The struggles of the once-mighty Red Lobster seafood chain took a turn for the worse this week, with reports that the company has abruptly closed at least 48 restaurant locations across the United States. The shuttered sites span several states, including over a dozen in Red Lobster’s home state of Florida alone.
The mass closures, which happened with little warning to employees or the public, are part of an auction and liquidation process overseen by TAGeX Brands. The restaurant disposition company is selling off equipment, furniture, kitchen gear and more from the closed Red Lobster properties in an online auction running through Thursday.
While Red Lobster has not officially commented on the closures, the development is another ominous sign for the 55-year-old chain that once revolutionized casual seafood dining for American families. Longtime suppliers and company sources have indicated the closures may precede a broader bankruptcy restructuring.
Red Lobster has tapped a restructuring expert as its new CEO, fueling speculation that a Chapter 11 filing could allow the chain to renegotiate burdensome leases and contracts while remaining operational. Rising labor costs have also severely impacted profitability in recent years.
The seafood stalwart’s decline has been a precipitous one after over half a century as an anchor of suburban mall culture. Once renowned for making lobster and other seafood accessible to the middle class, the chain has floundered from corporate mismanagement, unsuccessful promotions, and sweeping changes to the broader casual dining landscape.
Red Lobster’s most recent owners, Thai Union Group, have signaled plans to divest from the chain entirely after taking a $530 million loss on their investment during the COVID-19 pandemic’s fallout. Thai Union’s CEO bluntly stated “I’m going to stop eating lobster” in reference to extricating from the struggling business.
Some longtime fans are already mourning the potential loss of Red Lobster’s signature Cheddar Bay Biscuits and other beloved menu items, as signs announce “This location is closed” at properties with empty parking lots across the map.
