(ConservativeJournal.org) – The seafood chain Red Lobster is closing many of its restaurants across the country due to immense financial difficulties. In an announcement earlier this week, Red Lobster revealed that over 50 locations will be closed.
California and Florida will have five restaurants close, while Colorado and Maryland will both lose four locations. A company called TageX will manage the sales of the equipment from the closing locations. They described this event as the largest auction of restaurant equipment they have ever done. Although over 50 closures were mentioned, only 48 locations are listed in the auction catalog.
Earlier this year, reports surfaced that Red Lobster might file for bankruptcy due to financial issues. Red Lobster supposedly wants to deal with the situation in a way that would allow them to stay on the market, rather than close operations entirely.
It was reported that the company is considering a Chapter 11 bankruptcy filing to try and lessen their financial output. The seafood chain is currently consulting with a law firm regarding restructuring, although no final decisions have yet been made. If Red Lobster does file for Chapter 11 bankruptcy, it can keep running restaurants while working with investors on reducing the amount of debt it has as a company.
Red Lobster has switched between owners multiple times in the past two decades. First, it was owned by the same group as Olive Garden. In 2014, Golden Gate Capital took over. In 2020, Thai Union purchased the chain. However, this year, Thai Union announced that due to Red Lobster’s current financial issues, it will have to sell the franchise off as well.
In March, Red Lobster named Jonathan Tibus as its new CEO. Tibus is well-known for his skills in reversing the financial decline of shops and restaurants. He has led similar types of efforts in other companies he has worked for.
The future of Red Lobster remains uncertain as the company navigates these financial challenges.
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