Red Lobster has filed for Chapter 11 bankruptcy protection, facing mounting debt and reduced sales. Established in 1968, the company is the world’s largest seafood chain, serving an estimated 64 million customers annually across more than 550 restaurants in the US and Canada.
In its bankruptcy filing, Red Lobster cited financial challenges, including rising food prices, expensive leases, and underperforming stores. Also cited was the company’s costly decision last year to make its all-you-can-eat shrimp promotion a permanent staple of its menu. The company reported a $76M loss in FY 2023 and has recently closed dozens of locations. Yesterday, it entered into a stalking horse purchase agreement (see explainer) to continue operations under an entity controlled by its more than 100,000 lenders.
The casual dining industry overall saw a slowdown at the end of last year, with 11 out of 21 publicly traded chains reporting sales declines.
