Red Lobster abruptly closed the doors of at least 50 restaurants across the United States on Monday. That included more than a dozen locations in New York and New Jersey, blinding employees of the seafood chain.
TAGeX Brands, the restaurant liquidator, It has been revealed that kitchen utensils and furniture are being auctioned off. Sales have begun from closed Red Lobster stores as part of the “largest restaurant equipment sale in history.”
Red Lobster’s website says its 14 stores in New York and New Jersey are “temporarily closed” for the time being as the struggling company considers the possibility of filing for Chapter 11 bankruptcy protection. .
Closed locations include Lakewood, New York; Buffalo, New York. Amherst, New York. Williamsville, New York. Rochester, New York. Poughkeepsie, New York. Stony Brook, Kingston, NY. New York; Scarsdale, New York. Nanuet, New York. Ledgewood, New Jersey. Lawrenceville, New Jersey. East Brunswick, New Jersey. Bridgewater, New Jersey.
Red Lobster, which has 649 stores nationwide, has not publicly commented on the closures.
Employees and customers at Red Lobster in Buffalo were greeted by a sign taped to a glass window indicating the restaurant was closed. According to WKBW.
“This location is closed. We look forward to serving you at another Red Lobster location in the future,” the sign said.
Employee Ramon Garcia told the publication that he heard about the store’s closure from a colleague.
Company executives allegedly contacted employees only when they told them they had three days to remove everything from the site.
“This happened out of nowhere. Everyone we work with lost their jobs and we don’t know what’s going to happen next,” Garcia said. “It’s taking a toll on them.”
“I didn’t know we were going to go bankrupt, but I kind of knew, if you know what I mean,” Garcia said. “They were cutting back on a lot of things.”
Red Lobster reportedly considered a decision last month to file for Chapter 11 bankruptcy protection to restructure its debt.
The seafood chain has sought advice from law firm King & Spalding on how to terminate some of its long-term contracts and renegotiate parts of its leases, people familiar with the matter said. bloomberg.
In January, Thailand-based seafood giant Thai Union Group PCL, which owns Red Lobster, Announced intention to pursue withdrawal of minority shareholder investmentblamed rising costs and the coronavirus pandemic.
Thirapong Chansiri, CEO of Thai Union Group, said: “The COVID-19 pandemic, continued industry headwinds, rising interest rates, and rising material and labor costs are impacting Red Lobster. “As a result, there has been a long-term negative financial contribution to Thai Union and its shareholders.”
“After detailed analysis, we have determined that Red Lobster’s ongoing financial requirements are no longer consistent with our capital allocation priorities and are pursuing the exit of our minority investment.”
In 2016, Thai Union paid Red Lobster’s then-parent company Golden Gate Capital $575 million for a 25% stake in the restaurant chain.
The group claimed that Red Lobster recorded a stock loss of $19 million in the first nine months of 2023.
The restaurant also blamed its $11 million loss in the third quarter of last year on its “Ultimate Endless Shrimp” deal, in which customers pay $20 for all-you-can-eat shrimp.
Union Group CFO Ludovic Régis Henri Garnier told Restaurant Business Magazine He said the effort was intended to “increase traffic” but “didn’t work” as the price was increased to $25.
“We want to keep it on the menu. And of course we have to be more selective about the entry points and prices we offer in this promotion.”
In March, Red Lobster appointed veteran bankruptcy expert Jonathan Tibbs I have been appointed as the new CEO.
Red Lobster was then looking for a buyer to take over the business. According to CNBC.
The outlet reported last month that a company had expressed interest in acquiring the company, but the deal never materialized.
