(HorizonPost.com) – Restaurant chain Red Lobster will be closing at least 48 locations nationwide, according to restaurant liquidator TAGeX Brands.
TAGeX announced that it would be holding an online auction of the popular seafood chain’s inventory, including furniture and kitchen equipment, from May 13 until May 16.
According to Red Lobster’s website, locations in Buffalo, Jacksonville, Orlando, and other locations are now listed as “temporarily closed.”
To deal with labor costs and leases, Red Lobster is considering filing for Chapter 11 bankruptcy protection as it seeks to restructure its debt. The company has sought the advice of the law firm King & Spaulding, according to sources familiar with the situation.
In recent years, Red Lobster has changed owners and management multiple times. Thai Union Group Plc, which took over Red Lobster in 2021, this year said the restaurant chain’s “ongoing financial requirements” did not “align with Thai Union’s capital allocation priorities” after the company lost $530 million on its investment.
During the time Thai Union controlled the company, Red Lobster had four CEOs. Its “all-you-can-eat” shrimp deal in 2023 slowed table service down and took a bite out of Thai Union’s profits.
In November, Thai Union CEO Thiraphong Chansiri said the restaurant needed to be “much more careful” with its shrimp deal.
The mass closures mark one of the few times in the restaurant chain’s 50 years in business that Red Lobster has closed dozens of locations at the same time.
The restaurant’s cash flow problems have been complicated by expensive leases and onerous labor costs.
Sources said that restructuring discussions have been underway but no final decision on bankruptcy has been made.
Filing for Chapter 11 bankruptcy protection would allow Red Lobster to continue operating while it works out a debt-reducing plan.
Casual dining has taken a hit in recent years, slipping from 36 percent of the restaurant industry’s total sales in 2013 to 31 percent a decade later. The popularity of fast-casual chains like Chipotle and fast-food chains like Chick-fil-A have also cut into casual dining restaurants like Red Lobster.
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