Janice R. Andrews
Red Lobster is planning to close over half of its locations, spread across 21 states, in an abrupt move, according to information provided by TAGeX Brands, a company that assists in the sale of restaurant assets. The CEO of TAGeX Brands, Neal Sherman, revealed in a recent LinkedIn post that his organization is helping to seal the deal, with equipment auctions starting today and ending on Thursday.
The plan to shut locations coincides with mounting conjecture among Wall Street experts who believe the well-known seafood firm may soon file for bankruptcy. After Jonathan Tibus was named Red Lobster’s new CEO in March, rumors about the company’s financial difficulties began to circulate. Tibus, an accomplished restructuring specialist from Alvarez & Marsal, was called in to help the business get through difficult times. According to CNBC sources, there is a financial catastrophe on the horizon despite recent attempts to look for possible purchasers in an attempt to avoid bankruptcy.
Red Lobster’s infamous “Endless Shrimp” marketing has brought attention to the company’s attempts to stay profitable. The chain’s inability to offset losses, despite price hikes of up to $25, resulted in considerable financial failures during its ownership by Thai Union.
Red Lobster was established in 1968 in Lakeland, Florida, and soon rose to prominence in the American restaurant industry by providing customers all over the country with a large selection of seafood dishes. But given that Thai Union said earlier this year that it would be selling its minority investment, the future of the well-known seafood company is uncertain in an unstable financial environment.
