US: Red Lobsters files for Bankruptcy, closes down outlets

US: Red Lobsters files for Bankruptcy, closes down outlets

Red Lobster, America’s largest seafood chain famous for its shrimp and Cheddar Bay biscuits, has filed for bankruptcy.

Last Monday, Red Lobster’s website identified 87 shops as “temporarily closed” in 27 states, with some auctioning off their kitchen equipment through an online restaurant liquidator.

Almost 580 facilities in the United States and Canada are planned to remain open during the process, employing approximately 36,000 individuals. Last week, scores of other Red Lobster outlets abruptly closed. The whole items, including freezers, ovens, booths, and lobster tanks, have previously been auctioned off.

Red Lobster said it will utilize the bankruptcy procedures to “drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets.”

“This restructure is the best way forward for Red Lobster. It enables us to handle a number of financial and operational difficulties while emerging stronger and more focused on our growth,” said Jonathan Tibus, the company’s CEO, in a statement. “The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests.”

Red Lobster was an early pioneer in that world. It opened in 1968 and grew rapidly during the 1980s and 1990s, hosting generations of Americans for festivities and dates, with many cracking their first lobsters at its tables.

In recent years, as inflation has risen, Red Lobster has lost out on both ends: to fresher, finer, more local eateries; and to a rising tide of cheaper, faster spots such as Shake Shack or Surfside Taco.

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