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Red Lobster Closes More Than 40 Restaurants Nationwide Over Bankruptcy

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Red Lobster Closes More Than 40 Restaurants Nationwide Over Bankruptcy
Source: Pinterest

Red Lobster Closes More Than 40 Restaurants Nationwide Over Bankruptcy

Source: Pinterest

Popular restaurant chain Red Lobster is in its final days. The company has filed for bankruptcy and closed over forty locations nationwide. 

Red Lobster Closes 48 Branches

Source: Pinterest

Red Lobster is a famous restaurant chain that many people love in America. In fact, celebrities also frequent the restaurant, with notable names like Nicki Minaj, who once served as a waitress at a Red Lobster branch. However, the restaurant chain is in its final days, closing 48 locations across the country. What’s worse, many only found out about this after TAGeX Brands, a restaurant liquidator, started auctioning its equipment. 

Online Auction for Red Lobster Equipment

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The online auction by TAGeX Brands started on Monday, May 13th, and will run through Thursday, May 16th. The brand’s X (formerly Twitter) account announced this online action, saying, “Fixtures, furniture, and equipment MUST GO.” According to TAGeX Brands’ statement, there will also be a winner for each location, and the winner “takes all.” 

Red Lobster’s Struggling Finances

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The restaurant chain has struggled with its finances for many years due to reduced sales and profits. In the third quarter of 2023 alone, Restaurant Business reported that Red Lobster lost over $11 million. This huge loss could be attributed to their “Ultimate Endless Shrimp” for $20 offer on the regular menu, which did not pay off eventually.

ALSO READ: Red Lobster’s Failure as a Case Study on How To Run a Business Down

Parent Company Pulls Out

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Another significant setback for the company happened after it lost its biggest investor. Thai Union Group, the company’s parent company, decided to pull out of Red Lobster due to its constant loss of millions of dollars.

Therefore, the company continued to decline steadily, losing more and more as the months passed. With the announcement of the closure of 48 branches, many wonder how bad the situation is.

Possible Bankruptcy

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According to Bloomberg reports, Red Lobster’s executives are considering filing for Chapter Eleven bankruptcy. This would allow the company to renegotiate its property leases and effectively manage its high labor costs. It would also give the company’s executives time to figure out their next move. As Red Lobster is one of the biggest restaurant chains in the country, this has made many wonder if the company will eventually survive. 

About 650 Locations at Risk

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As one of the biggest restaurant chains in America, Red Lobster has about 650 locations across the country. However, most of these locations now have “temporarily closed” on their official website. Some of the affected areas are Elkhart, Indiana; Buffalo, New York; and Orlando, Florida, the brand’s hometown. The employees, customers, and communities around these locations are still shocked.

POLL—Should the Government Increase Taxes on the Wealthy To Reduce Economic Inequality?  

Danville, Illinois Mayor Reacts

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Danville, a city in Illinois, is reeling from the impact of Red Lobster’s closure. Its mayor, Rickey Williams Jr., shared a heartfelt post to the brand on Facebook, thanking Red Lobster for its contribution to the community over the years. The mayor also offered condolences, prayers, and help, saying, “We’re here to help in any way we can” in his post.

Employees Got No Headsup

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Like the rest of the public, Red Lobster employees were surprised by these sudden closures. They did not have notice or time to understand what was going on before they suddenly lost their jobs. A user on X who claims to be a former employee of Red Lobster wrote, “I lost my job today without warning and worked Mother’s Day yesterday.”

Thousands of Jobs Lost

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Per a Newsweek report, an economic intelligence company called MicroEdge estimated that about 6,500 Red Lobster employees might be affected by the sudden closures. This is a large number of people who will now be displaced from their sources of income. However, Red Lobster itself has not confirmed the authenticity of these numbers.

ALSO READ: US Hospital Chain Files for Bankruptcy

The Online Auction’s Buzz

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Since TAGeX Brands announced the online auction on Monday, there has been a lot of buzz on the internet. Thousands of people have shown interest in obtaining Red Lobster’s equipment and furniture for several reasons. A representative from TAGeX Brands said that the company was able to complete four sales on Monday alone. 

Community Reactions

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The news of the closure has sparked several reactions across the country. The most prominent ones are concern, disappointment, and sadness. The locals of the affected communities are distraught as they have now lost their favorite restaurants and seafood spots. Residents also took to X to share their experiences and reasons why they would miss Red Lobster so much.

What Will Happen to Red Lobster?

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The future of Red Lobster is quite uncertain. As it continues to close down these locations, it is not surprising to know that bankruptcy looms over the brand. However, the iconic restaurant chain is not giving up without a fight. With the auctions and possible bankruptcy decisions, the company’s executive might be able to turn things around for the better. Their loving customers are keeping their fingers crossed!

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