Red Lobster files for bankruptcy: Latest list of closed locations and possible future closures

Unfortunately, the rumours are true. Red Lobster filed for Chapter 11 bankruptcy in Florida and the 56 year old restaurant chain have now made their bankruptcy official.

The restaurant chain is a staple of the genre, competing with Olive Garden, Chili’s, and Apple Bees. Since the company is not publicly traded, inquiring into its finances is complicated. Red Lobster is owned by Thai Union, a seafood-based food products group in Thailand that has been operating since 1977.

The company “intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern”, a statement read.

Why is Red Lobster closing?

The seafood chain’s CEO blamed “difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition.” CNBC added that “a disastrous ‘endless shrimp’ promotion helped drive the restaurant chain to a net loss last year”. The promotion looked like it was about to bring in success, with customer numbers up, but a lack of side orders such as drinks and other food items to go with the shrimp saw the idea turn into a horror show. Food & Wine reports that they lost more than $11 million in Q3 2023.

The following restaurants are listed as ‘permanently closed’ on Google:

When will the Red Lobster restaurants close?

The official report said that “Red Lobster’s restaurants will remain open and operating as usual during the Chapter 11 process” while adding that “the Company has been working with vendors to ensure that operations are unaffected”.

Red Lobster currently operates 551 locations in the U.S. and 27 restaurants in Canada. A total of 93 underperforming locations were closed down on May 13 and the chain has requested that the bankruptcy court reject 108 of its leases to further slim down its footprint.

When did Golden Gate Capital acquire Red Lobster?

Before Thai Union purchased Red Lobster, it was acquired by Golden Gate Capital, a San Fransisco-based private equity firm from Darden Restaurants, which owns Olive Garden, Ruth’s Chris Steakhouse, and Longhorn Steakhouse, among other chains.

When the sale was made, CNBC obtained a financial disclosure document produced by Derden that explained that the Red Lobster had been steadily losing money since 2011. After the sale, Darden said that selling Red Lobster allowed them “to maximize the value of Red Lobster, eliminate the risks and volatility associated with continuing to own the business, and provide a realistic market-validated valuation of Darden’s real estate assets.”

In 2016, Thai Union purchased a twenty percent stake in the company. Thai Union is a significant player in the frozen and canned fish market, owning recognizable brands like Chicken of the Sea in the United States. In 2020, the company acquired the remainder of the chain, taking it off Golden Gate Capital’s hands less than a decade after purchasing it from Darden.