Red Lobster has broken their silence on the future of the business after filing for Chapter 11 bankruptcy.
Rumors have been swirling that the popular seafood chain may close its doors ever since the restaurant shut down dozens of locations and filed for Chapter 11 bankruptcy earlier this week.
Taking to social media, Red Lobster released a statement explaining that their bankruptcy filing is a legal process aimed at restructuring and strengthening the business and does not mean that the company is closing.
“Filing for bankruptcy does not mean we are going out of business,” the statement read. “In fact, it means just the opposite. It is a legal process that allows us to make changes to our business and our cost structure so that Red Lobster can continue as a stronger company going forward.”
Red Lobster’s bankruptcy filing was announced on May 20, 2024, following the closure of more than 48 locations across the United States.
In recent years, the company has faced various financial and internal challenges, adding to the assumption that it was permanently shutting down. CNN reported 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.
Additionally, in the first nine months of 2023, Red Lobster reported a share loss of $19 million, attributing $11 million of this loss to the “Ultimate Endless Shrimp” promotion. This deal allowed customers to enjoy all-you-can-eat shrimp for $20. While it increased customer traffic, it also resulted in substantial losses for the restaurant.
Red Lobster was first established in 1968 with the opening of its first restaurant in Lakeland, Florida. Over the years, 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.
Read Red Lobster’s full statement below.