Red Lobster is closing nearly 50 locations, liquidator says
Red Lobster is closing at more than 50 of its restaurants across the country, according to a company that helps businesses liquidate restaurant equipment.
Neal Sherman, CEO of TAGeX Brands, promoted a "Winner Takes All" liquidation sale of "fixtures, furniture and equipment" in a video posted Monday on LinkedIn that included a link for those who wished to bid.
Red Lobster has consistently lost money for years. In an attempt to boost traffic at its restaurants, the company last year expanded its all-you-can-eat shrimp deal. Customers' appetites, however, ate into profits as demand overwhelmed what the chain could afford, resulting in financial losses.
Rumblings of a possible bankruptcy emerged this spring when the company tapped Jonathan Tibus as its new chief executive. Tibus is a managing partner at advisory firm Alvarez & Marsal and is known for restructuring corporate entities.
As recently as last month, Red Lobster was seeking a buyer in hopes the company could avoid bankruptcy, CNBC reported.
Red Lobster's owner, Thai Union, first invested in Red Lobster in 2016 and upped its stake in 2020. In January, the company announced plans to sell its minority stake, with CEO Thiraphong Chansiri saying the pandemic, industry headwinds and rising operating costs hurt the restaurant chain.
As of Tuesday morning, auctions for 48 locations were still live after another four sales closed Monday, TAGeX Brands told The Associated Press via email.
Red Lobster's roots date back to 1968, when the first restaurant opened in Lakeland, Florida. In the decades following, the chain expanded rapidly. Red Lobster currently touts more than 700 locations worldwide.
—The Associated Press contributed to this report.
Khristopher J. BrooksKhristopher J. Brooks is a reporter for CBS MoneyWatch. He previously worked as a reporter for the Omaha World-Herald, Newsday and the Florida Times-Union. His reporting primarily focuses on the U.S. housing market, the business of sports and bankruptcy.
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