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Red Lobster to close at least 48 restaurants after ‘endless shrimp’ debacle

The struggling seafood chain is reportedly considering filing for bankruptcy after years of cost-cutting

Io Dodds
San Francisco
Monday 13 May 2024 21:23 EDT
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Related video: Red Lobster considers bankruptcy

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The troubled Red Lobster restaurant chain is closing down at least 48 of its roughly 650 branches across the US, according to a restaurant liquidation company.

Neal Sherman, the chief executive of TAGeX Brands, said on LinkedIn on Monday that it was assisting with the rapid closure of Red Lobsters in 21 US states, starting today.

All of the equipment from the restaurants is now being sold off.

"TAGeX Brands is proud to launch the largest restaurant liquidation EVER through its online auction marketplace," said Mr Sherman. "The furniture, fixtures, and equipment from select Red Lobster locations MUST GO ASAP!"

The closures included five branches in California and Florida, four in Colorado and Maryland, three in Georgia, New York, Texas, and Virginia, and many others across the country.

It comes after reports that the Florida-based seafood chain is considering filing for bankruptcy after years of cost-cutting by its parent company.

In 2023, the struggling company was further knocked off balance by a $20 endless shrimp offer that proved unexpectedly popular with customers, reportedly costing it millions of dollars.

The all-you-can-eat menu option was previously a time-limited promotional offer. But when Red Lobster made it permanent, patrons ended up eating far more shrimp than the restaurant could afford, while taking up tables and lengthening wait times for new arrivals.

"We were expecting an increase of 20 per cent in customer traffic, but the actual number was up to 40 per cent," said Thiraphong Chansiri, the chief executive of Red Lobster's parent company Thai Union, last November.

In January, Thai Union announced it would end its involvement with Red Lobster after eating a $530m loss on its initial investment, which it blamed on the Covid-19 pandemic and the rise of interest rates around the world.

Red Lobster did not immediately respond to a request for comment.

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