Red Lobster, a well-known restaurant chain, is reportedly considering filing for Chapter 11 bankruptcy protection as early as next week. The company has faced financial struggles due to the accumulation of hundreds of millions of dollars in debt. One of the factors that led to this was a failed all-you-can-eat shrimp promotion.
Red Lobster plans to close locations in several states, including California, Colorado, Florida, New York, and Texas. Leasing costs, decreased foot traffic during COVID-19 lockdowns, and other factors have contributed to the chain’s downfall. Thai Union Group, which took majority ownership of Red Lobster in 2020, has decided to pull out its investments in the company.
Thai Union Chief Executive Thiraphong Chansiri made an announcement during an earnings call that they would no longer be investing in Red Lobster. The impacts of the COVID-19 pandemic, industry challenges, higher interest rates, and increased costs have all played a role in Red Lobster’s financial struggles. Both Red Lobster and Thai Union Group have yet to comment on the news of the potential bankruptcy filing.
