Red Lobster Restaurant is closing nearly 50 locations in Florida Due To Bankruptcy

Red Lobster is shutting down a minimum of 48 of its restaurants in 21 different states. This information comes from a company that assists businesses in selling off their restaurant equipment.

Neal Sherman, who is the CEO of TAGeX Brands, shared on LinkedIn this Monday that his company is assisting Red Lobster. They are currently auctioning off equipment from the restaurants. And the auction is scheduled to end on Thursday, as Sherman mentioned.

Many Wall Street analysts are predicting that Red Lobster may declare bankruptcy in the upcoming weeks. The speculation about a potential bankruptcy for it started circulating earlier this spring when. In March, the company appointed Jonathan Tibus as its new chief executive.

Tibus, who hails from advisory firm Alvarez & Marsal, is recognized for his expertise in restructuring corporate entities. As recently as last month, restaurant was actively seeking a buyer with the aim of avoiding bankruptcy.

Why did Red Lobster Lead to Bankruptcy?

In March 2024, Red Lobster welcomed Jonathan Tibus as its new CEO. Tibus brought with him experience from his previous roles. Which including CEO during the bankruptcy of Kona Grill and as the chief restructuring officer at Krystal.

Officials within the company characterized Red Lobster as a “zombie brand,” indicating significant financial challenges. To address these difficulties, they began exploring multiple avenues for the company’s future. Options included implementing a restructuring plan, selling assets in a fire sale, or potentially filing for bankruptcy.

In response to its financial situation, Red Lobster publicly announced its intention to seek a new buyer. However, with uncertainty surrounding the acquisition, the company acknowledged the looming possibility of filing for bankruptcy within the coming months.

On April 16, 2024, Bloomberg revealed that Red Lobster was gearing up to file for Chapter 11 bankruptcy. The decision was attributed to financial strains, exacerbated by an $11 million loss incurred during its “endless shrimp” promotion.

As part of its strategy, Red Lobster intends to terminate certain underperforming leases. And review other long term contracts, along with addressing escalating labor expenses. Despite the impending bankruptcy filing, the company plans to maintain regular operations throughout the procedure.

Red Lobster aims to engage in discussions with its creditors regarding a potential plan to reduce its debts through the bankruptcy process. This approach signals the company’s commitment to navigating its financial challenges while striving to ensure its continued viability.

On May 13, 2024, Red Lobster took sudden action by shutting down approximately 48 of its restaurants across the United States. So, this closure affected all of its establishments in the Buffalo area. And the majority of its locations in the Orlando area.

In response to the closures, TAGeX Brands has stepped in to oversee liquidation auctions for the restaurant fixtures and supplies at these shuttered locations. The auctions, managed by TAGeX Brands, are currently underway and scheduled to conclude by May 16th.

This rapid decision to close multiple restaurants underscores the ongoing challenges faced by Red Lobster as it navigates through its financial difficulties. While, the involvement of TAGeX Brands in the liquidation process. Which highlights the company’s efforts to efficiently manage the closure of these establishments while maximizing returns on assets.

Red Lobster, From Prototype to Profit:

In 2009, Red Lobster introduced its innovative Bar Harbor restaurant prototype. By drawing inspiration from the charming coastal architecture of New England. While, the revamped exterior boasted shingle and stone towers, accentuated by signal flags and inviting Adirondack style benches.

Inside, the updates included rich dark wood paneling, cozy warm toned fabrics, soft ambient lighting, and an array of nautical-themed decor and artwork.

However, fast forward to December 19, 2013, when Darden Restaurants, Red Lobster’s parent company, made a significant announcement. They revealed plans to either sell or spin off the restaurant brand entirely.

This strategic move was prompted by pressure from stock investors, following Darden’s overspending on a new digital platform. Which led to financial concerns and the need to reassess their portfolio.

On May 12, 2014, Darden made a significant move as part of its plan to separate Red Lobster from its portfolio. They announced the conversion of co-located restaurant and Olive Garden restaurants into standalone Olive Garden locations.

Just four days later, on May 16, 2014, Darden unveiled its decision to sell the Red Lobster seafood restaurant chain to Golden Gate Capital for a whopping $2.1 billion. The sale process was completed on July 28, 2014, marking a significant transition for restaurant.

Following the change in ownership, Red Lobster made several strategic decisions. On August 6, 2014, they disclosed the selection of their new headquarters location in CNL Center City Commons in Orlando. Then, on March 6, 2015, restaurant proudly opened its Restaurant Support Center.

In 2016, there was another noteworthy development when seafood supplier Thai Union acquired a 25 percent stake in the company, reportedly investing $575 million. This partnership expanded further in 2020 when Thai Union purchased the remaining portion from Golden Gate Capital. By solidifying its position within Red Lobster.

Red Lobster Closures in Florida?

As of May 13, 2024, Red Lobster’s website featured over 60 restaurant locations spread across 49 cities in Florida. Each location had its own dedicated page listing the restaurant’s operating hours.

However, upon conducting a search on the Red Lobster website. It was observed that several cities had their respective restaurant listings marked as “Closed” for all days of the week. This designation indicated that these particular restaurant locations were not currently operational.

As of May 13, 2024, the following Red Lobster restaurant locations in Florida were listed as “Closed” on the restaurant website:

1. Jacksonville: All 3 locations
2. Daytona Beach Shores
3. Gainesville
4. Hialeah
5. Jensen Beach
6. Kissimmee: 1 of 3 (4010 W. Vine St., Kissimmee)
7. Largo
8. Leesburg
9. Orlando: 3 of 6 (5936 International Drive, Orlando; 3552 E. Colonial Drive, Orlando; 617 N. Alafaya Trail, Orlando)
10. Sanford
11. Tampa: 2 of 3 (6161 34th St. North, St. Petersburg; 11601 N. Dale Mabry, Tampa)

It’s noteworthy that despite these closures, many other restaurant locations in Florida. Which still appear to be open according to the information available on Red Lobster’s website.