Popular seafood chain Red Lobster has made headlines with reports of the sudden closure of numerous restaurants nationwide.
An online restaurant liquidator, TAGeX Brands, is currently auctioning off kitchen equipment from 48 of these closed locations. Bidders have the chance to win the entire contents of the Red Lobster sites they bid on, and auctions will conclude periodically by Thursday.
The sudden closures have raised speculation about Red Lobster’s future, with reports suggesting the chain is contemplating filing for bankruptcy protection.
The recent closure of numerous Red Lobster stores signals further troubles for the chain. According to Bloomberg, Red Lobster contemplated filing for Chapter 11 bankruptcy last month as a strategy to address its debt issues.
In recent years, the company has faced various financial and internal challenges. CNN reports that between 2021 and 2022, Red Lobster saw a turnover in its executive team, welcoming new leaders such as a CEO, chief marketing officer, chief financial officer, and chief information officer. However, all of them reportedly left within a two-year span.
In the first nine months of 2023, Red Lobster reported a share loss of $19 million.
The restaurant blames $11 million of this loss to the “Ultimate Endless Shrimp” promotion. This deal allows customers to enjoy all-you-can-eat shrimp for $20. In the end, the decision to offer all-you-can-eat shrimp at a low price led to increased customer traffic but also resulted in substantial losses for the restaurant.
“We want to keep it on the menu. And of course we need to be much more careful regarding what are the entry points and what is the price point we are offering for this promotion,” Thai Union Group PCL, the company who owns Red Lobster, told Restaurant Business Magazine.
Red Lobster was first established in 1968, with the opening of its first restaurant in Lakeland, Florida. Over the years that followed, the chain grew quickly, becoming a worldwide staple in the fast-casual restaurant scene. Currently, Red Lobster has more than 700 locations still open, according to its official website.