It seems this has been brewing for a while and things finally became too much for the iconic restaurant.
In one shocking move, Red Lobster, the well-known seafood restaurant chain, abruptly closed at least 50 of its locations across the United States this Monday, with over a dozen in New York and New Jersey. This move left many employees and patrons in shock as they faced the immediate shutdown of their local eateries.
Red Lobster’s website lists fourteen locations in New York and New Jersey as “temporarily closed” for the foreseeable future. The affected New York locations include Lakewood, Buffalo, Amherst, Williamsville, Rochester, Poughkeepsie, Stony Brook, Kingston, Scarsdale, and Nanuet. In New Jersey, the closed locations are in Ledgewood, Lawrenceville, East Brunswick, and Bridgewater.
This abrupt closure comes as Red Lobster struggles financially and weighs the possibility of filing for Chapter 11 bankruptcy to restructure its debts. Employees were reportedly given only three days’ notice to clear out their stores. Ramon Garcia, an employee at the Buffalo location, learned about the closure from a coworker and expressed his shock and concern for his colleagues, highlighting the sudden job losses and the uncertainty they now face.
“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.”
The company has not issued a public statement regarding these closures. However, signs posted at closed locations suggest customers visit other Red Lobster restaurants in the future.
Red Lobster, which operates 649 locations nationwide, has been exploring various financial strategies to address its challenges. According to Bloomberg, the chain has consulted with law firm King & Spalding about shedding some long-term contracts and renegotiating leases. Additionally, Thai Union Group PCL, a major investor in Red Lobster, announced its plans to divest from the restaurant chain earlier this year, citing sustained industry headwinds and financial losses exacerbated by the COVID-19 pandemic and rising costs.
These financial struggles were highlighted by the restaurant’s recent promotions, such as the “Ultimate Endless Shrimp” deal, which initially aimed to boost customer traffic by offering all-you-can-eat shrimp for $20. Despite raising the price to $25, the promotion did not meet financial expectations, contributing to a significant loss in the third quarter of the previous year.
This has been brewing for a while; hopefully, the chain can rebound.
