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Red Lobster Closes 48 Restaurants Across 21 States
The troubled restaurant operator, previously partially owned by Thai Union Group, has abruptly closed 48 of its roughly 650 locations nationwide. Reports indicate that some Red Lobster employees arrived at work to find signs in the restaurant windows announcing the closures and their subsequent unemployment.
In response to the closures, TAGeX Brands, based in Rochester, New York, has initiated its largest restaurant liquidation process to date, selling off equipment and assets from select soon-to-close locations.
Red Lobster's financial struggles, initially exacerbated by pandemic-related closures, prompted Thai Union to increase its investment in 2020. However, ongoing poor performance led to the decision to exit the strategic partnership and minority investment earlier this year.
Facing mounting challenges, Red Lobster executives are reportedly considering bankruptcy filing, seeking guidance from the Atlanta-based law firm King & Spalding. The chain has also fallen behind on supplier payments, with reports indicating delays of up to 48 days past due dates.
Concerns have been raised about the chain's cash flow forecasting and its ability to navigate challenging market conditions, highlighting potential impacts on suppliers and the broader restaurant industry.
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