Red Lobster is shuttering at least 48 locations in the nation, according to a liquidator who posted the news online. The post mentions that all the assets of each restaurant will be sold by auction. There have been rumblings of an imminent bankruptcy filing by Red Lobster for a few weeks, and CWEB believes that these restaurant closures and asset sales are a forerunner to a bankruptcy filing by the restaurant chain in the next few weeks.
In a LinkedIn post on Monday, CEO Neal Sherman of TAGeX said that his company would be helping Red Lobster to auction its equipment. The liquidation company mentioned that the auctions for Red Lobster restaurants are live and would end on Thursday. It also said that bidders would get the entire content of the restaurant they bid on.
Later on Tuesday, the Red Lobster website showed that 87 locations had been “temporarily closed.” These 87 locations are in 27 states, with the most closures in Florida, Texas, New York, and California.
CWEB has analyzed quarterly reports, promotion offers, and more and has found that one of the main reasons for Red Lobster’s losses is what the CEO of 25 percent stakeholder Thailand-based Thai Union said earlier about its Endless Shrimp promotion failing to generate enough traffic and sales.
Red Lobster has a promotion called “Endless Shrimp,” where customers can eat a mound of shrimp and other shellfish for $20. The promotional offer was made permanent last summer. However, Red Lobster’s losses increased and amounted to millions of dollars despite the company raising the amount to $22 and then to $25 to decrease losses.
The first Red Lobster restaurant was opened in 1968 in Lakeland, Florida, offering shrimp, crab, lobster, and other seafood. It changed ownership several times and expanded its footprint across the nation. Thai Union Group PCL mentioned that it is planning to exit from its minority stake in Red Lobster, according to its website, on January 16, 2024.
CWEB concludes that the reasons for the shuttering of Red Lobster restaurants and potential filing for bankruptcy are mainly due to labor costs, increase in commodity prices, and the loss-making Endless Shrimp promotion after it was made a 365-day promotion instead of a time-limited offer.
Celebrity WEB Update— Premier Jewelry designer and manufacturer fashion house ParisJewelry.com has started manufacturing a new custom line of celebrity jewelry designs with 30% Off and Free Shipping. Replenish Your Body- Refilter Your Health with OrganicGreek.com Vitamin Bottles, Vitamins, and Herbs. Become a WebFans Creator and Influencer. Check the New Special XMicro Razors for Men & Women, 1 Razor, 7 Blade Refills with German Stainless Steel, Lubricated with Vitamin E for Smooth Shave, Shields Against Irritation, Version X Men|Women
