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Red Lobster will close 23 more locations by the end of August as part of its ongoing bankruptcy process following the closure of over 100 Red Lobster restaurants earlier this summer, leaving the seafood chain with around 500 outlets, down from 650 a year ago.
The closures come as Red Lobster prepares for acquisition by Fortress Credit Corp., a company experienced in managing restaurants and also the owner of Krystal, Logan's Roadhouse, and J. Alexander's. Fortress recently provided a $100 million loan to keep Red Lobster in business during its financial struggles.
Red Lobster to Close 23 More Restaurants
Red Lobster faced multiple challenges leading to its decline, including increased competition, rising costs due to inflation, and internal mismanagement. The company, known for its affordable seafood and popular cheddar bay biscuits, filed for Chapter 11 bankruptcy protection in May after struggling with weak growth and heavy debt.
In 2020, Thai Union, a major player in the seafood industry, became the main shareholder of Red Lobster. However, in 2024, the company was forced to file for bankruptcy due to financial difficulties.
According to ABC11, reports indicate that Red Lobster's problems worsened under Thai Union's leadership, with former executives describing the company culture as toxic. Red Lobster made some cost-cutting moves, such as changing suppliers and introducing a $20 endless shrimp deal, which backfired, resulting in significant financial losses. The endless shrimp promotion alone caused an $11 million loss for the chain.
The recent court filing lists the 23 locations that will close, stating that these restaurants are contributing to ongoing losses and are not needed for future operations. The locations set to close are spread across various states, including Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Minnesota, Missouri, New York, North Carolina, Ohio, South Carolina, and Virginia. Some specific locations include:
- Yuma, Arizona
- Little Rock, Arkansas
- La Mesa, California
- Colorado Springs, Colorado
- Fort Walton Beach, Pensacola, and Port Richey in Florida
- Jonesboro, Georgia
- Bourbonnais, Geneva, and Peoria in Illinois
- Michigan City, Indiana
- Golden Valley and Maple Grove in Minnesota
- Maplewood, Missouri
- Bronx and Queensbury in New York
- Jacksonville, North Carolina
- Strongsville, Ohio
- Cayce, South Carolina
- Alexandria, Richmond, and Virginia Beach in Virginia
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Red Lobster Aims to Streamline Operations and Cut Costs Amid Bankruptcy
Red Lobster's bankruptcy and the closures of these additional locations are part of the company's efforts to streamline operations and reduce costs. A court document filed on August 22 in the US Bankruptcy Court for the Middle District of Florida, where the company is based, confirms the decision to reject the leases of these 23 restaurants by August 31. This decision reflects Red Lobster's need to improve its financial stability and operational efficiency.
The seafood chain has struggled with a revolving door of CEOs, heavy debt, and a significant drop in customer visits since 2019. As part of its bankruptcy filings, Red Lobster had already indicated that it might close more locations beyond the 106 already shut down earlier this summer. In June, the company listed 228 leases that were unprofitable, suggesting further closures might be necessary, according to USA Today.
As Red Lobster navigates through bankruptcy and prepares for its acquisition by Fortress Credit Corp., the company's leadership hopes to turn the tide and stabilize its business, ensuring that the remaining restaurants can continue to serve customers who enjoy its seafood offerings.
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