Red Lobster, a national restaurant chain known for its affordable seafood and bay cheddar biscuits, announced Sunday evening that it had filed for Chapter 11 bankruptcy protection.
In a press release, Red Lobster announced its intention to sell “substantially all” of its assets. The company added that its approximately 650 restaurants would remain open and operational during the bankruptcy proceedings.
“This restructuring is the best path forward for Red Lobster,” CEO Jonathan Tibus said in a statement. “This allows us to overcome several financial and operational challenges and emerge stronger and refocused on our growth. The support we have received from our lenders and suppliers will help ensure that we can complete the sales process quickly and efficiently while remaining focused on our employees and guests.
In May, a company that helps businesses liquidate restaurant equipment revealed that Red Lobster planned to close about 50 of its restaurants.
Red Lobster’s roots date back to 1968, when the first restaurant opened in Lakeland, Florida, as a family-owned establishment run by local restaurateur Bill Darden. The restaurant eventually expanded nationally, allowing Americans from all corners of the United States to enjoy crab, shrimp, lobster and other seafood.
Red Lobster has been consistently losing money for years. In 2023, the company saw its financial losses balloon after expanding its well-known business. unlimited shrimp offer. But as customer demand grew, Red Lobster struggled to turn a profit while serving mounds of shellfish at a relatively low price.
The chain’s majority owner is seafood producer Thai Union, which first invested in Red Lobster in 2016. In January, the company announced plans to sell its stake, with CEO Thiraphong Chansiri saying the pandemic, rising interest rates and rising material and labor costs hurt Red Lobster’s financial performance.
—This is breaking news and will be updated.
Grub5
