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Red Lobster closes dozens of locations across the US just months after ‘endless shrimp’ losses

Red Lobster Cross County Shopping Center in Westchester County, New York. Taken April 2012

A Red Lobster at the Cross County Shopping Center in Westchester County, New York, taken April 2012. (Anthony22/Wikimedia Commons)

Dozens of Red Lobster locations across the U.S. are on the chopping block.

Restaurant liquidator TAGeX Brands announced this week that it would be auctioning off the equipment of over 50 Red Lobster locations that were recently closed as part of the seafood chain’s “footprint rationalization.” The locations span across more than 20 states — cutting back on Red Lobster’s presence in cities like Denver, San Antonio, Indianapolis and Sacramento, California.

Read more: Here are the locations that Red Lobster is closing in the US

It’s unclear if Red Lobster plans to shutter any additional restaurants in the near future. The Orlando, Florida-based company did not immediately respond to The Associated Press’ requests for comment.

On Red Lobster’s website, a handful of impacted locations were listed as “temporarily closed” or “unavailable” Tuesday morning.

Red Lobster has been struggling for some time. With lease and labor costs piling up in recent years, the chain is now reportedly considering filing for bankruptcy protection. A potential Chapter 11 filing could help Red Robster exit from some long-term contracts and renegotiate many of its leases, unnamed sources familiar with the matter told Bloomberg News last month.

Maintaining stable management has also proven difficult, with the company seeing multiple ownership changes over its 56-year history. Earlier this year, Red Lobster co-owner Thai Union Group, one of the world’s largest seafood suppliers, announced its intention to exit its minority investment in the dining chain.

Thai Union first invested in Red Lobster in 2016 and upped its stake in 2020. At the time of the January announcement on its plans to divest, CEO Thiraphong Chansiri said the COVID-19 pandemic, industry headwinds and rising operating costs had impacted Red Lobster and resulted in “prolonged negative financial contributions to Thai Union and its shareholders.”

For the first nine months of 2023, the Thailand company reported a $19 million share of loss from Red Lobster.

And then there’s been the problem of endless shrimp. Last year, Red Lobster significantly expanded its iconic all-you-can-eat shrimp deal. But customer demand overwhelmed what the chain could afford, which also reportedly contributed to the millions in losses.

TAGeX Brands’ auctions for the more than 50 closing Red Lobster locations it’s handling liquidation for began Monday and will run through Thursday. The sales are “winner takes all” — meaning that one winner will receive the entirety of contents for each location. Images on TAGeX Brands’ website indicate that includes ovens, refrigerators, bar setups, dining furniture and more.

TAGeX Brands called the liquidation “the largest restaurant equipment auction event ever.” In a statement, founder and CEO Neal Sherman said that the goal of such online auctions was to “prevent high-quality items from being discarded in landfills” and instead promote sustainable reuse.

As of Tuesday morning, auctions for 48 locations were still live after another four sales closed Monday, TAGeX Brands said via email.

Red Lobster’s roots date back to 1968, when the first restaurant opened in Lakeland, Florida. In the decades following, the chain expanded rapidly. Red Lobster currently touts more than 700 locations worldwide.

WYATTE GRANTHAM-PHILIPS is a business reporter who covers trending news for The Associated Press. She is based in New York.

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