing its minority investment, blaming rising costs and the COVID-19 pandemic.

“The combination of the COVID-19 pandemic, continued 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,” said Thiraphong Chansiri, CEO of Thai Union Group.

“After detailed analysis, we have determined that Red Lobster’s ongoing financial needs no longer align with our capital allocation priorities and are therefore seeking to exit our minority investment.”

Thai Union paid Red Lobster’s then-parent Golden Gate Capital $575 million for a 25% stake in the restaurant chain in 2016.

The group claimed that Red Lobster recorded a share loss of $19 million in the first nine months of 2023.

The restaurant also blamed the “Ultimate Endless Shrimp” deal, which allows customers to spend $20 on unlimited shrimp, for its $11 million loss in the third quarter of last year.

Red Lobster had been considering the decision to file for bankruptcy last month. Christophe Sadowski

Ludovic Régis Henri Garnier, Union Group’s chief financial officer, told Restaurant Business Magazine that the initiative was intended to “increase traffic” but “it didn’t work” as prices were increased to $25.

“We want to keep it on the menu. And of course, we have to be much more careful about the entry points and the price we offer for this promotion.

In March, Red Lobster named veteran bankruptcy expert Jonathan Tibus as its new CEO.

Red Lobster has since sought a buyer to take over operations, according to CNBC.

The outlet reported last month that a company was interested in purchasing the company, but the deal never came to fruition.

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