Largest Seafood Chain In The World Red Lobster Files For Bankruptcy

Red Lobster, a well-known seafood restaurant chain that has been a staple across the country since the 1980s, has filed for bankruptcy.

The company has stated that they are more than $1 billion in debt and less than $30 million in cash on hand. While the company has many locations all across the country closing, they say many more will meet the same fate in the meantime.

With a total of 578 restaurants across 44 states, Red Lobster serves more than 64 million customers annually, generatingaround $2 billion in annual sales. Over the years, the lack of investment in keeping the once-iconic restaurant competitivehas finally caught up with them.

At the company’s inception, Red Lobster was part of the casual dining revolution in America. Eventually, it was bought out by Darden Restaurants, which also owns other restaurant chains, such as Olive Garden.

2014: A Change In Leadership

In 2014, Darden sold Red Lobster to Golden Gate Capital. Beginning in 2020, a Thai seafood distributor, Thai Union Group, has been the largest shareholder of Red Lobster, owning 49% of the company. Since then, Red Lobster has struggled to keep up.

Since 2019, attendance at Red Lobster restaurants nationwide has decreased by 30%, and there has been littleimprovement since the pandemic. Just earlier this year, Thai Union announced its decision to divest from Red Lobster, incurring a $530 million loss.

With the future of such a popular American brand looking so bleak, many have pointed to Red Lobster’s iconic bottomless shrimp campaign as a significant reason for the company’s downfall. Following the restaurant’s decision to make their $20 endless shrimp a permanent menu item last summer, the company lost $11 million and reduced profits for Thai Union.

Endless Shrimp Finally Coming To An End

In the bankruptcy filing, Red Lobster blamed Thai Union for the company’s losses, stating that Thai Union had been given an exclusive supplier deal under the guise of a “quality review,” which left Red Lobster with higher costs.

Just last week, the chain closed an astonishing 93 restaurants in operation for it’s bankruptcy.