Thrifty Banker
  • Politics
  • Business
  • World
  • Investing
  • Politics
  • Business
  • World
  • Investing

Thrifty Banker

Business

Red Lobster files for bankruptcy, but restaurants will stay open

by May 21, 2024
May 21, 2024
Red Lobster files for bankruptcy, but restaurants will stay open

Red Lobster has filed for voluntary Chapter 11 bankruptcy in Florida, the company confirmed in a statement late Sunday night — but it intends to keep its locations open.

The 56-year-old seafood chain, the largest of its kind in the U.S., said it would ‘drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern.’

The company said it lost $76 million last year and had seen a 30% drop-off in guest count since 2019.

As part of its reorganization, Red Lobster has agreed to sell its business to a new entity wholly owned and controlled by its lenders, a so-called stalking horse arrangement. The company said it had received a $100 million financing commitment to fund ongoing operations.

The bankruptcy petition lists the company’s assets as worth between $1 billion and $10 billion and lists debt obligations within the same range.

The chain had recently announced it was closing some 99 locations across the country.

But the company stressed that its remaining restaurants will stay open during the bankruptcy process and that it has been ‘working with vendors to ensure that operations are unaffected.’

In its bankruptcy filing, Red Lobster stated it employs 36,000 workers who serve some 64 million customers per year.

Jonathan Tibus, the company’s CEO, said: ‘This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth.’

Founded in 1968, Red Lobster grew to nearly 700 locations by 2019. But it failed to regain its footing after the pandemic. Between 2019 and 2023, U.S. sales fell 13% on net. The privately held company has since struggled under its debt load, while also seeing payments to vendors disrupted.

That’s coincided with a stream of executive turnover announcements, and ill-fated strategic initiatives including an all-you-can-eat shrimp offering that resulted in heavy losses.

In the bankruptcy filing, Tibus cited ‘the difficult macroeconomic environment, a bloated and underperforming restaurant footprint, failed or ill-advised strategic initiatives, and increased competition within the restaurant industry’ as the reasons for its struggles. He highlighted the fact that dining costs have outweighed groceries, and that 50% of U.S. states had increased their minimum wages, further reducing Red Lobster’s profit margin.

Perhaps the most prominent of the poor decisions was an ‘endless shrimp’ offering by a previous CEO that Tibus said ultimately cost the company $11 million. The circumstances that led to the promotion are under investigation, Tibus said.

The company has also seen multiple owners over the past five years; most recently seafood conglomerate Thai Union had taken a controlling stake, but it announced in January its intention to sell it.

This post appeared first on NBC NEWS
0
FacebookTwitterGoogle +Pinterest
previous post
As their customers age, department stores chase younger shoppers
next post
Target lowering prices on 5,000 frequently bought items

Related Posts

Disney appeals federal judge’s dismissal of its lawsuit...

February 2, 2024

‘The Great Stay’: Layoffs, unemployment remain low as...

March 8, 2024

Hyundai, Kia recall 91,000 US vehicles over fire...

August 8, 2023

The Body Shop shuts down U.S. operations, with...

March 12, 2024

Delta makes more tweaks to frequent flyer program...

October 21, 2023

Nike pushes back Skims launch with Kim Kardashian...

June 20, 2025

Bank of America CEO says financial industry will...

January 22, 2025

Electric vehicle owners face the cold truth as...

January 20, 2024

What’s Turo? The ‘Airbnb of cars’ was used...

January 4, 2025

Palantir joins list of 20 most valuable U.S....

July 27, 2025

    Become a VIP member by signing up for our newsletter. Enjoy exclusive content, early access to sales, and special offers just for you! As a VIP, you'll receive personalized updates, loyalty rewards, and invitations to private events. Elevate your experience and join our exclusive community today!


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Popular

    • 1

      ‘This is a life-changing event’: Floridians start an arduous recovery as Idalia keeps thrashing North Carolina

      September 1, 2023
    • 2

      Letter from the CEO: Unlocking the True Value of Electric Royalties Ltd

      March 26, 2025
    • 3

      A GOP operative accused a monastery of voter fraud. Nuns fought back.

      January 3, 2025
    • 4

      Waymo offers teen accounts for driverless rides

      July 9, 2025
    • 5

      Strong Leach Recoveries and Low Impurities

      July 9, 2025
    • 6

      Tesla asks shareholders to vote again on Musk’s $56 billion payout

      April 18, 2024
    • 7

      Eruption of Indonesia’s Mount Lewotobi Laki Laki volcano sends ash 11 miles high

      July 7, 2025

    Categories

    • Business (1,096)
    • Investing (2,149)
    • Politics (2,979)
    • Uncategorized (20)
    • World (3,421)
    • About us
    • Contacts
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: thriftybanker.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 thriftybanker.com | All Rights Reserved