Red Lobster's Times Square determination could soon adjacent
After months of dozens of edifice closings and headlines astir "endless shrimp" woes, the seafood concatenation says it volition soon exit from Chapter 11 bankruptcy protection.
A U.S. bankruptcy justice connected Thursday approved the casual seafood chain's reorganization plan, which includes a lender radical led by plus manager Fortress acquiring the business. The greenish airy arrives nether conscionable 4 months aft Red Lobster filed for bankruptcy extortion arsenic it pursued a sale, pursuing years of mounting losses and dwindling customers portion it struggled to support up with competitors.
At the clip of filing successful May, Red Lobster's enactment shared plans to "simplify the business" done a simplification of locations. The chain, which mislaid $76 cardinal successful 2023, shuttered dozens of its North American restaurants implicit caller months — some starring up to and during the bankruptcy process. That includes much than 50 locations whose instrumentality was enactment up for auction conscionable days earlier the Chapter 11 petition, followed by further closures passim the bankruptcy process.
Red Lobster said Thursday that it expects to run astir 544 locations crossed the U.S. and Canada upon emerging from bankruptcy. That's down from 578 disclosed arsenic of May's bankruptcy filing.
Under presumption of the acquisition, which is expected to adjacent by the extremity of September, the concatenation volition proceed to run arsenic an autarkic company.
Once the woody is finalized, Red Lobster volition besides get a caller CEO — Damola Adamolekun, erstwhile main enforcement of P.F. Chang's.
Adamolekun was appointed to caput RL Investor Holdings, the recently formed entity acquiring Red Lobster, by Fortress past week. In a connection Thursday, Adamolekun said that Red Lobster "has a tremendous future" and thanked Jonathan Tibus, who volition permission the institution and measurement down arsenic CEO, for his enactment during the bankruptcy process.
Red Lobster's purchaser is besides providing further backing to assistance the Orlando, Florida-based concatenation get backmost connected its feet post-emergence. Adamolekun said the company's semipermanent concern program includes a committedness of much than $60 cardinal successful caller funding.
Multiple ownership changes
Known for its affordable seafood and cheddar biscuits, Red Lobster has seen aggregate ownership changes implicit the people of its 56-year history. The marque was founded backmost successful 1968 by Bill Darden, who sold Red Lobster to General Mills successful 1970. General Mills aboriginal went connected to signifier Darden Restaurants, which owns Olive Garden and different chains. Darden Restaurants was spun disconnected from General Mills successful 1995.
Darden Restaurants aboriginal sold Red Lobster to a backstage equity steadfast successful 2014. Thai Union Group, 1 of the world's largest seafood suppliers, archetypal invested successful Red Lobster successful 2016 and upped its involvement successful 2020 — but announced its volition to exit its number concern earlier this year.
When announcing plans to divest successful January, CEO Thiraphong Chansiri said the COVID-19 pandemic, manufacture headwinds and rising operating costs from Red Lobster had resulted successful "prolonged antagonistic fiscal contributions to Thai Union and its shareholders." It reported a $19 cardinal nonaccomplishment from Red Lobster for the archetypal 9 months of 2023.
While not the sole reason, among sources of nonaccomplishment were — yes — those endless shrimp. Last year, Red Lobster importantly expanded the iconic all-you-can-eat special. But lawsuit request overwhelmed what the concatenation could afford. Thai Union enactment aboriginal noted that the deal's $20 terms tag wasn't making capable money.
Last year's shrimp debacle wasn't the archetypal clip Red Lobster saw consequences of "endless" promises. In 2003, the institution reportedly mislaid millions of dollars connected an all-you-can-eat "Endless Crab" promotion erstwhile crab prices rose.
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