Red Lobster, a nationwide restaurant chain known for its affordable seafood and cheddar crackers, said Sunday afternoon that it has filed for Chapter 11 bankruptcy protection.
In a statement, Red Lobster said it plans to sell “substantially all” of its assets. The company added that its approximately 650 restaurants will remain open and operating during the bankruptcy process.
“This restructuring is the best way forward for Red Lobster,” CEO Jonathan Tibus said in a statement. “It allows us to address several financial and operational challenges and emerge stronger and refocus on our growth. The support we have received from our lenders and suppliers will help ensure we can complete the sale process quickly and efficiently , while staying focused on our employees and guests.”
In May, a firm that helps companies liquidate restaurant equipment revealed that Red Lobster scheduled to close approximately 50 of these restaurants.
Red Lobster's roots can be traced back to 1968, when the first restaurant opened in Lakeland, Florida as a family-owned establishment under the direction of local restaurateur Bill Darden. The restaurant eventually expanded nationwide, allowing Americans from every corner of the US to enjoy crab, shrimp, lobster and other seafood.
Red Lobster has consistently lost money for years. In 2023, the company saw its financial losses increase after expanding its known all you can eat shrimp deal. But as customer demand soared, Red Lobster struggled to turn a profit while serving up heaps of seafood at a relatively cheap price.
The chain's majority owner is seafood producer Thai Union, which first invested in Red Lobster in 2016. In January, the company announced plans to sell its stake, with Chief Executive Officer Thiraphong Chansiri saying the pandemic, higher interest rates, and rising material and labor costs have hurt Red Lobster's financial performance.
—This is a breaking story and will be updated.
