Red Lobster has abruptly closed the doors of at least 50 restaurants nationwide, including over a dozen in New York and New Jersey.
TAGeX Brands, a restaurant liquidator, announced that it is auctioning off kitchen items and furniture from the closed Red Lobster locations as part of its “largest restaurant equipment sale ever.”
Red Lobster's website states that fourteen locations in New York and New Jersey have been “temporarily closed” for the foreseeable future, as the struggling company considers a possible Chapter 11 bankruptcy filing.
The shutdown locations include Lakewood, Buffalo, Amherst, Williamsville, Rochester, Poughkeepsie, Stony Brook, Kingston, Scarsdale and Nanuet in New York and Ledgewood, Lawrenceville, East Brunswick and Bridgewater in New Jersey.
Red Lobster — which has 649 locations nationwide — has not publicly commented on the closures.
Employees and customers at a Red Lobster in Buffalo arrived to find a closure notice taped to the glass window, as reported by WKBW.
The signs said, “This location is closed. We look forward to serving you at another Red Lobster location in the future.”
Ramon Garcia, an employee, told the outlet that he learned of his store’s shutdown from a fellow worker.
Corporate officials allegedly only reached out when they informed the workers that they had three days to clear everything out of the location.
“This happened out of nowhere. All the people that we work with, they’re losing their jobs and not knowing what to expect after that,” Garcia said. “It’s taking a toll on them.”
“I didn’t know we were going bankrupt, but I kind of knew, if you know what I’m saying,” Garcia said. “They were cutting back on a lot of stuff.”
Last month, Red Lobster considered filing for Chapter 11 bankruptcy in order to restructure its debts, according to a report.
In January, Thai Union Group PCL - a Thailand-based seafood giant that owns Red Lobster revealed its intention to pursue an exit from its minority investment, blaming rising costs and the COVID-19 pandemic.
“The combination of COVID-19 pandemic, sustained industry headwinds, higher interest rates and rising material and labor costs have impacted Red Lobster, resulting in prolonged negative financial contributions to Thai Union and its shareholders,” Thai Union Group’s CEO Thiraphong Chansiri said.
“After detailed analysis, we have determined that Red Lobster’s ongoing financial requirements no longer align with our capital allocation priorities and therefore are pursuing an exit of our minority investment.”
Thai Union acquired a 25 percent stake in Red Lobster from Golden Gate Capital for $575 million in 2016.
The group claimed that Red Lobster incurred a share loss of $19 million during the first nine months of 2023.
The restaurant also attributed its $11 million loss in the third quarter last year to the "Ultimate Endless Shrimp" deal, which allows customers to spend $20 on all-you-can-eat shrimp.
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