Red Lobster abruptly closes 87 locations

[TheFugitive]

Red Lobster has abruptly closed 87 locations across the U.S.  Their website lists the locations as "temporarily closed" although the media is reporting that liquidators have already been lined-up to sell off the equipment and furnishings.

https://www.msn.com/en-us/money/companies/red-lobster-website-lists-87-locations-temporarily-closed-in-27-states-see-full-list/ar-BB1mnjXc?ocid=BingNewsSearch

It has been widely reported that Red Lobster is considering a Chapter 11 bankruptcy filing after some poor quarterly results.

[TheFugitive]

Red Lobster has officially filed for bankruptcy.

https://www.msn.com/en-us/money/companies/how-red-lobster-s-misguided-endless-shrimp-promotion-drove-it-into-bankruptcy/ar-BB1mJbCp?ocid=BingNewsSearch

Analysts are blaming to a large degree their Endless Shrimp promotion.  Apparently Americans can eat a whole lot more shrimp than they thought we could.  RL's Asian investors are pulling out and the Wall Street Journal is reporting that the company is for sale.

[TheFugitive]

Some more interesting stuff on this from a Hong Kong-based business reporter.

Details from the Red Lobster bankruptcy filing are wild.  So much mismanagement!

▫️$1 billion in debt, $30 million in cash

▫️Previous owner sold land and leased it back to Red Lobster at "above market rates".

▫️$20 Endless Shrimp cost it $11 million but the interesting part is that one of the chain's owners is Thai seafood firm Thai Union (which also owns Chicken By The Sea) and it may have used Endless Shrimp to dump its own shrimp supply through the 578 restaurants in North America.

▫️Thai Union became the only Red Lobster shrimp vendor, overcharging for shrimp and skipping quality reviews (Thai Union has written off its $500m+ investment).

▫️Red Lobster has had 5 CEO in the last 5 years (!!!)

▫️Sales down 30% since 2019

[TheFugitive]

Paperwork on it's bankruptcy filing reveals that Red Lobster could be forced to close up to 135 additional restaurants if they are unable to renegotiate their rent down to a level where those locations become profitable.

https://www.restaurantbusinessonline.com/financing/red-lobster-could-close-more-100-additional-restaurants-if-it-cant-renegotiate-leases

[TheFugitive]

A list of the additional Red Lobster locations which will either have to negotiate rent reductions or close.

https://www.wpxi.com/news/trending/red-lobster-bankruptcy-new-filings-show-which-locations-may-be-closed-next/DO7Q3P33D5E5PIQP4SMAGO3OQI/

[TheFugitive]

Red Lobster announces two dozen more closures.  The list is here.

https://www.msn.com/en-us/money/companies/redglobster-closing-nearly-two-dozen-more-restaurants-here-s-where/ar-AA1pt3KS?ocid=BingNewsVerp